Before you serve your first customer, your business is at great risk and liability. Thankfully, there are many insurance options to help businesses protect their livelihood. Below are critical types of insurance that restaurants and bars should consider to protect their financial investment.
5 Types of Business Insurance You Shouldn’t Go Without
1. General Liability Insurance (hint, hint—slips, trips and falls are an issue!)
Business owners have a duty to take reasonable steps to protect customers from known hazards and to inspect their property regularly to find and re-mediate hazards that could cause injuries. General liability insurance provides coverage for general business claims involving injuries and property damage. Learn more about restaurant insurance coverage.
Tools you can use! Browse our slip, trips and falls blog series for tips and tactics you can implement today to help prevent costly slip, trip and fall claims at your business.
2. Liquor Liability Insurance
Alcohol service creates unique risks and exposures. Failure to follow the appropriate laws and regulations for your business could result in fines, jail, license revocation and/or bad publicity. The DRAM Shop Act allows third parties or others to recover for damages caused by alleged over-service of alcohol. And even if your business is not liable in these complicated situations, your legal defense costs can add up quickly. Liquor liability insurance is critical for costly claims and litigation that arise because of alcohol service and damage or injury caused by an intoxicated person. Learn more about bar insurance coverage.
Liquor service is a complex line of business, but you can still provide a quality service to your guests with the proper controls in place; download this free liquor liability whitepaper for details.
3. Fire Insurance
5,900 restaurant fires occur every year according to the U.S. Fire Administration. From major kitchen fires to electrical fires, making sure that you have the right fire coverage in place will help ensure that your business can recover. While fire coverage is included in most businessowners’ policies, of particular concern is when a fire strikes at a leased property. When landlords and tenants don’t pay attention to the details of a lease regarding who is responsible for what, there may be coverage gaps. For example, a tenant who does a restaurant build-out may be required to insure those improvements even if it will become the property of the landlord when the lease terminates. As a second example, landlords often require tenants to insure HVAC units and repair or replace them in the event of damage even if it’s not a unit the tenant originally purchased. These are not the kind of surprises you want to find out about after a fire happens! Society Insurance offers an endorsement designed to fill the gap by providing additional coverage to protect a tenant’s responsibility for property of the landlord.
The best action is to prevent a fire before it starts. From cooking equipment and electrical hazards to grease build-up and employee training, there is a lot for restaurant and bar owners to be aware of. Get serious about fire prevention; read this fire prevention blog series.
4. Business Interruption Insurance
What if your business was forced to close for days, weeks or months? Even closing for a few hours (think about a busy Friday or Saturday night!) can affect a business’ finances and reputation. Business interruption insurance provides coverage for loss of business income. Look for business interruption coverage that begins immediately after a loss occurs. Some insurance companies have a “time deductible” where coverage may not kick in until after a 72-hour waiting period, but we all know a business starts losing money the second it loses power. Downtime can have a huge financial impact on a business, which is why business interruption coverage with no waiting period is automatically included in all Society Insurance businessowners’ policies.
5. Cyber Liability Insurance
The risks associated with data security (both malicious and accidental) continue to grow in number and sophistication. Cyber criminals look for the quickest way to get in, get information and get out without being detected – and they have increasingly targeted small businesses, perceived as an easier target with less risk of being caught. Cyber liability insurance provides data security and privacy coverage that addresses direct losses for your business and third-party liability claims. Look for a comprehensive plan with breach response solutions from the moment a breach is suspected through restoration of your business operations backed by an expert team of claims, legal, forensic, and crisis management personnel.
A business can avoid major financial loss and costly litigation by selecting an insurance company that customizes coverage options based on your unique business needs. Contact your local Society agent to discuss the details that make the biggest difference for your business.