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5 Common Restaurant Insurance Claims

Thursday, 18 February 2021

Imagine this: it’s snowy and cold outside and your restaurant is so busy that it becomes difficult to keep your restaurant free of slippery hazards. Sure, you can put up a ‘wet floor’ warning sign and hope for the best, but what if someone slips and injures themselves and takes you to court? Accidents happen all the time in restaurants which can lead to significant financial loss from repair costs to legal costs, putting your business in jeopardy. By reading this blog, you will be more aware of some risks in the restaurant business which can help you develop a comprehensive risk management strategy, including a critical component: restaurant insurance.

Restaurant Insurance Beyond the Slip-and-Fall

The slip-and-fall injury isn’t the only type of risk you face daily at your restaurant. And the liability coverage that covers such a lawsuit is not the only type of restaurant insurance coverage available. The more you know about the potential hazards, the better you can prevent the issues, and protect yourself with restaurant insurance for things outside your control.

Restaurant Insurance Claim 1: Slip-and-Fall

In 2018, a study conducted by the Canadian Institute for Health Information reported an average of 1,800 of emergency visits due to slip-and-fall injuries – PER DAY! You can do your best to prevent these accidents from happening, however, the tiniest negligence or error could cause a restaurant guest to trip on an out-of-place rug or slip on a spilled drink leading to hospitalization and long-term implications. Commercial General Liability (CGL) is one of the basic coverages you should have for your restaurant insurance, which will help you if a lawsuit ensues from slips and falls. Commercial General Liability would help cover legal costs in defense of alleged third party bodily injury caused by your business, as well help to cover payouts determined by the result of a lawsuit.

Restaurant Insurance Claim 2: Property Damage 

Can you operate your business without your business property? It may sound like a silly question, but what you would do if your property was flooded, damaged by a fire, or had the roof cave in due to heavy snow accumulation? If your building or business equipment were damaged, it could potentially cost you thousands of dollars to repair or replace and even result in potential downtime of your business (which we will discuss in Claim #4). This is where Commercial Property Insurance would be an important part of your restaurant insurance policy. This type of insurance provides coverage for costs associated with damage to physical assets of your business caused by an insured peril. Because each restaurant is different, your restaurant insurance policy would be uniquely tailored to your business needs. If you are unsure about which types of claims your commercial property insurance covers, ask your broker about what perils are included on your policy.

Restaurant Insurance Claim 3: Food Poisoning

The potential scenarios here are endless, but perhaps your food supplier had fresh produce that was linked with outbreaks of E. coli and several customers became ill from food poisoning. Or maybe you have adapted your menu to accommodate food sensitivities such as dairy, nut or gluten intolerance. While you do all you can to follow Food Handling Safety Protocols and prevent cross-contamination of allergens, if a restaurant customer has a severe reaction or illness, you could be caught in a lawsuit. Product Liability Insurance can cover legal and medical costs if you are taken to court because your product (food) made a patron sick.

Restaurant Insurance Claim 4: Equipment Breakdown and Business Interruption 

Technology helps advance our society every day, that is, until it stops working! As you rely on technology more and more for your businesses, Equipment Breakdown Coverage is a crucial part of restaurant insurance. Perhaps a major appliance sustains electric damage and you are unable to serve food until it’s repaired. Equipment Breakdown Coverage covers the cost to repair or replace equipment that has broker down due to electrical or mechanical issues.

If the breakdown results in your business having to close temporarily, Business Interruption Insurance could potentially cover lost income and overhead costs during the closure.

Restaurant Insurance Claim 5: Liquor Liability 

If you intend to serve alcohol at your establishment, Liquor Liability Insurance is an absolute must! Even though your staff know and follow the rules of Ontario Smart Serve, if an accident occurs with an intoxicated customer either at your restaurant or on their way home and they cause bodily injury or property damage due to intoxication, your restaurant could be at great risk. Liquor Liability Insurance can be added to your restaurant insurance to protect against alleged bodily injury or property damage due to an intoxicated person, protecting your employees that could be held liable for overserving.

Finding the Right Restaurant Insurance Coverage for You

Working in the food service industry is stressful and adding the thought of potential claims might make you worry even more. Thankfully, finding restaurant insurance coverage doesn’t have to be stressful, and it can help alleviate the worry and give you peace of mind while you operate your business. As mentioned before, you should still do your due diligence to develop a proper risk management strategy, just be sure to include restaurant insurance as protection for the things you cannot prevent or control.


Are you ready to get a quote? Our BIG commercial brokers are here and ready to help you find the best restaurant insurance coverage. Our team recognizes that your restaurant is unique and requires a trusted broker who will pay careful attention to all the details and give you the best advice and recommendations based on the risks you face every day. Learn more about the information you need for a small business quote here and contact us now to get started!