Restaurant Insurance: Everything You Need to Know

Restaurant insurance includes various commercial insurance policies that are critical to protecting your business and its employees from financial losses following an accident or other covered event. The policies each restaurant needs may vary, but opting out of coverage could result in high out-of-pocket costs if you need to file a claim.

Restaurant insurance and restaurant liability insurance protect your business from out-of-pocket costs caused by property damage, employee injuries, theft, lawsuits and other covered claims.

Read on to learn more about restaurant insurance, including what types of businesses should consider it, what policies may be most beneficial and what factors influence premium costs.

Key Takeaways

Restaurant insurance includes various commercial policies that cover risks a restaurant may face, including medical bills, property damage and resulting lawsuits.
Restaurant insurance policies can include general liability, commercial property, workers’ compensation, liquor liability insurance and other forms of coverage, depending on a restaurant’s individual coverage needs.
Restaurants with employees or restaurant-owned vehicles may need workers’ compensation and commercial auto insurance, respectively, to meet state insurance requirements.
Factors such as your restaurant’s location, customer volume and number of employees can affect your monthly restaurant insurance premiums.
Find affordable insurance for restaurants by comparing quotes from multiple insurance carriers with the help of a licensed insurance agent.

What Is Restaurant Insurance?

Restaurant insurance includes various commercial policies that help cover against certain business risks. Restaurant insurance often protects against high out-of-pocket costs related to lawsuits, property damage, customers’ medical bills, and other covered losses, with specific risks covered varying based on your policies. Additionally, some forms of insurance may be legally required for restaurants to operate, depending on state laws.

How Does Restaurant Insurance Work?

Restaurant insurance works by filing a claim under a specific insurance policy after a covered event occurs. If your claim is approved, you’ll be reimbursed for financial losses you incurred due to the event or have associated costs covered, up to your coverage limits and after you’ve paid your deductible.

Since restaurant insurance refers to multiple types of commercial insurance used by restaurants, you’ll need to ensure you have the necessary policies to run your business. Without the right coverage, certain claims for losses may be denied, and you’ll be forced to pay any expenses out of pocket. For example, if a sudden power surge fries your restaurant's freezer and spoils your food, you may be left covering the costs of replacements and repairs without equipment breakdown coverage.

What Does Restaurant Insurance Cover?

Restaurant insurance coverage will vary based on the types of commercial insurance policies you’ve purchased, but often includes some form of general liability to protect against third-party injuries, property damage and resulting lawsuits. Based on your insurance policies, you could be covered for:

Injuries to guests or damage to their personal property
Damage to your restaurant’s physical property, including restaurant-owned or rented equipment and tools
Lost income and medical bills for employees who are injured or fall ill while working
Damages or injuries caused by an accident involving a restaurant-owned vehicle
Damages or injuries caused by an intoxicated guest whom you’ve served alcohol
Losses from spoiled or contaminated food
Repairs or replacements to restaurant equipment after a sudden mechanical or electrical failure
Ongoing expenses if your restaurant is forced to suspend operations, due to a covered loss, such as significant building repairs after a fire
Lawsuits over alleged mistreatment or discrimination against employees
Losses for crimes and thefts that employees commit against the restaurant
Lawsuits over damage the restaurant may cause to the environment

Who Needs Restaurant Insurance?

Restaurant insurance should be considered by any business that handles or sells food and beverages to customers, including:^[1]

Cafes
Cafeterias
Caterers
Coffee Shops
Delis
Fast Food Restaurants
Fine Dining Facilities
Food Vendors
Full Service Restaurants
Ice Cream Shops
Juice Bars
Private Chefs
Sandwich Shops

What Types of Insurance Do Restaurants Need?

types of restaurant business insurance coverages infographic

Restaurants face a number of risks while running their businesses and should consider several types of commercial insurance policies to ensure adequate coverage. We’ll cover some of the types of insurance restaurants need or should consider below.

General Liability Insurance

General liability coverage insures your business against claims of bodily injury, property damage and personal or advertising injury. It can pay for medical treatment and property repairs if someone is injured or has their belongings damaged on your property, and it can also cover legal expenses arising from these situations or from instances in which your restaurant is accused of defamation or copyright infringement.

Depending on your insurer, a general liability policy may also automatically include product liability coverage.^[2] This coverage type protects your business if you are accused of causing harm to a patron due to a defective product. For example, it might cover the costs of a hospital stay for a customer who got food poisoning after eating at your restaurant.

Business Owners Policy

A business owners policy (BOP) combines general liability insurance with commercial property insurance. They also typically include business interruption insurance, which covers lost revenue and temporary relocation costs if you have to shut down your restaurant due to a covered loss. After a kitchen fire, business interruption insurance could pay your employees’ wages while your business is closed or cover the extra costs associated with operating out of a temporary rental space.

Purchasing these bundled policies as part of a BOP can often result in cost savings — often 10% or more.^[3] Additionally, depending on your insurer, you may be able to add endorsements to your BOP bundle.

Commercial Property Insurance

Commercial property insurance covers the structure of your restaurant, attached fixtures and any property you store inside the restaurant against perils such as fire, theft and vandalism. For example, commercial property insurance could cover the cost of replacing any cooking equipment destroyed by a kitchen fire.

Workers’ Compensation Insurance

Workers’ compensation insurance protects your business in case an employee is injured or becomes sick on the job. This type of policy can pay for an employee’s medical treatments and rehabilitation, as well as cover lost wages, disability payments and death benefits, if necessary.

Not only is this insurance required in most states for businesses with more than a few employees, but it's also essential for covering frequent injuries that occur in restaurants.^[4] For example, a restaurant is likely to see four workers’ compensation claims annually, meaning that without this coverage, your restaurant may be responsible for legal fees if sued by workers or required to cover their medical bills and lost income.^[5]

Employment Practices Liability Insurance

Employee practices liability insurance (EPLI) covers legal expenses related to claims that you treated your workers unfairly or otherwise violated their rights. For example, EPLI could fund your legal defense if a manager at your restaurant was accused of sexual harassment, discrimination or wrongful termination.

Commercial Auto Insurance

You will need to purchase commercial auto insurance to cover any cars your company owns and uses to conduct business activities, especially if you operate a food delivery service. Most states require a minimum amount of commercial auto coverage if you drive for business use, which may make this coverage legally necessary.^[6]

If your employees deliver food using rented vehicles or personal cars, consider purchasing hired and non-owned auto insurance because business use is typically excluded from personal auto insurance policies.^[7]

Additional Insurance Policies Restaurants Should Consider

Depending on the needs of your restaurant, there may be other policies you should consider:

Insurance Type	What It Covers	Claim Example
Liquor Liability Insurance	Covers injuries, damaged property and lawsuits related to an intoxicated guest to whom you served alcohol.^[8]	You are held legally liable for a drunken person’s actions after your restaurant served them alcohol.
Professional Liability Insurance	Covers legal expenses if your business is accused of being negligent or failing to perform its professional duties.	A customer sues you after having an allergic reaction to a dish with walnuts in it because your menu did not list all of the dish’s ingredients.
Food Spoilage Insurance	Reimburses costs of lost food and beverages due to certain sudden risks, such as long power outages, equipment failure and mechanical breakdowns.^[9]	A severe power outage shuts down your walk-in freezer for too long, resulting in spoiled restaurant ingredients that need to be replaced.
Food Contamination Insurance	Covers losses due to a restaurant shutdown after it leads to a food-borne illness.^[9]	A customer becomes sick from improperly stored, spoiled food, and you need the contaminated food replaced and positive publicity to restore your restaurant’s reputation.
Commercial Crime Insurance	Covers financial losses that stem from employee dishonesty or criminal acts like forgery, robbery and burglary.	An employee is caught stealing money from the cash register, and the restaurant needs to be reimbursed.
Cyber Liability Insurance	Covers your business in case you are the victim of cybercrime.	A hacker steals customer credit card information that’s saved in your restaurant’s database, and you need to be reimbursed for legal fees when sued over it.
Pollution Liability Insurance	Covers medical bills, legal expenses and repair or cleanup costs if your company is responsible for damaging the environment.	Your restaurant is found liable for improperly disposing of toxic cooking materials, resulting in environmental damage.
Equipment Breakdown Insurance	Covers the cost to repair or replace equipment after a sudden mechanical or electrical failure. It may also cover spoiled food caused by the equipment breakdown.^[10]	A sudden power surge short-circuits the restaurant’s electric stove, requiring an expensive repair to continue operations.

How Much Does Restaurant Insurance Cost?

The cost of restaurant insurance varies based on several factors, including the number and types of commercial insurance policies your restaurant needs. Some of the factors that could influence how much restaurant insurance costs include:

Location
Restaurant size
Monthly revenue
Maximum and average number of daily customers
Number of employees
Number of restaurant-owned vehicles and their frequency of use
Type of cooking performed at the restaurant
Value of restaurant equipment and tools
Claims history
Coverage limits and deductibles

Restaurant Insurance at a Glance

Below is the essential information you should know about restaurant insurance:

Restaurant insurance includes various commercial insurance policies beneficial or necessary for restaurants, including general liability, workers’ compensation, commercial property and more.
Restaurant insurance will only protect you up to your coverage limits and after you pay your deductible, so ensure you review these selections carefully, or you may end up with excess out-of-pocket expenses when making a claim.
Restaurants with employees may be required by state law to purchase workers’ compensation insurance. Restaurants that use vehicles for transportation or deliveries may also require commercial auto coverage.
Factors like a restaurant’s location, what types of coverage they need, the number of employees they have and the value of a restaurant’s equipment are used to determine your monthly insurance premiums.

How To Get Restaurant Insurance

After determining which restaurant insurance policies you may need, you’ll want to shop around for the most affordable rates. Try getting quotes from three to five different insurance carriers to understand your options. You’ll typically need to provide information about your restaurant to each insurer individually, which can be tedious.

Speed things up by using an insurance marketplace like SmartFinancial. After you complete a brief questionnaire, we’ll connect you with a licensed insurance agent to help your restaurant secure the right commercial coverage it needs. Click here for free commercial insurance quotes today!

Ready To Save? Compare FREE Insurance Quotes for Your Restaurant Business Now!

FAQs

Why do restaurants need insurance?

Restaurants need insurance to avoid high out-of-pocket expenses after an accident or unexpected financial loss. Additionally, some forms of insurance may be required by law.

What impacts my restaurant insurance cost?

Your restaurant’s insurance costs are often determined by factors such as location, number of employees, revenue, claims history and coverage limits.

Does restaurant insurance cover special events?

Restaurant insurance may cover special events, but it typically depends on the type of event and how often it's hosted. Check with your insurer to confirm you’re covered – otherwise, you may need to purchase an additional policy.

How do I show proof of insurance for my restaurant?

You can request a certificate of liability insurance from your insurance carrier in order to show proof that you have purchased coverage.

Does restaurant insurance cover my business’s signage?

Signage that is attached to or inside of a building you own should be covered by your commercial property insurance. However, you may need a signage insurance endorsement if you lease the building your restaurant is in or if the sign is outdoors and detached from the building.

What type of insurance do I need if my restaurant delivers?

You’ll typically need commercial auto insurance to protect you and meet legal requirements if your restaurant delivers. If your employees use their own vehicles for deliveries, you may need hired or non-owned auto insurance instead.

Sources

The Hartford. “Restaurant Insurance.” Accessed May 14, 2026.
The Hartford. “What Is Product Liability Insurance?” Accessed May 14, 2026.
Embroker. “How Much Does Business Insurance Cost? (2025 Data).” Accessed May 14, 2026.
National Federation of Independent Businesses. “Workers’ Compensation Laws – State by State Comparison.” Accessed May 14, 2026.
Pie Insurance. “Restaurants.” Accessed May 14, 2026.
Nationwide. “Commercial Auto Liability Insurance.” Accessed May 14, 2026.
The Hartford. “Hired and Non-Owned Auto Coverage.” Accessed May 14, 2026.
XINSURANCE. “Liquor Liability Insurance for Businesses.” Accessed May 14, 2026.
Allstate. “Food Spoilage and Food Contamination Coverage.” Accessed May 14, 2026.
Nationwide. “What Is Equipment Breakdown Insurance?” Accessed May 14, 2026.

Restaurant Insurance: Coverage, Requirements and Cost Explained

Preston Micalizio

Richard Murphy

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