Key Takeaways
- Most restaurants start with general liability, commercial property, workers' compensation, and business income coverage, often packaged together.
- If you serve alcohol, a separate liquor liability policy is usually needed because general liability commonly excludes it for businesses that sell alcohol.
- Delivery, catering, and online ordering create auto, cyber, and off-premises exposures that a basic package may not address.
- Landlords, lenders, and delivery platforms may set their own insurance requirements, so review your lease and contracts at each renewal.
A restaurant typically needs general liability, commercial property, business income, workers' compensation, and, if it serves alcohol, liquor liability insurance. Depending on operations, owners should also consider commercial or hired auto, cyber, employment practices, equipment breakdown, and umbrella coverage, says the team at Bozzuto Group, a San Diego–based specialty commercial insurance brokerage.
Restaurants combine nearly every type of commercial risk in a small footprint: open flames, hot oil, slippery floors, perishable inventory, alcohol, cash, card data, and a large hourly workforce. The checklist below walks through each policy, what it does, and when it applies. Use it to review your current program or prepare for an opening.
What are the core policies every restaurant needs?
1. General liability
General liability covers bodily injury and property damage claims from customers and other third parties, such as a guest who slips on a wet floor or a delivery vendor injured on your premises. It also includes products-completed operations coverage, which can respond to foodborne illness claims, subject to policy wording.
2. Commercial property
Commercial property insurance protects the building if you own it, and your kitchen equipment, furniture, inventory, and tenant improvements if you lease. Confirm that your limits reflect current replacement costs, including hood and fire suppression systems.
3. Business income and extra expense
Business income coverage replaces lost net income and pays continuing expenses, such as rent and payroll, when a covered loss forces you to close. Extra expense pays reasonable costs to reopen faster. Pay attention to the waiting period and whether civil authority or utility interruption coverage is included.
4. Workers' compensation
Workers' compensation pays medical costs and lost wages for employees injured on the job, such as burns, cuts, and strains. Most states require it once you have employees; California requires it even with one employee. Our workers' compensation guide explains how classification and payroll affect premium.
Do restaurants need liquor liability insurance?
If you sell or serve alcohol, the answer is almost always yes. Liquor liability insurance covers claims that your business contributed to a guest's intoxication and the injury or damage that followed. General liability policies commonly exclude this exposure for businesses engaged in selling or serving alcohol.
Dram shop laws, which define when an alcohol seller can be held responsible, vary by state. Assault and battery exclusions also vary widely; for bars and late-night venues, confirm whether altercations involving staff or guests are covered. Training programs for servers can support both safety and underwriting.
Which additional coverages should you consider?
| Policy | What it covers | Who should consider it |
|---|---|---|
| Equipment breakdown | Sudden failure of refrigeration, ovens, HVAC, and electrical systems | Nearly all restaurants |
| Spoilage | Perishable food lost to temperature changes | Any operation with significant cold inventory |
| Hired and non-owned auto | Liability when employees drive personal cars for business | Restaurants with in-house delivery or catering runs |
| Commercial auto | Owned vans and trucks | Caterers and food trucks |
| Employment practices liability | Harassment, discrimination, and wrongful termination claims | Any restaurant with employees |
| Cyber liability | Payment card breaches, ransomware, and data restoration | Restaurants taking cards or online orders |
| Crime | Employee theft and money loss | Cash-heavy operations |
| Umbrella | Additional limits over GL, auto, liquor (if scheduled), and employer's liability | Most restaurants, often required by leases |
For restaurants with card terminals and online ordering, cyber liability insurance can cover breach response costs and related card brand assessments, depending on the policy. Confirm whether your umbrella sits over liquor liability; some do not.
Is a business owners policy enough for a restaurant?
A business owners policy (BOP) packages general liability, property, and business income for small businesses. Smaller cafes and quick-service restaurants may qualify, and a BOP can be cost-effective. Full-service restaurants with significant alcohol sales, late hours, or high revenues often fall outside BOP eligibility and need a package or monoline policies instead.
Either way, a BOP does not include workers' compensation, commercial auto, liquor liability, or EPLI. Those are bought separately.
What contract and lease requirements should you check?
Restaurant leases frequently require specific liability limits, additional insured status for the landlord, a waiver of subrogation, and proof of hood cleaning or fire suppression maintenance. Third-party delivery platforms, catering clients, and event venues may also request certificates with particular wording. Review those documents at every renewal so a policy change does not put you out of compliance.
How can restaurants keep premiums in check?
Underwriters price restaurants largely on cooking exposure, alcohol sales, and claims history. Practices that tend to support better terms include:
- Regular hood, duct, and fire suppression service with documented dates
- Non-slip mats, spill procedures, and floor inspection logs
- Responsible alcohol service training for bartenders and servers
- Prompt reporting of employee injuries and a return-to-work program
How Bozzuto Group Helps
We work with hospitality and restaurant owners to build programs around how each location actually operates: alcohol percentage of sales, delivery model, hours, and cooking methods. We check that your liquor, umbrella, and assault and battery terms fit together, confirm lease requirements are met, and coordinate spoilage and equipment breakdown sublimits with your actual inventory. We also share loss control practices, such as kitchen fire safety and floor maintenance routines, that underwriters review.
Opening a new location or reviewing your renewal? Call Bozzuto Group at 858-805-1865 or request a quote to compare your options.
Frequently Asked Questions
What insurance is required to open a restaurant?
Legal requirements vary by state, but workers' compensation is generally required once you have employees, and commercial auto is required for owned vehicles. Beyond the law, landlords typically require general liability and property coverage, lenders require property insurance, and many liquor licensing authorities or leases expect liquor liability. Review your lease, loan, and license conditions with a broker.
Does general liability cover food poisoning claims?
General liability often responds to bodily injury claims from customers who become ill after eating your food, typically through the products-completed operations portion of the policy. Coverage depends on the carrier and policy wording. It does not cover your own lost income or recall costs from a contamination event; those require separate contamination or recall coverage.
How much liquor liability insurance does a restaurant need?
The right limit depends on alcohol sales volume, hours, venue type, state dram shop laws, and lease or license requirements. Many leases specify a minimum. Restaurants with late-night service, live entertainment, or a high share of alcohol sales generally need higher limits, and should confirm whether their umbrella policy extends over the liquor liability policy.
Can a small restaurant use a business owners policy?
Smaller cafes, bakeries, and quick-service restaurants with limited alcohol sales may qualify for a business owners policy, which bundles liability, property, and business income. Eligibility depends on the carrier's rules for revenue, square footage, cooking methods, and alcohol percentage. A BOP excludes workers' compensation, auto, and liquor liability, which are purchased separately.
Does restaurant insurance cover delivery drivers?
It depends on who owns the vehicle and who employs the driver. Owned delivery vehicles need commercial auto insurance. Employees using personal cars may be addressed with hired and non-owned auto coverage, which protects the restaurant from liability. Third-party platforms carry their own policies for their drivers. Confirm your delivery model with your broker.