How To Get The Best Restaurant Insurance

We love our food in the UK. From traditional fish and chips to gourmet cuisine, pub grub or vegan specials, we munch our way through millions of take-aways and restaurant meals every year. We’ve shaken off the reputation this country once had for ‘boring food’ and are now world leaders in fusion food, baking, and just about any type of cuisine you can think of.

However, running a restaurant is possibly one of the toughest career choices you can make. Whether it’s a franchise for a well-known brand or a family restaurant where everyone helps out, you can regularly expect to be working 18-hour days, seven days a week. Let’s be honest here – running a restaurant is not for the fainthearted!

The rewards, though, are amazing. Build up a good reputation for wholesome, delicious food and your customers will come back again and again. However, if things go wrong then you’re going to need to protect your business and your reputation. One bad meal can undo months or even years of hard work. To minimise the financial impact, you need the right insurance.

Why do you need restaurant insurance?

If you employ waiters, chefs, kitchen teams or front-of-house staff then legally you must have employer’s liability insurance. Even if those staff are family members, sub-contracted or part-time, as an employer you are legally required to have insurance. In an environment where slips and trips can happen very easily, it’s important to make sure that if a member of staff makes a claim against you for an injury in the workplace, that you have the right kind of cover to protect you financially from the costs of any legal case and the subsequent compensation.

The Heath and Safety Executive has extensive notes and guidance for restaurant owners. You can find out more about Employer’s Liability Insurance cover and what you are legally required to have here.

There is also a whole raft of ways that your business can be impacted. To protect yourself as comprehensively as possible you need specialist insurance packages that are specifically tailored for the catering industry.

What to consider

When you’re putting a package together, you’ll need to think about the following types of cover:

  • General liability cover – aside from the mandatory Employer’s Liability cover, it’s recommended that you also have a general public liability insurance policy as part of your restaurant insurance package. This will protect you against the financial consequences of complaints from members of the public, whether they’re paying customers or not. So for example, if someone slips over outside your restaurant and it’s found that the trip was caused by a discarded food carton from your establishment, your financial situation will be protected against the impact of a compensation claim.
  • Public liability cover will also give you a degree of financial protection if you are sued for a case of food poisoning. If a customer falls ill after eating at your restaurant, the financial consequences can be considerable. Bear in mind that failure to provide information on ingredients that may cause allergic reactions could also result in a customer making a claim.
  • If someone has a trip or fall inside the restaurant, public liability cover protects you from the cost of an injury compensation claim. It won’t help protect your reputation as an establishment, but it will safeguard your finances.
  • Food contamination or stock cover – Restaurants depend on refrigeration to store food safely. However, if your fridge or freezer fails, you’ll have no option than to throw everything away to avoid any risk of contamination, no matter how small. Food contamination insurance or stock insurance covers you for the cost of replacing the contents of your fridge or freezer, whether it’s meat, vegetables or other consumables.
  • Property insurance – normal buildings and content insurance simply won’t cover all the unique items you have in your restaurant, such as front-of-house tables and chairs, the bar fixtures and fittings, and of course, your kitchen. Make sure your broker finds property insurance that is specifically designed to cover restaurants. Insurers often regard restaurants at higher risk of damage by fire, so expect to pay a little more than you would for standard home insurance.

Other insurance

Other insurance cover you may need includes:

  • Specialist car or van insurance if you make deliveries.
  • Fleet insurance for delivery riders.
  • Legal cover that will compensate you if you are forced to take legal action against a supplier.
  • Key personnel cover which provides financial compensation if a key member of staff (such as your head chef) suddenly is unable to work through illness or injury.
  • Loss of earnings cover so that you can keep paying your bills if your business is unable to operate. For example, if you get flooded out or the restaurant is closed after a fire.
  • Money cover – insurance against the theft of your cash on the premises or on the way to the bank.

How can you make your restaurant insurance cheaper?

Nobody likes admin. It’s the bane of all small businesses, but there’s no escaping the fact that insurance is an absolute essential these days.

Insurance premiums are calculated on the level of risk the insurance provider believes they are exposed to. So if you have a history of making claims, your insurance will inevitably be higher (in exactly the same way that motor insurance premiums go up after you’ve made a claim). The only way you can avoid that is through good business practices.

Our top tips:

  • Don’t wait for HSE to carry out inspections. Create a checklist of safety aspects that should be done on a daily, weekly and monthly basis, so that your restaurant is a safe place for both customers and staff.
  • Carry out regular safety training and best practice training for all your staff, especially kitchen staff.
  • Put adequate security systems in place to prevent claims for theft or vandalism.
  • Talk to an insurance broker that specialises in restaurant and catering insurance. They may be able to put together a ‘package’ or bundle that will keep the overall cost of your insurance bill down.
  • Keep your property well maintained, and ensure that all equipment is serviced or replaced on a regular basis to avoid breakdowns and subsequent spoilage of food due to refrigeration failure.

Talk to the experts

For over 30 years, Park Insurance has been providing specialist insurance cover to the restaurant trade and catering industry. Our brokers don’t just know about insurance, they know about your business too. Find out more by contacting Park Insurance on 0117 955 6835 for a no-obligation quote.

This article was originally published in September 2016. It has since been completely updated to provide you with the best and most accurate information.