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General Liability Insurance for Restaurants

If you’re a restaurant owner, you’re familiar with the following scenario—a drink spills, a server is walking too fast, two people collide…boom! Slips and falls are bound to happen in a restaurant so being prepared is smart versus the assumption that they don’t happen at all. A month later, you’re presented with court papers. The customer that fell injured themselves pretty badly, sought medical advice and saw an opportunity to file a lawsuit—are you prepared? As a rule of the thumb in the insurance industry is, if you think it could happen, it can happen.

Commercial General Liability Insurance for Restaurants

The insurance coverage that responds to the inevitable lawsuit naming your restaurant is called commercial general liability insurance. It’s coverages on a very high level, are bodily injury and property damage. Now as restaurant your insurance policy will much less likely need coverage for property damage then the first part of coverage the bodily injury. Insurance is also subject to exclusions so make sure you have those reviewed by your broker.

When a slip and fall happens in your restaurant, the lawsuit, legal expenses, the back and forth between adjusters and lawyers does not happen right away. In fact it can take up to two years for a claim to be filed and it is very important that your general liability insurance policy stays in place after your restaurant is closed. The insurance term for this two year window is called the statute of limitations. Once again another insurance term that does not always describe well what it sounds like.

What Is General Liability Insurance?

General liability insurance (CGL) can also referred to as commercial insurance or liability insurance. It’s a commercial business coverage policy that the most basic insurance that a business should own.

General liability insurance is the basic type of protection a business must own. It covers any costs associated with lawsuits brought to your company along with the payout of any losses. More specifically, general liability insurance may protect your business from the following:

  • Third-party lawsuits include the following:
    • Bodily Injury (e.g. an employee is walking through your restaurant. They slide and fall on a drink spillage that hasn’t been cleaned yet).
    • Property Damage (e.g. a customer is visiting your deli. They’re leaving on a sign, which falls over and breaks. It also falls into a glass window).

What Do We Define as a Restaurant?

A restaurant is a public place that provides food and beverages on a commercial basis. The biggest indicator that an entity is a restaurant is that unlike a deli or a bakery, a restaurant offers a service as well. A serve will likely seat you and/or take your order once you’ve made your decision on what you’d like to consume.

Why Does a Restaurant Require General Liability Insurance?

“Someone Slipped In My Restaurant—What Do I Do Next?”

So a customer slips on a wet spot on the floor and falls hard. You had the wet floor sign out on the restaurant floor, your support staff was getting the mop and the customer still slips. The following are the next steps that you will need to take:

  • Document as much as possible for your insurance claim—get the customers name and contact information right away.
  • When did it happen? What time of the day? 
  • Where did it happen in your restaurant?
  • If the “wet floor caution sign” was out, where was it located? Was it visible? It may be a good idea to take a photo of the area showing the sign right away.
  • A list of your risk management procedures to mitigate the insurable loss
  • Was any first aid administered at the time of the incident?

All of this is paramount, because the guests of your restaurant might not realize they were seriously hurt or experiencing chronic pain for several months. What typically happens is after some time, they assume that their pain or discomfort is linked to the incident do they go ahead and sue you.

As a restaurant owner, you know how important having the right general liability insurance is essential. Get your FREE quote online

At Zensurance, we make getting a commercial business  insurance quote easy. Our hassle-free, easy to use and no-jargon tool walks you through the entire process. 

What is Covered Under General Liability Insurance for Restaurants?

General liability insurance for restaurants is an essential basic protection a business must own. It covers any costs associated with lawsuits brought to your company along with the payout of any losses. More specifically, general liability insurance may protect your business from the following:

  • Third-party lawsuits
    • Bodily Injury (e.g. an employee is walking through your restaurant. They slide and fall on a drink spillage that hasn’t been cleaned yet).
    • Property Damage (e.g. a customer is visiting your deli. They’re leaving on a sign, which falls over and breaks. It also falls into a glass window).

What is Not Covered Under General Liability Insurance for Restaurants?

Accidents aren't limited to the indoors. If you have a patio, you'll want to consider general liability insurance for your restaurant.
Accidents aren’t limited to the indoors. If you have a patio, you’ll want to consider general liability insurance for your restaurant.

There are several types of commercial business insurance policies that could be coupled with professional liability insurance for life insurance agents. The following are common commercial business insurance policies that a life agent should consider:

  • Cyber Insurance
    If your customer information is compromised and their personal information is used against them (e.g. fraud activity where their I.D. is used), your customer can sue you for the cost of the damages associated. The added protection is a smart move, especially since the number of cyber attacks continue to grow, costing businesses lucrative amounts of money.
  • Business Interruption Insurance 
    If you rent an office for your business and a flood destroys your work space, business interruption insurance may cover the costs associated with loss of income due to operations put to a halt.
  • Property Insurance
    Any property that you own which is used for your business which is damaged or stolen may be covered. (e.g. You have a company laptop that was stolen when someone broke into your vehicle).
  • Legal Expense Insurance
    This type of insurance policy may cover legal costs allotted to defend your legal rights. This is especially targeted toward some claims relating to employment disputes, legal defence, contract disputes & debt recovery, statutory license protection, property protection, bodily injury and tax protection. (e.g. a former employee files a lawsuit against your company for wrongful dismissal. This policy will cover the cost of legal expenses).

Another insurance coverage you should look for is employers liability for the restaurant. This covers your restaurant business from your staff getting hurt and not being able to work. We all know a restaurant is dangerous work environment and your staff work with their bodies, but what happens if they choose to sue you for not making those workplace safety changes? Employers liability which can be included in your restaurants Commercial General Liability policy can cover those lawsuits as well.

Have more questions? Want to learn more about general liability insurance for restaurants? Get your FREE quote online

At Zensurance, we make getting a commercial business  insurance quote easy. Our hassle-free, easy to use and no-jargon tool walks you through the entire process. 

How Much Does General Liability Insurance for Restaurants Cost?

The cost of general liability insurance will depend on the nature of your business and the risks associated with it.

Here are some questions you may want to ask yourself when considering general liability insurance for your restaurant business:

  • Do you serve alcoholic beverages at your restaurant? 
  • Are you deep frying food? Do you have the appropriate exhausts above the fryer?
  • Do you deliver or cater food?
  • How many restaurant guests are on your premises? 
  • How large a space do you occupy, and do you have have either a ground-level patio or a roof-top patio?

All of these factors contribute to your restaurants’ exposure to risk—and the greater the exposure the higher your liability insurance policy should be. Another consideration that is often overlooked in a commercial general liability policy is the insurance aggregate. This refers to how much insurance limit is available per year. So if you have a lawsuit for $3 million and only a $3 million aggregate, you do not have any more insurance for the rest of the year!

It is also important to note that many general liability insurance policies for restaurants have a minimum of $3 million in coverage.

What Kind of Information Do I Need To Get a Quote For General Liability Insurance for My Restaurant(s)?

Some wise advice? To save yourself some time, it’s is a good idea to do some digging and gather some pertinent business information about you or the your company before requesting a quote.

Another great idea is to put together a list of questions beforehand so that you don’t forget what to ask once you get to speak to a broker about your options for general liability insurance coverage. Think about the possible risks that you or your company can face when operating your business.

Here’s a list of several types of information about your business that you’ll need to gather in preparation for your search:

  • Name of your company
  • Your company structure—(i.e. sole proprietorship, corporation, partnership, joint venture or franchise?)
  • Address and square footage of each location
  • Revenue, including split by food, alcohol and all else
  • Number of years of experience the owners have in the restaurant business
  • Number of employees working for your company

Having this information will make requesting a quote easy and fast—whether it’s online, over the phone or in person, and will likely prompt more questions to ask! If you’ve got this information ready, you can get your free quote online now.

What You’ve Learned About General Liability Insurance for Restaurants

  • General liability insurance responds to the inevitable lawsuits against your restaurant, covering on a very high level both bodily injury and property damage.
  • There are several types of commercial business insurance policies that could be coupled with general liability insurance for restaurants (Cyber InsuranceBusiness Interruption Insurance, Property Insurance and Legal Expense Insurance.
  • The minimum amount of general liability insurane coverage for a restaurant is $3 million.
  • Another consideration that is often overlooked in a commercial general liability policy is the insurance aggregate. This is in reference to how much insurance limit is available to your per year. (e.g  If you have a lawsuit for $3 million and only a $3 million aggregate, you do not have any more insurance for the rest of the year).
  • It’s a good idea to put together a list of questions beforehand so that you don’t forget what to ask once you get to speak to a broker about your options for general liability insurance coverage. Think about the possible risks that you or your company can face when operating your business.
  • If an incident occurs where someone is injured (whether it be an employee or a customer), it’s a good idea to get as much information as possible. We have put together a short checklist to get you started. You may also want to put this checklist together and make sure all staff is trained or aware of where to refer to this list when you onboard them with your restaurant.

 

A List of Resources for Restaurants in Canada

Whether you’re an established restaurant or new to the game, you’ll benefit from this comprehensive list of resources. If you’d like to make a suggestion to this list, get in touch by emailing content@zensurance.com.

National Guides

Regulatory

Training

Research and Insights 

News & Media 

Ready to get your FREE quote online?

At Zensurance, we make getting a commercial business insurance quote easy. Our hassle-free, easy to use and no-jargon tool walks you through the entire process.