Your Guide To Restaurant Insurance

Restaurants have certainly been put through the mills recently – what with specialist governmental legislation on what constitutes safe operation, and continual opening and closure. We know that it’s not been easy, but we truly believe that things can only get better from here on out. No-one could have predicted coronavirus, but we can prepare for other unforeseen circumstances, such as fires, loss of stock, and product liability cases. We understand that finding a suitable restaurant insurance policy can seem overwhelming and that’s exactly why we created this guide. Here to detail what your policy could include, and why it’s a necessity, we hope it helps. And if you have any further questions, we’d be happy to help in any way we can. Simply get in touch with us and we can offer even greater insight, and a restaurant insurance quote too.


What is restaurant insurance and what type of insurance does a restaurant need?

Restaurant business insurance is cover in one single policy that can include a variety of key covers. Falling under policies such as Thai restaurant insurance, Takeaway Insurance, Fast Food Outlet Insurance, Bistro Insurance and Pizzeria Insurance can be cover including: Public Liability, Product Liability, Employers’ Liability and Business Interruption, as well as Loss of Money Cover, Seasonal Increases, and Stock Cover. Designed for a vast range of restaurant owners and managers, these insurance policies can provide protection from unexpected events, and be tailored to your unique range of business requirements.

Nobody wants to think that their business will be the cause of damage to property, a food poisoning or an employer liability case, but as we all know, mistakes do happen. You could be held liable for costs of the resulting damage. Restaurant insurance can cover you for this, protecting your reputation and business.

By including a range of insurance policies under one policy, it also makes the claims process, as well as the renewal process, much easier. A restaurant insurance policy means you only have one policy to deal with, and one renewal date to remember. You don’t want to have to spend long hours administrating various insurance covers and policies for different aspects of your business, and with this cover, you don’t have to.

The type of insurance your business needs will depend on various factors, but in general, all restaurants need policies such as Product Liability, Public Liability and Employers’ Liability – in case claims are brought against you by customers and your staff. If you sell alcohol, then Loss of Licence cover could be a good shout, to recuperate any losses you make due to this. Beyond this, Stock Cover can mitigate any losses due to theft, damage or destruction, whereas Seasonal Increases can take account of any busy periods where an increase in stock intake is common – perhaps during the holiday season.


What else can restaurant insurance cover?

From Kebab restaurant insurance, Italian restaurant insurance and Thai restaurant insurance through to Takeaway restaurant insurance, Fast Food Insurance, Bistro Insurance and Pizzeria Insurance, there are various types of policies around, including restaurant liability insurance. The cover this can comprise includes: 


1)Product Liability: If you run a restaurant, café, bar, or other business that serves food, you risk being sued by customers who claim that your food made them ill. Regardless of how well your staff is trained in food handling and safety procedures, your restaurant could inadvertently serve contaminated food products. Food can become contaminated with bacteria, viruses, parasites, or other toxins in a variety of ways:  Your restaurant’s supplier provides tainted ingredients; An employee undercooks food or leaves it on a counter at an unsafe temperature; Juices from meat get on items in the refrigerator that will be eaten raw. If a customer gets sick from the food you serve, or there’s a foodborne illness outbreak at your restaurant, you could be found liable and required to pay damages to cover medical costs and other related expenses. If the damage is extreme, your restaurant could be shut down. Product Liability can help pay toward damages and compensation sought.

2) Public Liability: If a waiter spills soup on a customer, Public Liability insurance would cover any damages or claims of injury that is made against your restaurant. This extends to other injuries too – falling over a loose wire or crate, or having their property damaged, for example. What’s more, this cover can include injuries due to trespassing, false arrest and malicious prosecution. You may be very safety-conscious, but accidents do happen, and with Public Liability Insurance, you’re covered. At The Insurance Octopus, our standard levels of cover are available from £1m to £5m, with additional levels of cover available upon request, subject to terms and conditions.


3) Employers’ Liability: Your staff are the backbone of your restaurant. They set the tone, and encourage customers in having a good time. They create delicious dishes. They set the decor. They make your business the success it is. For all of these reasons and more, they deserve to be compensated if they suffer an injury while working – perhaps due to slipping on a wet floor, or burning their hand on a hob or oven. Employers’ Liability would cover the medical costs, compensation and legal fees if they make a claim against you.

In the UK, it is a legal requirement for you to have at least £5 million cover to compensate your team for any bodily injury, mental injury or other claims made against you, even if they are part-time employees, volunteers or trainees. Our Employers’ Liability for restaurants comes with £10 million indemnity cover, ensuring you’re covered against many circumstances.


4) Business Interruption Insurance: Unexpected events – such as fires, floods, vandalism, and even loss of licence – can really take its toll on your profitability, and ability to do business. There to protect your business against any loss of income, Business Interruption Insurance can pay out on loss of gross profit, as well as the costs and expenses incurred by you to minimise the reduction in gross profit subject to your insurers specific terms and conditions. Here at The Insurance Octopus, our policies can also include interruptions caused by water, gas, electricity and internet services.


5) Stock & Contents Cover: What goes into all those appetisers, meals and desserts you so lovingly create? What makes them so easy to present, consume and use all over again? It’s your ingredients, crockery and appliances of course – which are all fundamental to your business. Without them, it’d be pretty difficult to operate, and the costs of replacements could be hefty. With Stock & Contents Cover, you can ensure that your business items – along with personal items that you keep onsite – are kept safe. Providing compensation on everything from refrigeration faults, electricity failures and dishonesty caused by those working for you, our Stock & Contents Cover is quite extensive.

6) Loss Of Licence Cover: If your menu contains alcoholic beverages, then it’s important that you have a licence that allows you to sell those drinks. You could end up paying extortionate fines without a licence, and potentially even get a prison term – should you serve alcohol without one. Hence when it comes to your business, it’s never worth the risk of breaking the law. With our Loss Of Licence protection, if your licence is revoked according to the insurers’ terms and conditions, you will receive compensation for loss of earnings.

7) Loss Of Money Cover: You may do your utmost to secure your business and its property, but even the best protected restaurants can have money stolen by aggressive or forcible means. You may only lose £50. It could be £5000. Whatever the value, any amount of money that goes missing can impact your business, and what you can afford to pay for. To protect your financial security, Loss Of Money insurance guarantees that you are protected against such losses. You can receive reimbursement for the amount taken, regardless of whether your money was stolen during working hours, when in a bank night safe, while in a locked safe while your restaurant was closed, while in transit or not in a locked safe while closed for business, so that you can get back to work as soon as possible.

8) Seasonal Increases: Your stock levels may fluctuate throughout the year, especially during popular periods such as Christmas and Easter. You want to ensure that you have enough ingredients to meet the needs of your customers, and therefore make as much profit as possible. If your current policy only covers you for a specified number – or amount – of stock, then we recommend covering any increases in stock in case of any damages, destruction or spoils. This cover means your ‘sums insured’ can also increase, protecting your whole inventory.

Considering the impact of coronavirus, you may need to insure less stock, and therefore amend your policy to take account of this.

Restaurant business insurance can also cover Shop Front & Glass, Entertainers Insurance, Legal Expenses and Fixtures & Fittings, among other useful policies. It’s important that with all policies that you check the specific terms and conditions outlined so that you know the exact cover you have, and not be left with any nasty surprises when you need the cover the most.


Restaurant insurance advantages, and your questions answered

A restaurant insurance policy offers many benefits, including:

  • Under one useful policy, it can protect your restaurant from risks such as Public Liability, Product Liability and Employers’ Liability, as well as provide cover for damaged stock, stolen contents, and loss of money. Restaurant business insurance also ensures that the effect of losses on your business processes and practices is low, and that your restaurant can be fully operational as soon as possible.
  • Policies can be tailored to the size of your business (eg independent restaurant vs. chain), the number of staff, business operations, and location. They can be tailored to suit the specific needs of your business too, ensuring that all facets are covered. For example, an authentic pizzeria, buffet restaurant and fine dining restaurant will all have differing requirements.


The most popular questions we get asked surrounding this policy type includes:

Why is insurance for restaurants important?

From food poisoning, food borne illnesses and damage to personal belongings through to theft, loss of stock, and business interruption, there are many risks that can unexpectedly impact your business, and your ability to function properly. These risks, especially the ones that relate to the health and safety of your customers, can result in very expensive court cases, damages sought, and compensation. Therefore, it’s important that you have the right cover to protect not only the people who eat at your restaurant, but also your business itself.

Examples of unexpected issues that may arise include: a slip due to a spilled drink or food; an employee injury either in the kitchen or whilst serving food; or deterioration of freezer stock loss due to an electrical fault.


Can restaurant insurance cover business premises?

Should you own the property which you operate from, or if you’ve made significant alterations to a rented space, then at The Insurance Octopus, we can provide you with Buildings Insurance as part of your policy. Providing cover in the event of damage, this includes damage caused by storms, floods, subsidence, landslip and heave, as well as escape of water. We will pay the cost of rebuilding your premises following one of these events, and pay for any repairs necessary to get your restaurant up and running again.

What restaurant insurance exclusions are there typically?

This is entirely dependent on the policy that you take out. However, general exclusions – in relation to our policies – include the following:

  • Contents Insurance: We will not pay for losses caused by wear and tear, clear defect, fungus, rot, vermin or infestation. We will also not pay for any loss or damage to any vehicles, phones, laptops, tablets, PDAs or wearable technology while away from the insured restaurant.
  • Equipment Breakdown: We will not pay for any losses caused by a computer program or a virus that has been maliciously introduced.
  • Employers’ Liability: We will not pay for claims made for bodily injury occurring offshore, suffered where motor insurance is involved or due to deliberate or reckless acts caused by the policyholder.

We’ll always discuss exclusions with you whenever you enquire about, or take out a policy with us.


Get In Touch With The Insurance Octopus 

Regardless of whether you run a kebab shop, Italian restaurant, Thai restaurant, takeaway restaurant, or fast food outlet, a restaurant insurance policy can help to keep you protected. We hope this guide has helped shed light on any aspects of the policy you were uncertain about, and if you’d like one yourself, we can help. We encourage you to get in touch with us today on 0161 968 2041 for your very own restaurant insurance quotes.