As a restaurant owner, you have countless responsibilities. You are in charge of coordinating staff, maintaining inventory, administering payroll, adhering to food safety regulations, and observing food prep and the serving of food. You must also take on certain risks from possible third-party claims. Bodily injury and property damage can occur in any type of restaurant, from fine dining establishments to small coffee shops.
Restaurant liability insurance is designed to protect business owners from financial ruin caused by lawsuits stemming from customer slip and fall accidents, food illnesses, and similar scenarios. Learn more about restaurant liability insurance, the benefits of having a general liability policy, and the repercussions of not having adequate insurance.
What Is Restaurant Insurance?
With dozens or even hundreds of patrons visiting your restaurant each day, you need to ensure that you are protected against certain risks. Like any small business, you want to prepare for the unexpected, such as property damage to your premises or an injury to a patron. Restaurant insurance, more commonly known as general liability insurance, is designed to protect your restaurant from property damage or injuries that may occur as a result of your business operations.
General liability insurance can help cover the costs of a variety of claims. In addition to bodily injury and property damage, your policy may cover reputational harm from claims relating to libel, wrongful eviction, slander, malicious prosecution, or the violation of the right of privacy. Your policy may also cover advertising errors, including claims of copyright infringement in your restaurant advertisements. If an injury should occur on your premises, a general liability policy will usually cover medical costs. If you rent the property and it is damaged by lightning, fire, or an explosion, your policy will usually cover the cost to repair or replace any damage.
What Are the Benefits of Restaurant Insurance?
Having the right amount of insurance can be invaluable when the unexpected happens. Even the most cautious of business owners can experience problems that result in liability issues from customers, staff, or even vendors. When you are prepared with the right insurance policy, you can rest easy knowing that you will not suffer the financial consequences of not having insurance. Peace of mind is one of the biggest benefits of restaurant insurance. You cannot always prevent bad things from happening but you can always be prepared for when and if they do.
Having general liability insurance is also a must if you wish to grow your business. Whether you want to work alongside another business or prefer to work with certain vendors, you may need restaurant liability insurance to close the deal. Many businesses will not work with you unless they are sure that you are protected against lawsuits. By acquiring general liability insurance early on, you can stay ahead of the competition and showcase your professionalism in the restaurant industry. You can also feel good about growing your business while also protecting all that you have worked so hard to acquire.
One of the main purposes of having general liability insurance is to be protected financially when you need it. As a small business owner, you may not have the excess funds to cover large damages. If a patron should slip and fall in your restaurant, would you have the money to cover the thousands of dollars in medical damages that could result from the injury? With general liability insurance, you do not have to worry about paying hospital bills out-of-pocket. Instead, you can put your focus on growing your business and not on wiping out your savings account in the event of bodily injury.
What Could Happen Without Insurance?
Maybe you do not think you need restaurant insurance or are planning on canceling your current policy. If that is the case, you may want to rethink your decision. Out-of-pocket litigation could potentially leave you penniless, and without adequate cash flow, your business will likely be forced to close. Your business may also face a serious financial hardship if you are forced to pay lawyers’ fees, court expenses, or damages or settlements that could result from a lawsuit. Even if you are successful and win your case, you could still be out thousands of dollars.
It is also important to remember that there is more at stake than just money. Following a lawsuit, you could risk losing prospective clients who may start to question your integrity as a business owner. A lawsuit could ruin your reputation resulting in fewer and fewer patrons visiting your restaurant. One lawsuit could also open your business to more lawsuits in the future. While a restaurant liability insurance policy can not prevent frivolous lawsuits, it can protect you from the financial consequences. For more information about restaurant liability insurance or to acquire a policy, contact MFE Insurance today.