Running a successful restaurant in Brooklyn can be incredibly rewarding. But there’s a lot that can go wrong. Depending on the type of restaurant you own, you’re probably dealing with:
- Slippery floors
- Heavy trays with hot plates
- Food-borne illnesses and bacteria
- Sharp knives
- Hot stoves, etc.
If you serve alcohol or offer valet or delivery services, the list of things that can go wrong goes up.
How are you supposed to keep yourself, your business, your staff, and your patrons all safe and healthy?
Unfortunately, accidents can happen even when you do everything right. That’s why you need the right insurance coverage. How can you make sure you have all the coverage you need without paying for things you don’t need?
We know there’s a lot to consider, but if you only get 5 types of insurance for your restaurant, make sure it’s these five.
- Business Property Insurance
- General Liability Insurance
- Employment Practices Liability Insurance
- Workers Compensation
- Statutory disability
You need all these types of insurance to make sure your restaurant is protected. Each type of insurance protects you in different ways, too. We’re going to break down all the differences for you.
Business Property Insurance for Restaurants
Whether you rent or own the building you’re running your restaurant out of, you need business property insurance. If you own the building, it’s your most valuable asset. If you rent, it’s because you need that space.
Business property insurance can protect all your stuff inside the building, including:
- Kitchen equipment
- Personal property located at the building that belongs to you, your staff, or your patrons
Business property insurance can cover the cost of replacing any of the above lost due to fire or water damage, theft, or other all-too-common occurrences.
Check your policy or speak with your insurance agent for specifics on your policy. Yours should be unique to your restaurant. Not every business needs the same limits or cost of replacement.
Whether you own or rent the equipment and building you run your restaurant out of, you need business property insurance.
Most landlords of commercial property here in New York require you to maintain this coverage as a condition of the lease, anyway.
Do I Need Business Property Insurance If I Have a Business Owner’s Policy?
A Business Owner’s Policy (BOP) is an insurance bundle for business owners. It includes some of the most common types of insurance business owners tend to need. Most Business Owners’ Policies include:
- General liability insurance
- Commercial property insurance
- Business income insurance
But each insurance policy is a little different. So if you do buy a BOP, make sure it has all the coverage you need. You might need to add another insurance policy to supplement your BOP. That’s where an Umbrella Policy can help.
General Liability Insurance for Restaurants
At its most basic, general liability insurance can cover:
- Bodily injury
- Property damage
- Personal injury
Some of these are obvious, while some might need some explanation, so let’s take a look at what each category includes.
Slip-and-fall cases are probably the most common, especially in restaurants. They can happen if someone spilled a drink on your floor and it wasn’t cleaned up quickly enough. Or if your floor was mopped, but the “wet floor” sign wasn’t put out soon enough or was simply ignored.
The cost of medical expenses can be immense if a patron, vendor, or even a visitor to your restaurant slips and falls on your floor. If you don’t have general liability insurance, you’ll have to find a way to pay those expenses out of your own pocket. You’ll also have to pay the legal costs if you get sued.
If a staff member spills a drink or a plate of food on someone and ruins their clothes, you are responsible for replacing their property. You might even need to replace the contents of the purse, depending on the extent of the damage.
Personal injury coverage generally includes things like libel or slander.
For a restaurant, you might be thinking about all those bad reviews people like to leave online. But personal injury insurance can also cover the legal costs if your business gets sued for a snide remark from a disgruntled employee.
Employment Practices Liability for Restaurants
Employment practices liability insurance (EPLI) covers your legal costs if one of your employees decides to sue you.
It can be tempting to think that your employees would never sue you. But just because you get along now is no guarantee that will always be the case.
Consider the original Stonefire Grill employees who recently sued their employer. They claimed they helped make the restaurant the success it is. According to the lawsuit, the restaurant was guilty of age discrimination when it let them go from their jobs during the pandemic.
If you get sued and you don’t have EPLI, you’ll have to pay all those legal costs out of your own pocket. Better to have it and not need it than the other way around.
Workers’ Compensation Insurance for Restaurants
Workers’ compensation covers the medical costs if you or one of your employees gets sick or injured while on the job. Not only is it a good idea, it’s also required by New York state law.
You can’t get a business license in New York without proof of workers’ compensation insurance.
Statutory Disability Insurance for Restaurants
Statutory disability insurance covers your staff if they’re unable to work. More specifically, it pays part of their lost income if their disability was a result of getting sick or injured while not at work.
Like workers’ compensation insurance, New York state law also requires all businesses to have short-term disability insurance. Depending on your workers’ compensation insurance policy, statutory disability insurance might be included, but not always. It’s always a good idea to check and make sure you have all the coverage you need.
We know the world of business insurance is large and confusing. If your head is spinning with all the different types of insurance you need, you’re not alone.
If you’re opening your own restaurant here in Brooklyn or uptown in Manhattan, you need insurance. Your best bet is to connect with a trusted advisor who can walk you through the process.
At Lincoln Brokerage, we’ve been protecting Brooklyn businesses since 1932. We understand the unique risks and challenges New York business owners face. Our advisors can make sure you have all the coverage you need and keep you from paying for what you don’t need.
We’ve got your back. Connect with us and see how committed we are to protecting our neighbor’s — your business’s — assets.