Opening a restaurant is both an exciting and an overwhelming endeavor. With finances on the line, the journey to owning the restaurant of your dreams can be filled with unexpected twists and turns. The last thing you need is to be faced with additional expenses before opening your restaurant’s doors to your customers.
One of the most critical decisions you will face before opening your restaurant is what type of insurance coverage you need for your business. You may be inclined to put off purchasing insurance coverage until you get a steady cash flow coming in from customers; however, anything can happen at any time, even in the first few months of operation.
While your restaurant may be housed in a modern, well-maintained building and have top-of-the-line fire prevention and protection equipment, having insurance before opening day is vital to the success of your business.
Let’s look at three insurance risk factors every restaurant owner should consider.
Food Safety
Food safety is always a concern for people who own restaurants, as contamination and spoilage can occur at any given time. According to the Centers for Disease Control (CDC), the most frequently reported restaurant injury is food poisoning. Food can become hazardous to health for mechanical failure, power outage, and improper handling. Not only can food poisoning ruin your restaurant’s reputation, but it can also cost you damages if sued by patrons.
Improper Safety Equipment
Restaurants can be dangerous places if not outfitted with proper safety equipment. Kitchen and grease fires account for most property damage and employee injuries found in the restaurant business. Having adequate safety equipment to meet the unique demands of your space and industry is essential to ensuring your property, employees, and customers remain safe. Such equipment includes emergency lights and exit signs and Ansul fire suppression systems.
On-The-Job Injury And Illness
Your restaurant should have a documented safety program in place for employees to be trained in on-the-job safety in your workplace. However, a well-formed safety program doesn’t always prevent illness or injury from occurring in your restaurant. Most states require restaurants to provide worker’s compensation insurance to employees to cover job-related injuries or illnesses. If you fail to maintain such insurance coverage, you may be penalized as well as held liable if an issue occurs with an employee.
Final Thoughts
While you may be tempted to put off purchasing insurance coverage for your new restaurant, consider these and other existing risk factors. Protecting your business and your investment is essential to your long-term success.