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What risks does your restaurant face?

So you’ve finally achieved your dream––the coolest new restaurant in town is all yours. But besides hiring a great staff and finding the best vendors, be sure to spend time and assess your company’s risks.  

When you’re opening a restaurant, “risk” could mean something more akin to bad location, wrong décor, or an outdated menu. But from an insurance perspective, the view is far wider. Here are just some of the risks we’re talking about. 


Whether they stem from deep fat fryers, grills, stoves and ovens, or oil and grease vapors, fires are a top risk in any restaurant. And the high-speed work environment doesn’t help the matter. With so many moving parts, it’s vital that protection is reliable. From appropriate shut-off valves, to working sprinkler systems and fire extinguishers, there’s a lot to handle to be sure your restaurant is safe.  

From an insurance point of view, you should be looking into restaurant property coverage. It’s good to know that restaurant property insurance will generally cover vandalism and other unforeseen disasters that cause damage. Thankfully, property insurance and liability coverage are built into a typical Business Owners Policy (BOP). That’s a great starting point for every single restaurant owner. If you’re renting the space that catches fire and the landlord comes after you for damages, liability coverage could save your business. 


With recalls hitting the news cycle hard these days, it can make food purchasing even more stressful. And should an employee or customer fall ill because of tainted products consumed or handled at your restaurant, you could easily be looking at steep medical fees, and even more in possible legal costs. Since you never know how these things could turn, it’s best to be protected from every angle.  

Food contamination insurance can supply lost income if cleaning efforts force you to close temporarily. It may even aid in paying for equipment cleaning and other regulatory requirements, plus medical costs incurred by customers and/or workers. It’s also a good idea to have a solid liability policy in place, should things go beyond the limits of your food contamination policy, or if a lawsuit arises. 

Food spoilage insurance is less about storage, and more about forces outside of your control. If utilities are interrupted because of a storm or power surge, mass quantities of food can quickly be rendered useless. This coverage option can pay to repurchase food and repair or replace damaged equipment or appliances. Utility interruption coverage could also enter into the picture here. Chat with one of our agents to learn more. 


If your establishment offers alcoholic drinks, you’ve added another variable to the risk profile. It’s a fact that while most customers will be moderate in their drinking habits, there are always exceptions. Should an intoxicated patron then cause property damage or injury to a third party, you could be on the hook. Adding a liquor liability policy to your overall insurance plan will ensure that when this happens to you, your livelihood won’t be on the line. 


Catering or home deliveries, store runs to pick up supplies, trade show outings, and more–there’s always a chance that this trip will be the one that results in an accident. When it happens, who covers the damages if you’re at fault? Your personal coverage won’t extend to a company vehicle or even to your personal vehicle if you’re using it for business operations. And don’t look to your General Liability coverage either. But if you have a commercial auto policy, it can step in to pay for damages, injuries, and even legal fees.  


Far beyond slips, trips, and falls, restaurants have to worry about fire, sharp and dangerous equipment, and possible food contamination. It’s for good reason then that once you’re at full-scale operation, worker’s compensation coverage will be mandatory (exact requirements vary state-by-state). In the event that an employee is injured or falls ill due to working conditions, you’ll have a way to pay for medical expenses and the worker’s lost wages.  


Your standard commercial property policy will cover theft by customers, but employee theft is another matter. This could range from a casual swipe of food, drink, or cash, to a calculated sabotage of computer systems or exploitation of customers’ credit card information. Whatever the case, be sure that you’re protected against dishonest employees with a crime and employee dishonesty policy. This can pay to replace stolen items, update systems to make them theft-proof, and to help restore your company’s image. 


Sadly, recent years have brought forth media revelations about intentional harassment in the food industry and beyond. And even if it isn’t your intent, thoughtless comments or actions can be misconstrued. Individuals who are let go could feel that they were wrongfully terminated, and then set about building a body of evidence to prove their claim.  

First off, training employees in how to handle on-the-job interpersonal relationships will go far to put you in a favorable, responsible light. But it’s always a good idea to have protection lined up, should accusations be made. Employment practices liability insurance is what will offer monetary support for possible legal proceedings and victim compensation. 


Owning and managing a successful restaurant is one of the hardest jobs out there. So once the restaurant is functioning at optimum levels, don’t allow common risks to trip up the momentum. Besides all the above-mentioned risks, dangers posed by natural disasters could temporarily suspend business operations. Signs and glass storefronts could be vandalized or damaged by a weather or utility event. Sewers could back up and sprinkler systems may leak. Memorabilia or art pieces used for décor could be damaged or stolen. The company delivery van could be involved in an accident.  

The list of potential mishaps and disasters goes on and on. Be sure that protection against these hazards goes even further. Get in touch with Pronto to see how our restaurant insurance specialists can line you up with the coverage you need.

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