Owning a business means being proactive when it comes to protecting your investment. Every industry is unique, which means the needs for your business are unique. Restaurant owners in particular have a wide range of risks that their daily services expose them to, making it more important than ever to ensure they have the right restaurant insurance coverage to protect them.
#1. Make Sure You Have the Right Coverage
Restaurants can be a hectic business, with a lot going on both in front and the back of the house. That means your coverage needs to be wide-ranging to protect you against liabilities and risks that could financially affect your business:
General Liability Insurance – Every business needs this type of insurance, as it helps protect against common liabilities from bodily injury to property damage.
Property Insurance – Restaurants have a lot of property that can be costly if it’s lost, from food to equipment. Property insurance with the right endorsements for your restaurant can help you cover most potential issues to avoid a financial hardship.
Liquor Liability Insurance – If your restaurant serves liquor, you are potentially liable for damage or bodily injury caused due to an intoxicated patron of your business.
Commercial Auto Insurance – Many restaurants, especially now, have adopted delivery services or have vehicles working as part of the business. Any vehicle used as part of your business needs commercial, not personal, auto insurance to be covered!
Workers’ Compensation Insurance – Restaurants have a lot of employees and accidents can happen due to the hectic nature of the workplace. Workers’ compensation insurance, or workers’ comp, is an important part of ensuring your employees are also protected if an injury or illness occurs on the job.
Business Interruption Insurance – This type of insurance is critical to help you stay afloat when your business is shut down following damage like a fire or theft.
These don’t cover all the potential insurance coverages that may be necessary or recommended for your business, but they’re a good place to start for new restauranteurs or those looking over their existing coverage! It’s always best to work with your insurance provider, asking questions, and thinking of what the most likely scenarios are that could financially affect your business.
#2. Work with an Insurance Provider that Knows the Restaurant Industry
Insurance is a wide field with a lot to cover. From personal insurance to commercial, every person or industry requires unique coverages relevant to their situation. Restaurants are a varied industry with a lot to plan for. Whether you’re a pizzeria, upscale dining location, bar or any of the many other types of restaurants, your needs will be one of a kind.
That means it’s more important than ever to find an insurance provider that’s right for you. Especially for new restauranteurs, it’s almost impossible to conceive of the financial liabilities your business can have. An experienced insurance agency can help you get the best coverage for the best price by matching you with insurance experts that are familiar with the industry you’re in.
#3. Don’t Fall into the “Lowest Premium Possible” Trap
One of the few things that’s not unique to restaurants is the desire for business owners to maximize their income by minimizing expenditures. While this is a great general business plan, there are some things where it’s worth it to remember that you get what you pay for!
Getting insurance with the lowest possible premiums can feel good in the short-term. And if nothing ever happens to your business, then it’s great! But the reality is, almost half of small business owners will need to file at least one claim this decade. It’s an unfortunate reality that insurance is ubiquitous commercially because of how valuable it is to your business. And when you need to make claims, that low premium insurance could cost you in the long run.
When planning your insurance, including premiums, deductibles, and the limits of the coverage, make sure to think critically about the potential risks to your business. What is the likelihood of a fire at your restaurant? Theft in your area? Injury on your premises? Work with your provider to get the smartest insurance, not the cheapest, and you’ll almost certainly come out ahead in the long run!
#4. Consider Umbrella Insurance for Your Business
Umbrella insurance is beneficial for any insured. Of course, for businesses, it can be the difference between shutting your doors after a major incident or continuing with business as usual. Umbrella insurance is a supplemental insurance that kicks in after your primary insurance reaches its maximum.
If a major accident happens in your business, you could be liable for medical expenses and litigation that ranges well into the millions. Depending on your insurance, your primary coverage may cap at a value lower than the amount you’re liable. That’s when umbrella insurance can save you from a major financial crisis! It helps cover the extra amount over your standard coverage, giving you an “umbrella” of protection against major claims that may affect you.
The best part of commercial umbrella insurance is that, because it only applies after your primary coverage, it can offer a high value of coverage for a smaller premium than you may think!
#5. If Your Business Changes, So Should Your Insurance
Getting the right coverage can be challenging because it’s about understanding your needs. You may spend weeks trying to figure out exactly what coverages your business needs to be financially stable! For that reason, it’s important to remember that as your business evolves, your insurance should evolve with it.
If you expand your business by adding new services, new locations, new equipment or anything that makes a significant change, you should sit down and reevaluate your coverages. In some cases, you may need to let your insurance provider know that you have something that increases your potential liabilities, or increases your maximum coverage due to expensive new equipment you recently had installed.
Being proactive with your insurance lets you stay ahead of the financial curveballs that life can throw at you! When it comes to restaurant insurance coverage it’s hard to be too careful. Spending a bit of time to review your coverages can save you time and money down the line!
Contact Iott Insurance for a Quote Today
Iott Insurance has been a part of southeast Michigan for over 50 years. We can help you plan your insurance needs and find you the right policies or plans to protect you.
Or you can visit one of our three offices in southeast Michigan:
Blissfield, MI – (517) 628-4574
Lambertville, MI – (734) 807-3825
Petersburg, MI – (734) 215-9884
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