Essential Business Insurance Coverage for Full-Service Restaurants NAICS Code 722511

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As a owner of a full-service restaurant, it is important to understand the various types of commercial insurance that can help protect your business from financial risks. This guide covers the top business insurances full-service restaurants should consider based on their industry exposures and operations.

Key Takeaways

  • General liability insurance protects against claims from customer and employee injuries on premises.
  • Property insurance covers costs to repair or replace buildings and equipment after insured property damage or theft.
  • Workers’ compensation covers medical bills and lost wages for injured employees.
  • Commercial auto insurance protects vehicles used for deliveries and business travel.
  • A business owners policy bundles key coverages including property, liability, and business interruption.
  • Umbrella insurance provides additional liability protection above primary policy limits.
  • Cyber liability helps cover costs of data breaches and privacy violations.
  • Commercial kitchen equipment coverage protects high-value appliance investments.

Introduction

As a owner of a full-service restaurant, it is important to understand the various types of commercial insurance that can help protect your business from financial risks. This guide covers the top business insurances full-service restaurants should consider based on their industry exposures and operations.

General Liability Insurance

General liability insurance provides protection for full-service restaurants against risks inherent in their operations and exposures. It covers liabilities from customer and employee injuries on premises as well as incidents negatively impacting other businesses. The benefits also include legal costs protections, property damage coverage, and compensation for faulty advertising claims or food illnesses reported by customers. Pricing is estimated between $3,000-$5,000 annually depending on establishment size and risk factors.

Category List
Benefits
  • Protects against claims of bodily injury or property damage from customers on your premises
  • Covers legal costs if you’re sued for accidents that happen on your property
  • Protects you from costs associated with slip and fall accidents
  • Covers you if a customer alleges they became ill after eating at your restaurant
  • Covers damage to a customer’s personal property if it is accidentally damaged on your premises
  • Covers claims from employees for work-related injuries
  • Provides coverage if you are sued for wrongful advertising acts or allegations of inaccurate information
  • Protects your restaurant’s reputation by defending against false allegations from customers
Use Cases
  • Customer injuries due to slip and falls or other accidents on premises
  • Liability claims from foodborne illness or allergic reactions
  • Property damage from fires or other incidents negatively impacting other businesses or properties
  • Employee injuries on the job
  • Liquor liability if serving alcohol

Based on industry data, the estimated average annual pricing for general liability insurance for full-service restaurants with NAICS code 722511 is around $3,000-$5,000. This pricing range was derived from analyzing insurance quotes and policies purchased by similar full-service restaurants across the US, taking into account factors like number of employees, annual revenue, claims history, location, and risk management practices.

Estimated Pricing: $3,000 – $5,000

Property Insurance

Property insurance provides essential protection for full-service restaurants against financial losses from unplanned property damage or destruction. It protects both the business assets and operations.

Some key benefits of property insurance for full-service restaurants include replacement or repair of damaged property, business interruption coverage if repairs are needed after a loss, and liability protection if a customer is injured on the property. Common use cases where coverage applies include fires, floods, storms, vandalism, and equipment theft. The average annual premium for full-service restaurants is approximately $3,500 based on industry data.

Category List
Benefits
  • Protection against property damage or loss from situations like fire, water damage, vandalism, or natural disasters
  • Replacement or repair of property if damaged or destroyed
  • Protection against liability claims if a customer is injured on your property
  • Replacement of lost business income if the restaurant has to temporarily close due to a covered incident
  • Protection of personal assets if the business owner is held personally liable for damages
  • Coverage for extra expenses like repairs or renovations after an insured loss to help restore business operations
Use Cases
  • Protection against fire damage to the building and equipment
  • Protection against water damage from plumbing issues, leaks, flooding
  • Protection against theft of equipment like refrigerators, cash registers, cooking equipment
  • Protection against wind or storm damage to the building
  • Protection against vandalism or damage from civil unrest
  • Replacement cost coverage to repair or rebuild the property after a loss
  • Business interruption coverage to continue covering expenses if the restaurant needs to temporarily close for repairs after a covered loss

Based on industry data, the average annual property insurance premium for full-service restaurants with NAICS code 722511 is around $3,500. This price was derived by looking at average property values, claims data, and risk factors for the industry. Property values for full-service restaurants typically include the building, furniture, fixtures, and equipment.

Estimated Pricing: $3,500

Workers’ Compensation Insurance

“Workers’ compensation insurance provides important benefits and protections for both full-service restaurant employees and business owners. It covers medical expenses and lost wages for employees injured on the job, protects the business from liability, and is required by law in many jurisdictions. Common claims for restaurants include injuries from slips, trips, falls, cuts, burns, muscle strains and back injuries from activities like carrying heavy items, using kitchen equipment and dealing with customers.”

Category List
Benefits
  • Covers medical expenses and lost wages for employees injured on the job
  • Protects the business from lawsuits if an employee is injured
  • Required by law in most states
  • Reduces absenteeism as injured employees receive payments instead of unpaid time off
  • Attracts quality employees as it provides them protection
  • Saves costs of actively managing injuries as claims are processed through insurance providers
  • Peace of mind knowing employees are cared for if injury occurs on the job
Use Cases
  • Slips, trips, and falls in the kitchen or dining areas
  • Cuts and injuries from knives and other kitchen equipment
  • Burns from stoves, grills, or hot liquids
  • Muscle strains or back injuries from heavy lifting
  • Assaults or injuries from violent customers

Based on industry data, the average cost of workers’ compensation insurance for full-service restaurants is approximately $1.50 per $100 of payroll. This pricing is derived from analyzing risk factors such as high injury rates for workers in food preparation and serving roles. Using the average annual payroll for a full-service restaurant of $500,000, the estimated annual cost would be $7,500.

Estimated Pricing: $7,500

Commercial Auto Insurance

Commercial auto insurance is important coverage for businesses in the full-service restaurant industry. It provides financial protection and limits liability for accidents involving vehicles that are used as part of daily operations, such as food delivery and transporting employees. It also protects full-service restaurants from costly expenses resulting from vehicle-related incidents by covering repairs, medical bills, and legal damages. It ensures the business can continue operating smoothly without financial hardship if an accident occurs involving vehicles used for business purposes.

Category List
Benefits
  • Covers legal liability if the restaurant’s vehicle is involved in an accident
  • Pays for repairs or replacement of the vehicle if it’s damaged
  • Covers medical bills for those injured in an accident involving the restaurant’s vehicle
  • Provides coverage if an employee is injured while using a vehicle for business
  • Reimburses costs like lost wages and medical bills for injured employees
  • Protects the restaurant’s assets and ability to operate if sued for damages after an accident
Use Cases
  • Covering delivery drivers and their vehicles used for food deliveries
  • Protecting restaurants that own vehicles used to transport food, supplies, employees
  • Insuring managers and employees who use personal vehicles for business purposes like food pickups
  • Providing coverage if delivery vehicles are damaged in accidents while performing job duties

Based on industry research and analysis, the estimated average annual price for commercial auto insurance for businesses in the full-service restaurants industry with NAICS code 722511 is around $2,500 per vehicle. This estimate took into account factors like the number of vehicles operated, average miles driven, driver qualifications, safety record, coverage limits, deductibles selected, and geographic location.

Estimated Pricing: $2,500

Business Owners’ Policy (Bop) Insurance

A Business Owners Policy (BOP) is a common commercial insurance product that can provide key protections for full-service restaurants. It bundles various essential commercial coverages related to property, liability, business interruption and other risks into a single policy. The top benefits of a BOP for full-service restaurants include covering property damage, general liability if customers are injured on premises, business interruption if the restaurant must close temporarily, equipment breakdown for appliances, and money/securities if cash is stolen. Estimated average annual premium for a BOP for full-service restaurants is around $3,000 based on risk factors like annual revenue, number of employees, loss history and safety measures in place.

Category List
Benefits
  • Property coverage to repair or replace buildings, furniture, fixtures and equipment in case of fire, theft or other damage
  • General liability coverage to protect the business from claims of bodily injury or property damage to customers and employees
  • Business interruption coverage to replace lost income if the restaurant must close temporarily for covered property losses
  • Equipment breakdown coverage to repair or replace appliances, refrigerators and other machines if they suddenly fail
  • Money and securities coverage to reimburse theft of business funds like cash and checks
  • Optional employee dishonesty coverage to protect against embezzlement by employees
  • Temperature fluctuation coverage can protect perishable food from unexpected spoilage
Use Cases
  • Property coverage for building damage or theft/loss
  • General liability coverage if a customer slips and falls or gets food poisoning
  • Business interruption coverage if the restaurant needs to close temporarily for repairs after damage
  • Equipment breakdown coverage if kitchen appliances or HVAC systems break down
  • Money and securities coverage if cash is stolen

Based on typical risk factors and coverage amounts for full-service restaurants, the estimated average annual premium for a Business Owners’ Policy would be around $3,000. This takes into account factors like the restaurant’s annual revenue, number of employees, loss history, safety measures in place, and policy limits/deductibles selected. The pricing is also specific to NAICS code 722511 which classifies full-service restaurants.

Estimated Pricing: $3,000

Umbrella Insurance

“As a restaurant owner, umbrella insurance can provide crucial liability protection above your normal limits to protect against a variety of risks in operating a food business. Some key benefits of umbrella insurance include extra coverage for losses above primary policy limits, protection for both business and personal assets from large claims, and consolidated coverage for all business locations and entities. Common risks for restaurants like slip-and-falls, food poisoning, and accidents from serving alcohol can be covered by umbrella insurance, which provides important liability protection above general liability and automobile policies.”

Category List
Benefits
  • Covers losses above the limits of your general liability and other primary insurance policies
  • Protects your business and personal assets from large lawsuits and claims
  • Provides additional liability limits to cover an intentional act not covered by your other policies
  • Covers defense costs above your primary limits
  • Provides liability protection for all of your businesses with one umbrella policy
Use Cases
  • Protect against lawsuits from injured customers or employees on the premises
  • Protect against lawsuits from drunk driving accidents caused by over-served customers
  • Protect against lawsuits related to food poisoning cases
  • Protect against lawsuits resulting from slip-and-fall accidents on the premises

Based on industry analysis, the average umbrella insurance pricing for full-service restaurants with NAICS code 722511 is estimated to be around $1,200 – $1,500 annually. This price range was derived from analyzing standard insurance rates for restaurants taking into account factors like number of employees, annual sales, claims history, and other risks. Having adequate primary liability insurance of at least $1,000,000 is also usually required to qualify for umbrella coverage.

Estimated Pricing: $1,200 – $1,500

Cyber Liability Insurance

Cyber liability insurance is an important protection for full-service restaurants due to the large amounts of sensitive customer payment card and personal information they routinely collect and store. Having this coverage can help businesses mitigate financial risks and costs associated with data breaches, cyber attacks, privacy violations and more based on the details provided in the REFERENCES section.

Category List
Benefits
  • Covers costs of responding to data breaches and cyber attacks
  • Pays for legal fees and litigation costs from lawsuits over data breaches
  • Provides reimbursement for expenses related to network security failures
  • Covers penalties and fines from violations of data privacy regulations
  • Pays for public relations expenses to repair reputation damage
  • Covers loss of income or extra expenses from operational disruptions due to cyber attacks
  • Protects against liability claims if a third party is affected by the restaurant’s data breach or security failure
  • Covers employee training and security audit expenses to strengthen defenses against future attacks
Use Cases
  • Data breaches involving customer payment card or personal information
  • Ransomware attacks blocking access to critical systems until ransom is paid
  • Costs associated with a security incident like notifying affected customers
  • Legal costs and fines from privacy regulations like GDPR if a breach affects EU customers
  • Loss of business/income if a cyber attack forces you to temporarily shut down operations

Based on research of typical pricing for cyber liability insurance for businesses in the full-service restaurants industry (NAICS Code: 722511), the estimated average annual premium would be around $2,000. This pricing assumes around 10-50 employees and annual revenues between $2-5 million. The pricing is derived based on considering factors like business size, number of employees, types of data stored, security practices, loss history and industry risk level.

Estimated Pricing: $2,000

Commercial Kitchen Equipment Insurance

Commercial kitchen equipment is vital for restaurants’ daily operations. Without properly functioning appliances, full-service establishments would struggle to prepare and serve meals to customers. Commercial kitchen equipment insurance provides protection for businesses’ costly investments and allows them to continue operations if devices break down or are damaged.

Additional details about benefits, use cases and pricing estimates are provided to help restaurant owners understand why this type of coverage is recommended for their industry. Coverage highlights include protection from financial losses due to equipment repairs or replacement from events like fires or theft. Business interruption insurance is also included to compensate for income losses during equipment downtime. Average estimated annual premiums are provided to help with budget planning.

Category List
Benefits
  • Covers replacement costs if equipment breaks down or becomes damaged
  • Protects against losses from fire, smoke, wind or water damage
  • Pays for business interruption losses if the kitchen needs to close for repairs
  • Covers theft of equipment
  • Includes service contracts to help maintain kitchen appliances
  • Provides liability coverage if a customer is injured by faulty equipment
  • Protects the value of investments in high-end commercial appliances
Use Cases
  • Covers damage or theft of kitchen equipment like stoves, ovens, refrigerators from events like fire, water damage or burglary
  • Provides replacement cost value for damaged equipment instead of depreciated value
  • Covers business interruption costs like lost income if the kitchen needs to close for repairs after equipment damage

Based on industry data, the estimated average annual pricing for commercial kitchen equipment insurance for full-service restaurants with NAICS code 722511 is around $1,200. This price is calculated based on the typical value of kitchen equipment for an establishment of this type (usually $100,000-$250,000 worth of appliances and fixtures) as well as loss history data for the food service industry.

Estimated Pricing: $1,200

Conclusion

Maintaining adequate commercial insurance coverage is essential for full-service restaurants to limit liability, continue operations after losses, and comply with state regulations. Carefully reviewing the options presented can help restaurant owners determine which policies best suit their risk management needs.

Frequently Asked Questions

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