Whether your taste buds salivate most over guacamole-stuffed burgers, San Francisco clam chowder, steak, or pizza, the thought of opening up your own restaurant has you California-dreamin'. Owning a restaurant isn't all about conquering the perfect diverse menu, though. You've got to get the proper coverage to protect you from the less-glam side, like potential lawsuits and more.
And that's why we're here, to serve up an overview of restaurant insurance in the great state of California. We'll start off with the basics of restaurant insurance and what's included in a typical package, then dig into the specifics of California's state requirements, for the main course. And when you're ready, our independent insurance agents can help you zero in on the right insurance for you. Dig in, everybody.
In short, restaurant insurance is a policy designed to cover all the components involved in your restaurant, from your property and supplies to your employees and customers. Obviously, serving food to the public ties directly into concerns about protecting their health, but restaurant operation comes with many different risks that are important to consider before setting up shop.
Before we check out the specific requirements for The Golden State, it's a good idea to understand what coverage ALL restaurant owners need. A typical restaurant insurance package looks something like this:
While the basics included in a standard restaurant insurance policy are a great start, sadly, that package might not meet ALL of your unique needs. Your agent will hook you up with all the additional coverage you need, but here's a quick look at some of the most common add-ons:
Dram shop laws hold a business liable for serving alcohol to minors, as well as for harm caused by an individual who has been overserved by that business — even after they leave your establishment. A state's specific laws and set of associated penalties/fines for violating them can influence your liquor liability coverage needs, and the cost of your coverage.
In California, as well as most other states, a guest who sustains injuries to themselves due to overintoxication may not sue the establishment, since it's considered the guest's personal responsibility to monitor how much they consume. So, liability coverage for first-party cases is mainly only required in the case that a minor is served, since minors are not legally allowed to drink in any state.
However, third-party liability coverage is crucial. In the case that another individual is harmed by an intoxicated guest, such as in a bar fight or auto accident, they may sue your establishment. For these cases, the third party will need proof that the intoxicated guest continued to be intentionally served past the point of visible intoxication by your restaurant.
Lawsuits can seriously cost you or your business, in the form of significant financial penalties, loss of employment or liquor license, or even jail sentences. Your agent will set you up with the proper liquor liability coverage based on the Golden State's unique laws. They'll also explain the costs associated with each level of coverage.
Sadly, California has to deal with its fair share of wildfires, and the problem seems to be getting worse. In fact, 2018 was the year of California's most-destructive and deadliest wildfire in the state's history. California actually lost more acres to wildfires in 2018 alone than over the entire past decade.
So it's super important that your restaurant insurance includes coverage for wildfires. Ask your agent to double-check your policy to make sure that it specifically lists wildfire protection. You'll want to achieve bullet-proof certainty that you've got coverage in place from the start, so that things in your restaurant NEVER end up too hot to handle.
Though wildfires are among the most destructive natural disasters California faces each year, earthquakes are actually their most common natural foe. In fact, as of February 2018, the state had seen 147 earthquakes in the past week and 7,024 over the past year. Obviously, you'll need to make sure your restaurant is covered.
Though your restaurant insurance policy will most likely cover disasters sparked by earthquakes (such as a pipe bursting in the aftermath), it most likely WON'T cover damage to your restaurant's foundation or merchandise. Restaurant owners in an earthquake-prone zone have even more incentive to consider adding earthquake protection to their policy.
Talk with your agent about your risk to determine if you should add more coverage. Being prepared can help save you from paying out of pocket for Mother Nature's mess. It's best to just be covered from the start, period.
It depends on what kind of restaurant you run and a few other factors, such as if you've got employees, offer a delivery service, operate a drive-thru or serve liquor. However, a typical range for coverage starts on the low end of about $10,000/year for a smaller establishment with fewer employees, and hits the high end of more than $100,000/year for a much larger restaurant, like a chain.
A restaurant insurance policy is typically the cheapest and easiest way to go. This package offers most of the liability and property coverage you'll need, and you can always add on specifics as necessary. Your independent insurance agent will know exactly what to hook you up with.
Obviously, smaller is going to be cheaper. A food truck or corner stand downtown will be by far the cheapest option, since there won't be as many sales as in a larger chain, there aren't any other employees (that would require workers' comp), and you won't be serving alcohol. Coverage costs would most likely be in the low thousands each year.
On the other end of the spectrum, a large dine-in chain restaurant with lots of employees, features like a salad bar and buffet, and a liquor bar is by far the priciest/riskiest venture. All the required workers' comp, property and liability insurance drive up costs exponentially.
It ultimately depends on lots of specifics like the number of employees and the value of the property, of course, but we're talking BIG numbers, like more than $100,000 per year.
Hunting through insurance policies can be a lengthy process. That's why independent agents exist — to make the process MUCH simpler (and faster). Then you can relax and put your effort into your restaurant, while they do the grunt work.
Independent insurance agents will not only help you get the best possible deal, but also the type of coverage that's right for you, and you alone. They shop and compare insurance quotes for you, and even break down all that fancy and unnecessary jargon into the language YOU speak, so you know exactly what you're getting.
Our heroic agents will help you determine which types of coverage make sense for YOU. They'll also compare policies and quotes from several different insurance companies to make sure they're setting you up with protection that's among the best around. In a nutshell, they'll get the job done — and done well.
The Sacramento Bee
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