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What Does Liability Insurance Cover for Restaurants?

Running a restaurant can be rewarding, but you will deal with multiple risks. To offset the risk and limit financial loss to the business, consider getting restaurant and bar insurance coverage. Investing in general liability insurance is a legal requirement every business must meet, and it helps you qualify for leases and contracts. Here is an outline of what liability insurance covers for restaurants:

Damage to Rental Property

Using equipment like stoves at a restaurant poses a threat to the rental property you occupy. If your business activities damage property you rent from a third party, your business is liable. General liability insurance protects your business from financial loss due to such claims.

Any venues you rent or business premises, stores, and offices must remain covered under the liability policy. In the event of a fire that can damage the building and equipment, your insurer will cover all repair and replacement costs. They can help you deal with the loss of business for the period that renovations are underway.

Advertising Liability

Getting creative when marketing your business can be tricky; there are often many red lines that can affect the outcome. Your ad might infringe on the rights of competitors who could sue your business. Some may claim your logo coincides with theirs and file charges for copyright infringement.

Your general liability insurance protects your business against advertising liability. Coverage for advertising liability involves copyright infringement and misleading or false advertising charges. Your insurer will settle all related costs, including court fees, lawyer retainer, and settlement amount.

Reputational Risk

Your restaurant is a brand, so it has a reputation to maintain. Competitors can interpret that anyone involved with the brand, like yourself or the employees, works on its behalf. This opens you up to reputational risk if they act maliciously.

Your restaurant might be liable if an employee disseminates damaging information about another competitor’s brand. The employee’s remarks may lead to your business being sued, posing the threat of financial loss.

Your general liability insurance protects your business from financial loss due to such claims. Some of the charges that your policy will cover include:

  • Libel or slander
  • Privacy violation
  • Malicious prosecution
  • Privacy violation
  • False arrest

Property Damage

Damages resulting from incompetence within your establishment can pose a financial risk. If your business activities cause damages to third-party property, the owners can sue your restaurant for damages. General liability insurance coverage helps cover third-party property damage.

If your employee spills a beverage on a customer’s computer when serving them, you may be liable for the replacement or repair of the laptop. Your insurer caters to repair costs and others like court and representative fees if they decide to take the case to court. Having your insurer offset the costs prevents financial loss to your restaurant, allowing you to operate normally.

Bodily Injury

Whatever you serve at your establishment must abide by the state’s health codes. Your products or services can accidentally cause bodily injury to patrons within your establishment. Your business is liable for bodily injury claims due to the products or services you have at your establishment.

If a patron slips on a wet floor and falls, injuring themselves, your business might have to cover rehabilitation costs. General liability policies prevent financial loss by paying for the client’s medical cost on your behalf. Should they choose to go to court, your insurer will cover court levies, lawyer fees, and the settlement amount depending on the verdict.

Liquor Liability

While you may require a separate liquor liability policy if your restaurant sells or manufactures alcohol, some general liability policies offer a basic liquor liability provision. Liquor liability in a general liability provision covers special instances where your business sells alcohol.

If an intoxicated customer falls at an event where you serve alcohol, your business may be liable. General liability insurance will cater to the liquor-related accident costs, even though you do not serve drinks at your physical establishment. This saves your business the financial commitment of having to cater to rehabilitation costs.

Get A Comprehensive Restaurant & Bar Insurance

Restaurant ownership can be a rewarding business, but it comes with risk exposure. You need general liability insurance to offset the financial loss to the business from risk incidence. Getting adequate restaurant & bar insurance can prevent financial loss, allowing your business to continue operating normally.

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