Finding the Best Restaurant Insurance in Delaware for You
(Because the right type of coverage is no "Small Wonder")
Christine Lacagnina |January 28, 2019
You want to open a restaurant in the First State, and you're eager to start bringing smiles to your customers' faces. But while you're perfecting your menu, you'll also need to consider what type of insurance coverage your restaurant needs in order to protect you against the parts of ownership that aren't quite as fun, like potential lawsuits.
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.
What Types of Restaurant Insurance Do I Need in Delaware?
We'll get into specifics for your state in just a minute, but first, let's check out the type of coverage generally needed for restaurant owners no matter their location. A restaurant insurance policy typically includes the following:
General liability: This coverage protects against lawsuits related to injury or property damage done by the business, and it's mandatory. Food poisoning claims would fall under this category.
Workers' compensation: If your employees become ill, get injured or die from a work-related incident, this aspect of the insurance will cover the financial ramifications. Coverage is mandatory in Delaware, as well as most other states.
Property insurance: This covers any damage to the physical building that houses your restaurant, in case of fire, etc. The type of cooking equipment your establishment uses will contribute to the risk of fire damage, and may influence the cost of your policy. Businesses with deep fryers that use grease, for example, are considered a higher risk. Note: Restaurants with a drive-thru will have extra property that needs coverage, and paved surfaces (like driveways) are not typically covered by general property insurance.
Business income: A part of property insurance, this aspect covers the financial loss suffered while a business is closed due to fire damage or other disasters.
Ordinance and law: Another part of property insurance, it covers the financial ramifications if your building is found to not be up to current state code. This coverage also applies in the event that you need to rebuild your restaurant, or if you're building one from the ground up, yourself. Handicap compliant features, fire safety equipment, and emergency exits are all factors, here.
Boiler & machinery: Also known as "equipment insurance," it covers electric equipment in the building (e.g., AC units and boilers) that breaks down due to power surges, etc. Property insurance may cover this stuff, but not always.
Spoilage: This coverage takes care of the replacement costs of food that spoils due to power outages caused by storms, surges, etc.
Communicable disease: Covers any illnesses transmitted to customers due to improper hygiene of your employees.
Optional Add-Ons to Restaurant Insurance in Delaware
The basics included in a restaurant insurance policy may not cover all of your business's unique needs. Your independent insurance agent will know what add-ons to set you up with, but here's a look at a few that you might need (or just really want to have):
Commercial/business auto insurance: If you run a carry-out restaurant that makes deliveries, you'll want to look into getting coverage for your company vehicles from things like theft and vandalism. Your restaurant will also be held responsible for damage done by your driver while in a company vehicle. Food trucks will also need this coverage.
Coverage for signage: This coverage protects your signage from things like weather and vandalism, since it's not typically covered under regular property insurance. It's especially important for restaurants with a drive-thru, with all the extra signage that could be damaged due to distracted or impaired drivers, or vandalism.
Art floater insurance: For bigger/fancier restaurants with artwork on display, this coverage is another great idea. You'll have to get an appraisal for the specific pieces you want to cover, first. In case of fire or even theft, it'd be a shame to have to pay for the replacements out of pocket.
Liquor liability insurance: While not mandatory, this coverage can fill in some important gaps. General liability will NOT protect you if your employees overserve a customer who ends up with a DUI or other alcohol-related charge. Coverage is more necessary for smaller restaurants, as chains tend to have stricter serving rules and training policies in place to prevent mishaps.
Do I Really Need Liquor Liability Insurance in Delaware?
Delaware is one of only eight states that do not have dram shop laws, which means that if a customer is overserved liquor at your restaurant and causes damage after leaving your establishment, your business cannot be held accountable. That being said, anyone could still file a case against you because of a mishap with an intoxicated patron.
The lack of dram shop laws in Virginia could mean that the case is much more likely to be ruled in your favor, however, there are still fees to pay when someone files against you. Court fees and any expenses for a lawyer are your responsibility. Liquor liability coverage is still important to have, to save you from paying out of pocket for any lawsuits.
Does My Delaware Restaurant Need Hurricane Insurance?
Delaware's coastal location makes it prone to hurricanes. These storms can be fierce, and they can seriously damage your restaurant. However, hurricane damage isn't typically covered under property insurance, so you'll want to have a discussion with your independent agent.
Your agent will know if you should add hurricane coverage. Delaware is one of 19 states that require a mandatory hurricane deductible as part of its homeowners insurance policies, so clearly the storms here mean business. Setting yourself up with coverage could save you a lot of grief.
How Much Does Restaurant Insurance Cost in Delaware?
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.
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 agent will know exactly what to hook you up with.
What's the Safest/Cheapest Kind of Restaurant I Can Start?
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.
What's the Most Expensive/Riskiest Kind of Restaurant I Can Start?
On the other end of the spectrum, a large dine-in chain restaurant with tons of employees, features like a salad bar and buffet, and a liquor bar is by far the priciest/riskiest venture. All the required workers' compensation, 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.
What's So Great about an Independent Insurance Agent?
Insurance policies are often filled with lots of technical jargon. Additionally, it's a real process to hunt for the RIGHT policy. Fortunately, sifting through the available options and pinpointing the necessary coverage is a task that can easily be handed off to someone else. That's where independent insurance agents come in to save the day.
Independent insurance agents will help you get the best possible deal, and the type of coverage that you (not anyone else) need. They'll do all the shopping and comparing insurance quotes for you, and they'll even break down the complex jargon so you understand exactly what you're getting.
Finding/Comparing Restaurant Insurance Quotes in Delaware
Our savvy and trusty agents will review your needs and help you evaluate which type of Delaware restaurant insurance makes the most sense for you. They'll also compare policies and quotes from multiple insurance companies to make sure you have the best protection out there. They'll get you covered — in a comprehensive and affordable way.