Opening a restaurant can be a challenge. Ask any restaurant owner, and they will tell you just how important their business is. Just like you wouldn’t serve an entrée without a side dish, you shouldn’t operate a restaurant without having the best insurance coverage. There are over 18 million visits to restaurants every day, and 1.2 million people are directly employed by the restaurant industry in Canada. Unfortunately, as a restaurant owner, there are just as many things that can go wrong in the hospitality industry, resulting in various, expensive insurance claims. Incidents can include any scenarios, ranging from property damage to customer slip-and-fall accidents and employee injuries. Here are our top restaurant insurance ingredients for success to help your business soar!
1. Employee Safety (and Liability) in the Kitchen
When it comes to the restaurant and hospitality industry, your employees are the heart of your business. Generally, they are your first point of contact with customers. On top of this, they are the ones who help create wonderful dishes in the kitchen and ensure that everything served is top-tier. From the front of house to the back of house, they are not only essential to your business but also the most significant risk exposure. Due to this, restaurant owners must provide their employees with proper training. Additionally, it is crucial to have coverage to protect your business from lawsuits, equipment breakdown, and liquor liability (to name a few!)
2. Preventing Slip-and-Fall Potential in the Dining Area
When a guest visits your restaurant, they want to enjoy a wonderful meal and exceptional service. Slip-and-fall accidents are all too common in restaurants. In fact, they are the leading cause of restaurant insurance claims and lawsuits. Please ensure that your entrances and exits are well-lit, clean, and free from hazards. Especially in the winter months, mop up any excess water that forms to prevent slipping. When spills occur, do your best to clean them up as quickly as possible. If any old carpeting begins to lift, have it repaired immediately to prevent tripping hazards. It’s also a good idea to invest in some wet floor signs.
3. Restaurant Parking Lot Risks
Similar to your home, you are responsible for your guests before they even walk in the door. Parking accidents and dangerous parking areas are the second-most common form of traffic incidents. Unfortunately, this is often due to unkept parking lots. Keeping your parking area cluttered, unplowed, and unsalted can increase the number of accidents or falls. On top of this, the risk increases with the involvement of parking valets and the possibility of liquor consumption, though it is illegal to drink and drive.
4. Food Spoilage, Safety, and Contamination
Everyone knows that delicious food is key to your restaurant’s success. Opening a restaurant can be very challenging, not only because of the insurance complexities but also due to the need to manage costs effectively. Many restaurant owners seek ways to save money, including taking advantage of current deals and discounts on operational essentials, such as ready-to-eat meal kits. Opting for promotional offers can contribute significantly to your savings.
At the same time, food that has spoiled or not been cooked properly can be detrimental to your guests’ safety and the status of your restaurant. This is why it is important to have the best food safety practices and insurance protection from food contamination claims. The best approach is to be extra cautious with how food is cooked, handled, and stored. Please be careful and thorough when hiring chefs and kitchen staff. Also, it is essential to collaborate with your insurance provider to identify and mitigate potential risks.
5. Protecting Your Restaurant with Business Property Insurance
As technology constantly improves, so does the quality of restaurants and similar businesses. New equipment, locations, and services can all impact your restaurant coverage. Business property insurance is crucial because it protects the most valuable and essential components of your restaurant. Kitchen equipment, furniture, and other property will be covered in the event of a fire, windstorm, vandalism, or other covered events.
6. Fire Safety and Restaurant Insurance Requirements
Unfortunately, we’ve all seen it on the news: the devastating event that is a restaurant fire. With food constantly cooking on stovetops and in ovens, restaurants are a hot liability for fires. This is why it is of the utmost importance to make sure your business property insurance covers all aspects of fire prevention. The top causes of fires in restaurants are electrical-related, cooking-related, and improperly maintained equipment. Practicing fire safety and maintaining cleanliness with your staff members is also crucial in preventing accidents that can cause fires.
7. Business Interruption Insurance for Restaurants
Let’s face it, sometimes things happen that you cannot control. When your restaurant closes, even for a day, it can result in a significant loss of income. This is why Business interruption insurance is important coverage to invest in. It will help you when your business is closed due to an insured loss. Additionally, the coverage will compensate for your loss of income and help you and your business recover.
8. Why Your Restaurant Needs Umbrella Liability Coverage
Umbrella liability is beneficial in situations involving catastrophic events and lawsuits. Though not always used, it is extremely handy to have in case of an emergency. When it comes to employee issues, as a restaurant owner, you may want to consider Employment Practices liability as part of your coverage.
9. Liquor Liability Insurance for Restaurants and Bars
While a liquor licence can be very profitable for restaurants, there are some things you should keep in mind before applying for one. Standard liability insurance does not cover liquor-related claims. This includes intoxicated patrons who injure themselves or others while in or outside your restaurant. Liquor liability insurance is not only recommended for restaurants that wish to serve alcohol, but also for any business that sells, serves, or facilitates the purchase or consumption of alcoholic beverages.
Other Frequently-Asked Questions About Restaurant Insurance Coverage
What types of insurance do restaurants need in Ontario?
Ontario restaurants typically require general liability, commercial property, business interruption, equipment breakdown, liquor liability, and workers’ compensation coverage. Some businesses may also require cyber liability and employment practices liability insurance, depending on their size and level of risk.
How much does restaurant insurance cost in Ontario?
On average, Ontario restaurant owners can expect to pay between $2,000 and $6,500 annually for insurance, depending on factors like size, alcohol sales, location, staffing, and risk exposures. Small cafés may pay less, while bars or larger restaurants often pay more.
To learn more about Restaurant Insurance in Ontario, read our blog: What is Restaurant Insurance and Why It Matters
Can I bundle restaurant insurance policies in Ontario?
Yes! Many insurers offer customizable packages that bundle general liability, property insurance, and more into one convenient policy. Bundling often reduces premiums and ensures better coverage coordination.
Get a Customized Restaurant Insurance Quote in Ontario
Opening and running a restaurant doesn’t have to be overwhelming. Whether you’re launching your first business or expanding a franchise, isure can help you find tailored insurance solutions. Contact us today for a personalized restaurant insurance quote!
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