General Liability for Restaurants – What You Need to Know

There’s no doubt owning and operating a restaurant is a tough business. It’s estimated that around 27% of new restaurants fail within the first year of business. That number approaches 60% by the five-year mark.1

With so much uncertainty and so many challenges to overcome, restaurant owners should protect their investment and livelihood with adequate insurance, including property insurance, workers compensation, and liability coverage.

What does Restaurant Liability Insurance typically include?

You should consider the following types of liability coverages to protect against potential lawsuits brought by your patrons.

General Liability – This includes coverage for medical bills as well as legal costs that arise as a result of a claim made against you due to negligence if a customer becomes injured on your restaurant property. It can also protect against personal injury claims such as libel and slander.

Product Liability – This protects you from the legal costs associated with claims made against you as a result of illness or injury from the food you serve. If it’s proven that the food your restaurant served caused food poisoning, hepatitis, or salmonella infection you could be responsible for medical costs and punitive damages as well.

Liquor Liability – For establishments that serve alcohol this coverage is a must. Your bar or restaurant can be held liable and sued in the event that a patron you served became intoxicated on your premises and caused damage, including acts of violence or negligence such as drunk driving. If you are sued because of the actions of one of your customers, liquor liability will protect you from the potentially devastating financial loss.

Hired & Non-Owned Vehicles Liability – For establishments that provide food delivery by employees using their own vehicles this coverage is a necessity. It provides protection for your business in the event one of your delivery drivers is involved in an accident while performing a delivery.

Do I need Umbrella Liability coverage for my restaurant?

Another way to increase protection to your restaurant business from the financial costs of a lawsuit is to purchase an Umbrella liability policy.

An Umbrella liability policy kicks in after the amount of your General liability coverage has been exceeded. If you feel like your business could be at risk for an excessively high lawsuit, whether it is because of the type of service you provide or the type of patrons you attract, then you should consider an umbrella policy.

One good way to gauge if your restaurant needs an umbrella policy is based on the amount of traveling you do. Catering and delivery services are at a higher risk for auto accidents, which are the leading cause of liability exposure for small businesses.

Let us answer your questions and ensure that your risks are covered, call us to discuss your needs today.


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