Insurance is one of the most important things to consider when opening a restaurant. It is extremely important to make sure that your business is insured for all the possible risks that come along with a restaurant.
When looking for restaurant insurance, the owner would want to look the following insurance types and decide which are desired, and the premium amount for each will depend entirely on the amount of coverage and other factors:
*General Liability Insurance
*Property Insurance (coverage for the building and the contents within)
*Liquor Liability Insurance (If the restaurant is going to serve alcohol)
*Workers Compensation Insurance
*Business Income/Loss of Income Insurance
*Employment Practices Liability for Sexual Harrassment, Wrongful Termination, or discrimination will usually add about $1500 a year.
Typically, any type of restaurant, no matter it’s size, will want to purchase General Liability insurance.
While it is difficult to give an exact premium on a restaurant, some things can be considered in order get a estimated figure. Commercial insurance premiums are dependent upon a number of factors. Once exact information is obtained by the insurance agent, a premium can be determined. Gross receipts, location, payroll, and value of property and contents will be some pricing factors.
The following premiums are ball park figures, based on the size of the restaurant and also taking for granted that there have not been any previous claims:
*Small restaurants with gross sales between $200,000 and $800,000 a year with a General Liability policy and $150,000 in coverage on contents will generally run around $1800 a year and worker compensation is typically around $3000.
*Large restaurants that are “family style” (like many chain restaurants or buffets) with gross annual sales of $800,000 to $1,000,000 with a General Liability policy that has $400,000 in contents coverage will usually run about $5000 a year, and approximately $8,000 annualy for workers compensation insurance.
*Large restaurants considered “fine dining” with gross annual sales over two million a year and property/liability coverage at one million or higher will typically run about $10,000 a year and $15,000 a year for workers compensation insurance.
When developing a budget for the restaurant, you can use the above amounts to get a preliminary idea. Add in around $2000 just to give room for a higher premium.
Contact an insurance agent in your area that specializes in commercial lines of insurance to get an exact quote.