What insurance does a restaurant need?

This is the claim general liability was built for. On the NAIC's list, a commercial general liability policy answers four categories of event, and the first two are the ones a dining room produces: bodily injury and damage to someone else's property. The other two, personal injury such as slander and libel, and false or misleading advertising, matter less often here (NAIC, Insure U: Small Business Insurance). A wet floor by the server station, a chair leg, a step down into the bar: the policy answers, and its general aggregate is the pot those claims draw from.

Every restaurant needs this one, and almost every restaurant has it, which is why the interesting question is the next claim rather than this one. Detail is on restaurant general liability insurance.

Same policy, different half of it, and the difference matters. Products-completed operations is the hazard covering liability arising out of the insured's products or operations, and in its unendorsed form the injury has to happen away from your premises, which a dining room plainly is not. ISO's classification table calls for the Products-Completed Operations Hazard Redefined endorsement, CG 24 07, on restaurants, removing that requirement so that, in IRMI's own example, a customer alleging food poisoning from a meal eaten at the restaurant falls inside the hazard despite the injury happening on the premises. Claims inside it draw on the products-completed operations aggregate, which is separate from the general aggregate (IRMI, products-completed operations; IRMI, the hazards of products and completed operations).

So the thing to confirm is not whether you have general liability. It is whether the endorsement is on it, and what the second aggregate is. One more distinction while you are there: contamination and recall costs, laboratory analysis and moving product, are first-party expenses rather than liability, and III describes contamination coverage as something to consider adding for food (III, product liability, recall and contamination insurance). The liability policy pays the person who got sick. It does not pay you to throw out the batch.

Workers compensation, and this is the one whose answer depends on your state rather than on your policy. The NAIC says nearly all US states require employers to carry it and tells owners to check with their state insurance department (NAIC, Insure U: Small Business Insurance). California requires it from the first employee and treats operating without it as a criminal offense (California DIR, employer information), while the Texas Department of Insurance says private employers there can choose to carry it and it is not required in most cases (TDI, workers compensation for employers).

Both facts point at the same next step: read your own state, because a national article is describing someone else's kitchen. The state pages carry that, starting with Texas, California, Florida, and Colorado.

Two coverages meet here and owners routinely have only the first. Property answers for external events: fire in the hood, a windstorm through the patio, vandalism. Standard property forms exclude the internal ones, mechanical breakdown, artificially generated electrical energy interfering with an electrical device or system, and the explosion of owned or leased steam boilers, pipes, engines, or turbines. Equipment breakdown coverage exists for those, paying to repair or replace the equipment and other property damaged by the breakdown, often with the business income that follows (IRMI, equipment breakdown insurance).

The food inside the walk-in is a third question, and it usually lives inside the second coverage rather than on its own. IRMI's checklist for reviewing an equipment breakdown policy names sublimited coverage for perishable items among the things to check (IRMI, equipment breakdown, more than just boiler and machinery), so the question is how much, and on what trigger. Both are on equipment breakdown insurance.

This is the claim that is not in the policy you already own. III: "if you do not purchase this extra coverage, your standard commercial general liability policy does not protect your business against liquor-related claims" (III, commercial general liability insurance). The law behind it is state law, dram shop liability, which III counts in 43 states, most of them letting an injured person sue whoever served the alcohol (III, social host liability).

A restaurant that pours anything at all should ask for liquor liability by name and read what it covers. The Texas statute worked through section by section is on Texas liquor liability insurance, and the operating picture for a bar-forward business is on bar and restaurant insurance.

The moment food leaves in a vehicle, a different policy is in play. The NAIC advises that a business owning or leasing a vehicle needs commercial auto coverage, that commercial policies carry higher liability limits than personal ones, and that owners relying on personal coverage for business use should look closely at the provisions, because personal policies may exclude business-related liability (NAIC, Insure U: Small Business Insurance). Staff using their own cars for deliveries is the version most restaurants have without realizing it, and it has a name to ask for: hired and non-owned auto.

Where the vehicle is the kitchen, the whole picture moves onto it: food truck insurance, and in Texas the central preparation facility rule that shapes the operation is on Texas food truck insurance. Off-site service at events is catering insurance.

An umbrella policy provides excess limits when the limits of the underlying policies are exhausted, drops down and picks up where an underlying policy leaves off when that policy's aggregate is used up, and can cover some claims the underlying policies do not, subject to a retention (IRMI, umbrella liability policy). For a business that seats strangers, employs a crowded kitchen, and may serve alcohol, that is not an exotic purchase. What it does and what it does not, including how it differs from plain excess liability, is on restaurant umbrella insurance.

Two closing notes. A package may or may not be available: the III names restaurants among the businesses that may be ineligible for a businessowners policy and says such owners may need to buy the coverages separately (III, understanding businessowners policies), which is worked through on businessowners policy. And nothing above comes from a federal insurance rule, because there is not one: the FDA Food Code is a model that states adopt and local jurisdictions enforce (FDA, state retail and food service codes by state). What each coverage costs, and what moves it, is what sets a restaurant's insurance cost.