How much is business insurance for a restaurant?

03 April 2019

There’s no doubt about it; running your own restaurant can be immensely rewarding. After all, it enables you to indulge your deepest passion for great cuisine, while also regularly seeing the fruits of you and your employees’ efforts – not to mention the smiles and satisfaction of your customers.

But of course, the very fact that restaurants exist to prepare and serve food for the general public also means this line of work presents a wide range of risks, including many that you might not have considered.

Whether your own establishment is all about fast food, haute cuisine or anything in-between, there’s just so much that could potentially go wrong, even when the most conscientious procedures are followed.

Food poisoning is a recurrent and high-profile risk with restaurants, for example, but it’s also possible that a staff member or customer could slip and injure themselves due to spilled drink or food. Or what if an electrical fault strikes that leaves the items in your fridge deteriorating, thereby being rendered unusable?

Waiter with plates

An extremely wide range of factors must be considered

We could go on and on, but the point is this: so varied and unpredictable are the risks that confront even the simplest and best-run restaurant businesses that it’s difficult for us to present any single ‘ballpark’ figure for how much establishments like yours can expect to pay for restaurant insurance. It all comes down to the specific risks and circumstances that apply to your business.

It might be that you only have to fork out a few hundred pounds in premiums a year for your own restaurant cover... or the cost may instead exceed £1,000 or more.

Different risks bring a need for different elements of insurance – so let’s take a look at some of them, and consider how they may heighten or lessen how much you pay for restaurant insurance.

Do you own your restaurant building?

This is one of the ‘biggies’ in determining your eventual restaurant insurance quote. If you rent the space your establishment occupies, it should be your landlord’s responsibility to take out buildings insurance. But if the building belongs to you, it’s well worth considering buildings cover that would pay for the cost of repairing any damage to the structure of your building, or even rebuilding it.

After all, adverse weather conditions or fire could easily strike and render your restaurant building unsuitable for use for a while. Not having buildings insurance in place could therefore imperil the entire future of your business.

What if something happens to your equipment or stock?

We’re saying both equipment and stock here, because the condition of both is finely intertwined. Should your commercial fridge or freezer break, for instance, the items already in there will immediately start to warm up and defrost, which means you won’t be able to use them.

So, it’s not just equipment you’re suddenly having to pay for and wait to have repaired – you’re also losing rapidly rotting stock, so that’s yet more money you’re losing. Oh, and your kitchen staff have been halted, so you won’t even be able to serve your customers as normal during this time.

Thankfully, by specifying equipment and stock insurance as part of your wider restaurant insurance quote, you can cover such things as the cost of repair and replacing the part of the fridge or freezer that broke. Such cover is an added cost, but one that will almost certainly be well worthwhile, even if just for peace of mind.

Don’t forget the risk of staff and customer injuries, too

One thing that characterises every successful restaurant is the constant hustle and bustle of customers and employees moving from one part of the establishment to another. It’s a situation that naturally creates considerable scope for accidents capable of causing injury.

You shouldn’t be surprised, then, to learn that employers’ liability insurance is a legal requirement for restaurants with full-time, part-time or temporary staff.

It’s insurance that you’ll be immensely thankful for having purchased if a chef, porter, cleaner or other member of your staff falls ill or is injured as a direct consequence of their working environment, and therefore decides to take legal action against you for compensation.

In that situation, employers’ liability insurance should cover all of your solicitor and legal fees. However, there are different levels of cover at different price points, so you will need to consider the trade-off between lowering the cost of your restaurant insurance and giving your business the best possible level of protection.

Public liability cover works on much the same basis for any customers who may become ill or sustain injury due to their interaction with your restaurant. This cover isn’t legally required, so you might be tempted to skimp on it, but we would very strongly urge you not to do so. After all, it only takes one accident to potentially find yourself in a position of your restaurant’s financial future being under threat, should you not have this cover in place.

There’s always more you can do to lower your restaurant insurance costs

Fortunately or unfortunately, the above are not the only components that you may need your chosen restaurant insurance policy to include. The likes of contents cover and loss of licence insurance may be further elements that significantly bump up the price of your policy.

Comparing quotes from different insurers is certainly one thing you could do to bring down the expense of your policy, in addition to turning to a broker like Be Wiser Business Insurance to do all of the tricky work for you.

However, you should also note that our qualified and experienced professionals will place the firmest emphasis on the quality of the policy we present to you, rather than merely the cheapest price.

Nonetheless, our commitment and diligence with regard to bringing you the best possible restaurant insurance, combined with such measures of your own as running a yearly safety MOT on your kitchen and investing in the highest standard of safety equipment compliant with UK food regulation and legislation, could go a long way to helping you to save considerably on this vital cover.