Does Your Business Need Restaurant Insurance?


Running a restaurant comes with its challenges.

Even the most successful restaurants in New Jersey fall victim to unexpected costs and risks. Whether it’s a case of spoiled inventory or a workplace injury, such problems cause a lot of financial strain.

Fortunately, you can secure your business with New Jersey restaurant insurance. As you’re scaling your business, it’s important to have the right coverage in place to protect any investment.

Essentially, you can get restaurant insurance for maintaining a commercial property, protecting your business against liabilities, and covering the cost of business interruptions.

Here’s everything you need to know.

What Is Restaurant Insurance?

According to a report by Ohio State University, 60% of restaurants fail to operate for more than a year, and almost 80% run out of business under five. Whether running a local diner, a neighborhood cafe, or a fine dining restaurant, getting restaurant insurance saves money and resources from going to waste.

Restaurant insurance typically protects a business against risks. It is a collection of small business insurance coverage plans that address specific industry challenges.

This business insurance policy specifically caters to restaurant and hotel owners, offering them a range of benefits. Before opting for one, you should know all the basics about sourcing the right insurance policy for your restaurant business.

Consideration of the following aspects is crucial before applying for restaurant insurance in New Jersey:

  • Type of building and age of your establishment
  • Square footage of the restaurant space
  • The performance quality of security systems
  • Number of employees working in the building
  • Projected sales and number of customers
  • Types of equipment in the restaurant

General Liability Insurance

General liability insurance is an important policy that protects a restaurant against food and contamination risks. For instance, a customer can sue a restaurant for serving spoiled food and beverages after claiming to be sick.

General liability also covers instances where a customer gets injured at and near your restaurant. The coverage plan gives businesses the right funds to cover legal fees and settle a court case.


In addition to protecting against property damage or theft, restaurant insurance can also provide liability coverage in case someone is injured on the premises or an employee is injured while performing work-related duties.

Worker’s Compensation Insurance

Workers’ compensation insurance is undeniably one of the most important policies to consider when running a restaurant. This coverage plan helps F&B service businesses deal with lawsuits that revolve around workplace injuries.

Note that workers’ compensation insurance is mandatory in most states. When an employee suffers from an accident, the restaurant can compensate for any loss. In this case, the policy will cover medical bills, physiotherapy, disability, and death benefits.

For instance, this applies when an employee gets severely injured while cooking or operating kitchen equipment in the restaurant. Any on-the-job injury that impacts a worker’s earnings will require compensation, and an insurance plan can help cover just that.

Commercial Property Insurance

Commercial property insurance protects a restaurant building from harm and helps cover the cost of repairing damaged kitchen equipment. This includes insurance for the following incidents and occurrences:

  • Commercial crime: All restaurants receive financial coverage in the event of a burglary, forgery, and other fraudulent activities. An example is when an employee misuses business information and gets caught for malicious intent.
  • Business interruptions: A restaurant receives funds for replacing lost wages in the event of a major hazard. It helps cover workforce and relocation costs in such cases. For instance, this coverage is useful when a fire breaks out and stops the restaurant from operating.
  • Overheads: Sometimes, restaurants have temporary expenses like paying rent for an employee’s living quarters. This depends on the type of establishment you’re running. On average, nightclubs that operate late hours need this coverage.
  • Food contamination: Every restaurant must adhere to health and safety codes as per state regulations. In an outbreak, a restaurant can easily get sued for releasing a food-borne illness. With insurance, you can cover all medical costs.
  • Food and liquor quality: All restaurants need insurance that covers the cost of food waste and other services when there’s a power outage overnight or equipment failure. If the cause of the problem is external, you can claim the costs of spoiled goods.
  • Mechanical breakdown: Any restaurant that uses fast and intricate machinery requires insurance that secures your business against workplace injuries. For instance, the insurance will compensate for damage done to a boiler system.
  • Auto insurance: Some restaurants use motor vehicles to deliver food to customers. Others might operate a local car for transporting inventory. You can get coverage for auto injuries as well as damage done to your work car in the event of a car accident or robbery.
  • Cyber liability: Many restaurants operate on cloud infrastructure. But when one falls victim to a cyber-attack, it can lose its digital visibility and even suffer a data breach. This liability insurance pays for legal fees, investigatory services, lost income, and more.
  • Employment practices: Most restaurants opt for employment practices liability insurance, as it protects your business against unlawful activity. It helps address employment claims regarding harassment, undue payments, discrimination, and wrongful termination.

Is Restaurant Insurance Important?

If your restaurant is your main source of livelihood, getting restaurant insurance will protect you against unforeseen expenses. After all, you don’t want your restaurant business to be plagued with lawsuits.

With proper restaurant insurance, you can cover the cost of any disaster or outbreak that takes place on the premises of your restaurant. It also provides the funding to keep your business afloat and your employees satisfied.


With this type of commercial insurance, you can protect your restaurant business against liability claims, food contamination, equipment damage, and workplace injury.

Working with an experienced restaurant insurance agency will enable you to run your business with peace of mind, knowing you are protected from risks typical in the food and beverage industry.

Amanda is the proud owner and head cook of her very own restaurant. She loves nothing more than experimenting with new recipes in the kitchen, and her food is always a big hit with customers. Amanda takes great pride in her work, and she always puts her heart into everything she does. She's a hard-working woman who has made it on her own, and she's an inspiration to all who know her.