Running a restaurant can be rewarding and lucrative, but also comes with great responsibility. For a customer, restaurants are as simple as walking in, sitting down, ordering whatever looks tastiest on the menu and paying. Restaurant owners, however, see all the behind-the-scenes logistics that determine whether a dining establishment succeeds or shuts down. Business Insider reports that 60 percent of restaurants close within a year and 80 percent fail within five years. What measures should you take to help your restaurant dreams succeed?
Business insurance for restaurants is the building block of any sustainable eatery. Nothing forces a restaurant to close its doors faster than a costly lawsuit from a guest or staff member. Here are five reasons why your restaurant needs the right commercial insurance protection.
Kitchen disasters happen regularly
Most people don’t encounter open flames, temperamental appliances and scurrying coworkers every time they head to work, but working in a kitchen isn’t an everyday job. The potential for a kitchen mishap is high. One untimely fire could damage your specialized equipment and your workspace, forcing you to shut down until the situation is fixed. This is exactly why restaurants need property damage insurance with business interruption coverage.
Having a business insurance policy in place will help you get back on your feet by reimbursing you for the cost of the damaged equipment due to a fire, theft or vandalism. It may also help you cover your bills if the incident is bad enough to temporarily halt your operations.
In case an accident injures a guest on your premises
What if your best waiter or waitress is having an off day and spills an entire pot of coffee on an unsuspecting guest? An otherwise run-of-the-mill day can turn from normal to disastrous in a split second in the restaurant business. A general liability policy that covers bodily injury to others would handle this claim, and could even lessen the likelihood of a major lawsuit by swiftly covering the injured party’s medical bills.
Staff members may get hurt on the job
During busy shifts, workers often carry dozens or hundreds of heavy loads between the dining room and the kitchen. Hefting huge trays above their heads, lifting heavy bins of dishware and balancing multiple orders on their arms takes serious skill. What if one of your staff members tweaks their back while cleaning up after a party of eight? Your business is technically responsible for their injury. That’s where workers compensation comes in. This coverage is mandatory for businesses and helps pay for employee’s medical bills and time lost after a workplace injury. It also protects your business from a lawsuit over workplace conditions, making it a win-win proposition.
In case a customer seeks damages for alleged food poisoning
We all remember the infamous E. coli outbreak affecting 55 people who ate at Chipotle restaurants in 11 states a few years back. While restaurants follow stringent health codes and should do everything in their power to prevent foodborne illness, customers can and do sue for damages after claiming that a certain restaurant made them sick. Without enough liability insurance in place, one health-related lawsuit could bankrupt your restaurant.
Restaurant cyber security hacks are on the rise
Last year, over 1,000 Wendy’s restaurants suffered a cyber breach that compromised their customers’ personal and payment data. Restaurants are popular targets for malicious cyber hackers seeking access to information they can use or sell. If your restaurant becomes the next victim of an online data breach, you could face a timely and expensive period of damage control that threatens to close your restaurant’s doors forever. Cyber insurance covers many costs associated with a data breach and can protect your company if an affected customer sues.
There’s no one-size-fits-all approach to properly insuring a restaurant. Your coverage needs depend on the size, location and nature of your operation. Ready to explore your options? Learn more about business insurance for restaurants through CoverHound today.