Restaurant insurance: what you need to open, serve and stay covered
Restaurants change fast. A new wine list, delivery drivers or a patio can each open a gap in a policy written for the business you were last year. Here's what restaurants and bars typically carry, and the gaps we see most.
Insurance restaurants typically carry
What's typical and what's commonly required. Your trade, state, contracts and insurer decide the details.
| Coverage | What it covers | Often required by | Typical limits |
|---|---|---|---|
| General liability | Customer injuries, such as a slip on a wet floor, and damage to other people's property. | Landlords, event venues, many leases | $1M per occurrence / $2M aggregate. |
| Liquor liability | Claims arising from serving alcohol, for example when an intoxicated guest injures someone (dram shop laws). | Most landlords and some state liquor authorities once you sell alcohol | $1M per occurrence is common. |
| Property | Kitchen equipment, furniture, improvements and inventory. Often bundled in a business owner's policy (BOP). | Landlords and lenders | Replacement cost of what you own. |
| Equipment breakdown and spoilage | Repairs when coolers or ovens fail, and the food lost when refrigeration goes down. | Rarely required, commonly carried | Enough to cover a full walk-in of stock. |
| Business income | Lost income and ongoing bills while you're closed after a covered event, such as a fire. | Sometimes lenders | Often 12 months of income. |
| Workers' compensation | Employee injuries, like burns, cuts and falls. | State law in almost every state (Texas is the main exception) | Set by state law. |
| Hired and non-owned auto | Liability when staff drive their own cars for deliveries or errands. | Rarely required, often overlooked | $1M is common. |
| Cyber liability | Costs after a data breach, including card data from your point of sale. | Rarely required, commonly carried | Varies by card volume. |
Lease and license requirements
Landlord as additional insured
Most leases require the landlord to be added to your general liability policy, with minimum limits named in the lease.
Proof of liquor liability
Many landlords ask for it before you serve alcohol, and some state liquor authorities require it as part of licensing.
Waiver of subrogation
Leases often require your insurer to give up claims against the landlord. That needs an endorsement.
Certificates for events and catering
Venues and event organizers usually ask for a certificate naming them before you cater off-site.
Where restaurant coverage breaks
The policy was right when it was bought. These are the changes that most often leave a gap.
You added alcohol, but not liquor liability
Many general liability policies exclude liquor claims for businesses that sell or serve alcohol.
Staff deliver in their own cars
Their personal auto policy may not cover business use, and your policy may not either without hired and non-owned auto coverage.
No spoilage or equipment breakdown
A failed walk-in can cost thousands in stock, and a standard property policy often doesn't cover it.
A patio, second location or catering isn't on the policy
Growth is easy to forget to report, until a claim comes from the part of the business the insurer didn't know about.
Business income runs out too soon
Rebuilding after a fire often takes longer than the coverage period.
A bistro adds a wine list and gets its liquor license, but never adds liquor liability. A guest who was served several glasses crashes on the way home, and the injured driver sues. The bistro's general liability excludes liquor claims, so the defense and any settlement fall on the owner.
Check your coverage for gaps like this →Frequently asked questions
What insurance does a restaurant need?
Most restaurants carry general liability, property (often as a business owner's policy) and workers' comp. Serving alcohol usually adds liquor liability, and many add equipment breakdown, spoilage, business income and cyber. Your lease and liquor license may set specific requirements.
Does general liability cover alcohol-related claims?
Usually not for businesses that sell or serve alcohol. Most general liability policies exclude liquor liability for those businesses, so it's bought separately or added by endorsement.
Are employees who deliver food in their own cars covered?
Often not fully. Personal auto policies can exclude business use, and a restaurant's policy won't cover it without hired and non-owned auto coverage.
What does a restaurant landlord usually require?
Typically general liability at set limits with the landlord named as additional insured, a waiver of subrogation, and proof of liquor liability if you serve alcohol. The lease spells out the exact terms.
What is a business owner's policy (BOP)?
A BOP bundles general liability, property and business income into one policy for smaller businesses. It usually doesn't include workers' comp, liquor liability, auto or cyber.
This page is general information about typical coverage and common requirements. It is not insurance or legal advice, and it is not a recommendation to buy any policy. Requirements vary by state, contract and insurer.