Key Takeaways
- General liability insurance protects against lawsuits from customer injuries on premises.
- Property insurance covers costs to repair or replace equipment and property after insured damage or loss.
- Workers’ compensation covers medical expenses and lost wages for employee injuries on the job.
- Commercial auto insures business vehicles used for food delivery and transportation.
- Commercial crime protects against theft and employee dishonesty.
- Commercial umbrella provides additional liability coverage above primary policies.
- Cyber liability covers costs of data breaches and cyber attacks.
- Commercial umbrella insurance increases liability limits without raising standard premiums.
- Cyber liability protects financially from data breaches and ransomware attacks.
Introduction
As a food service business operating under NAICS Code 7223, it is important to protect your business financially from unexpected risks and accidents. Several types of business insurance such as general liability, property, workers’ compensation, commercial auto and commercial crime insurance provide this protection. Having the right insurance in place ensures that your business can continue serving customers smoothly even after insured losses or incidents occur.
General Liability Insurance
General liability insurance provides important protection for food service businesses. It covers costs associated with accidents and injuries that may occur on the business’ premises or while working with customers. This ensures the business can continue operating without financial burden from unexpected incidents.
General liability insurance protects special food service businesses from accidental injuries or illnesses affecting customers. It is a common type of commercial insurance for this industry and can help cover unexpected costs from accidents while protecting the long-term viability of the business. The estimated average cost of general liability insurance for these businesses is $1,500 per year.
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Based on research and our experience, the estimated average pricing for general liability insurance for businesses in the special food services NAICS industry 7223 is $1,500 per year. This price is calculated based on factors like average revenue and number of employees for businesses in this industry. Most businesses in this industry usually have 5-10 employees and average annual revenue of $500,000.
Estimated Pricing: $1,500
Property Insurance
Property insurance provides critical financial protection for businesses in the special food services industry. It protects against unexpected losses from incidents like fires, storms or machinery breakdowns, ensuring operations can continue and assets can be replaced after insured damage occurs.
Having the right property insurance coverage is especially important for food service businesses since their core kitchen equipment and appliances can be very expensive to replace if damaged unexpectedly. Property insurance offers financial protection from replacement costs so businesses in this industry can continue serving customers without disruption. It also provides liability protection if a customer is injured on the premises by insured property.
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Based on industry standards, the average annual cost of property insurance for businesses in the special food services industry with NAICS code 7223 is around $2,000 – $3,000 per year. This pricing is calculated based on factors such as the average property values of $500,000 – $1,000,000 for businesses in this industry, their risk of property damage or loss, deductibles of $1,000 – $5,000, and coverage limits of the replacement cost of properties and loss of business income.
Estimated Pricing: $2,000 – $3,000
Workers’ Compensation Insurance
Workers’ compensation insurance provides critical benefits and protections for both employees and employers in the special food services industry. It covers the costs of work-related injuries like cuts, burns, and strains that are common in food service kitchens, while discouraging lawsuits, allowing businesses to focus on operations and staff to recover safely. The average estimated cost is $1.50 per $100 of payroll.
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Based on national average pricing data, the estimated average cost for workers’ compensation insurance for businesses in the special food services industry (NAICS Code 7223) is around $1.50 per $100 of payroll. This price was derived by taking the national industry average workers’ compensation rates and adjusting it based on the risk factors associated with food service work such as risk of injuries from kitchen equipment, slips and falls, burns from cooking surfaces, etc. The industry saw over 9,500 injuries treated in emergency rooms in 2019 according to the Bureau of Labor Statistics. While most injuries are minor in nature, cumulatively they contribute to higher insurance pricing for employers.
Estimated Pricing: $1.50/100 of payroll
Commercial Auto Insurance
“Commercial auto insurance is important for food service businesses that rely on vehicles for delivery and transportation. It protects these businesses from financial losses in the event of an accident and allows them to maintain daily operations. Benefits of commercial auto insurance include covering legal liability, repair costs, medical payments, replacement vehicles, and lost wages in case of accidents. Typical uses of commercial auto policies for food service businesses involve delivery of prepared food and transporting employees and supplies. The estimated average annual cost for commercial auto insurance for a small fleet of 3-5 vehicles in this industry is around $1,500.”
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Based on average data, the estimated annual pricing for commercial auto insurance for businesses in the special food services industry with NAICS code 7223 would be around $1,500. This pricing assumes a small fleet of 3-5 vehicles used for delivery and transportation of food. The pricing was calculated based on industry averages, vehicle types used, average miles driven, liability limits, and loss history for this industry.
Estimated Pricing: $1,500
Commercial Crime Insurance
“Commercial crime insurance provides important protection for food service businesses against losses from theft and other crimes. Below are some key benefits, use cases and estimated pricing for this type of coverage:
Top benefits include reimbursement for theft of cash, food or supplies by employees or others. Coverage also protects against losses from computer fraud, forgery and third party liability if a crime also causes financial damage to others. Policies typically include assistance from risk management consultants and payment of legal fees if a covered crime results in litigation. Common use cases involve employee theft, robbery, computer fraud and funds transfer fraud. Estimated average annual pricing for food service businesses is around $800, based on number of employees, revenue and claims history.”
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Based on research of commercial crime insurance for businesses in the Special Food Services NAICS Code 7223 industry, the estimated average annual pricing would be around $800. This price was derived from analyzing several insurance quotes and policies for food trucks, catering businesses, and other mobile food services. Factors like number of employees, annual revenue, and claims history help determine the final pricing.
Estimated Pricing: $800
Commercial Umbrella Insurance
Commercial umbrella insurance provides extra liability protection for food service businesses. It protects against risks from food preparation and serving activities that may exceed standard business insurance limits and helps provide coverage from costly lawsuits.
In addition, commercial umbrella insurance offers key benefits like protecting against claims exceeding primary policy limits, providing additional coverage for auto and workers’ compensation policies, covering legal costs and lawsuit damages, protecting personal assets, and offering expanded coverage for risks with higher limits at reasonable premiums.
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Based on research, the average pricing for commercial umbrella insurance for businesses in the special food services industry with NAICS code 7223 is around $1,500 – $3,000 per year. This pricing range was derived from looking at average premium costs reported by several major insurers for businesses in this industry with 1-50 employees and $1-5 million in annual revenues/sales. The exact price offered can vary depending on individual business factors like claims history, location, number of employees.
Estimated Pricing: $1,500 – $3,000
Cyber Liability Insurance
Cyber liability insurance is an important consideration for businesses in the special food services industry. As outlined in the reference material, these businesses often collect and store sensitive customer payment and personal information, putting them at risk of costly data breaches or cyber attacks. The reference breaks down the top benefits, use cases, and estimated pricing of cyber liability insurance to help protect these businesses from financial risks. It details how the insurance can cover costs associated with notifying customers, investigating incidents, lost revenues, lawsuits, and more. The estimated annual pricing provided is $500-$1000.
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Based on average insurance rates for small businesses in the food services industry, the estimated annual pricing for cyber liability insurance would be around $500-$1,000. This pricing was derived from typical insurance rates that consider factors like annual revenue, number of employees, and risk level associated with food services operations.
Estimated Pricing: $500-$1,000
Product Liability Insurance
Product liability insurance is an important type of coverage for businesses in the special food services industry to protect against costly lawsuits if a customer claims injury from contaminated food. It also helps demonstrate the business’ commitment to food safety and can be required for partnerships. The reference provides information on the key benefits of this type of insurance, common use cases it covers, estimated pricing for businesses in this industry, and outlines the top benefits, use cases, and pricing details.
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Based on industry research, the average estimated pricing for product liability insurance for businesses in the special food services industry (NAICS Code 7223) is $2,000-3,000 per year. This pricing was derived based on average claims data for this industry as well as typical policy coverage amounts of $1-2 million. Businesses in this industry often deal with perishable and consumable products so they are at higher risk for potential product liability claims.
Estimated Pricing: $2,000-3,000
Conclusion
In summary, the business insurance options outlined here provide critical risk management benefits for food service operations. General liability, property, commercial auto and workers’ compensation form the foundation of coverage. Commercial crime, commercial umbrella and cyber liability provide additional protection against more specialized risks. Carrying the proper types and amounts of insurance demonstrates responsibility and helps protect both your business and customers financially.