Get the Buzz about Insurance in the Texas Restaurant Biz
Entrepreneur and author Richie Norton once wrote (in his book The Power of Starting Something Stupid) that
procrastination is "like going to a fancy restaurant and filling up on
bread and not leaving enough for dinner."
Very funny. But if you're actually in the restaurant business -- or
thinking about it -- procrastination, the avoidance of making a decision,
has very serious implications when it comes to the topic of buying
Dining out, whether it's at a fast food burger joint or a Michelin starred
restaurant is growing fast in popularity. But with that growth come new and
In the haste to serve your growing horde of customers, beat your
competitors and earn a good profit, there's an increasing danger that you
might overlook the protection you need to secure the future of your
It's maybe not that you totally forget about insurance -- although that
happens -- but you procrastinate a la Richie Norton about deciding exactly
what type of coverage to buy. Or you don’t make time to review the coverage
you already have to check that it still meets your needs.
And you usually don’t find time to regret that until it's too late. So, why
not take the time right now to put your thinking hat on and get this done?
It's important to know exactly what type of protection you need and where
to find the answers to your questions -- and the best rates. Like eateries
themselves, restaurant insurance comes in many shapes and sizes.
What Type of Insurance Coverage Does a Restaurant Need?
First, that depends on the type of restaurant. From small restaurant
insurance through chains, from fast food franchises to a la carte fine
dining, from pizza parlors to steak bars, from food trucks to outside
Every type of establishment should have restaurant insurance that's
tailored to their specific needs, which is why it's always best to call in
an insurance agent with specialist knowledge and experience of the
restaurant and catering industry.
That said, there are several essential types of coverage all restaurants
should have, plus a number of options that depend on your needs and your
Here's a quick rundown of the main components and options:
- General restaurant liability insurance. This is critically important. It
provides coverage against the costs of lawsuits and court awards or
settlements, in the event that someone -- a customer, supplier or other
visitor -- blames you for damage or bodily injury they suffered in your
- Product liability coverage to provide protection against claims relating
to food items you sell, including take-home consumer products.
- Commercial property insurance to protect your business premises and its
contents against a wide range of perils including fire, theft and
- Liquor liability coverage. This relates to the commission of a crime in
which liquor that you served to the offender is held to have contributed to
- Inventory insurance to protect against spoilage, fire and theft.
- Commercial vehicle insurance and coverage for non-owned vehicles when employees use their own cars for your business.
- Restaurant workers compensation insurance. Although not mandatory in
Texas, many firms, including those in the restaurant industry, opt to
provide workers comp protection to cover medical costs and lost wages for
an employee injured at work.
- Business interruption for extra expenses and loss of income insurance to protect you against
unforeseen events that disrupt your restaurant business activities.
- Identity theft insurance and cyber liability protection. This type of
insurance covers illegal use of information, such as credit card details
and other customer data that you collect and store. It's increasingly
important -- restaurants rank highly among targets for hackers.
- Umbrella insurance to provide "top-up" coverage when the limits of your
main liability policies are breached.
For smaller restaurants and chains, one option worth discussing with your
agent is a Business Owners Policy, or BOP. This type of
protection rolls several types of restaurant insurance coverage into a
single policy, which can save money as well as simplifying the process of
In addition, if you are an individual owner with significant financial
commitments, you should have a good life insurance policy in place.
How Much Coverage Do I Need and What Does it Cost?
This is an area where you ideally need specialist advice, The scope of your
coverage obviously depends on the size of your business, the number of
employees and the level of income.
Furthermore, different insurers charge different rates for the same or
similar levels of coverage.
But, as an example, here in Texas, you could expect to buy a $1m Business
Owners Policy for $2,000 to $2,500 a year. This would likely include a
deductible, where you pay the first $500 to $1,000 of any claim yourself.
For a general restaurant liability policy, again covering you for $1m,
expect to pay in the region of $750 to $1,000 minimum, while liquor liability might
cost around $750 to $1,000 for coverage.
Workers comp coverage starts at about about $500 or more
for $500,000 of protection.
These are all ballpark figures. It's possible you could pay significantly
more dependent on your business circumstances. For example, a BOP
could cost an excess $10,000. The type of construction of the building can play a factor in the cost of a BOP policy.
How Can I Find the Best Texas Restaurant Insurance for My Needs?
It's important to know that, like all states, Texas has its own laws
relating to insurance and the restaurant business. In addition, some local
governments impose their own regulations and codes.
By working with an experienced agent like Pasadena, you can tap directly
into local knowledge and expertise gained over many years, and gather
useful insight into managing risks in your restaurant business.
A good agent will also be able to customize a restaurant insurance program
specifically to your business -- yet be flexible enough to make changes as
and when needed. Without this expertise, you could end up paying for
restaurant coverage you don’t need.
And, of course, you want to work with an independent agent that can secure
the right coverage at the most competitive rates -- ideally one that, like
Pasadena, works with multiple, reputable insurers.
If you're looking for good value, quality restaurant insurance in Texas, or
if you'd like a no-cost review of your existing policy, please get in touch
with us by calling us at: 713-869-6991 or email us at: [email protected]