Louisiana is a seafood staple destination in the United States. In fact, you’d be hard-pressed to find a restaurant that isn’t serving up oysters, fish, and everything else the Gulf of Mexico has to offer.
No matter what type of seafood you’re serving up, or whether you serve up seafood at your Louisiana restaurant at all, you have something in common with every other restaurant: You need insurance. And when you need insurance, you need to know your risks. You're best resource for finding out what you need is an independent insurance agent.
In fact, insurance coverage and costs for your restaurant in Louisiana will differ based on any number of factors. Some of the most common include:
The short of it is that you’ll need insurance. With the help of an independent insurance agent, you can navigate the general and specific coverage you need. This way, you’ll pay the best price for your bottom line while getting your business all of the protection it realistically needs.
With the right background knowledge, you get be more prepared to speak to your independent insurance agent about your insurance needs, too!
Before we get into Louisiana state-specific coverage options, it’s important that you understand the basic background for insuring your restaurant. That being said, there are three types of insurance you’ll need:
Within each category, there are general policies that cover broad issues and more specialized policies that you may want to purchase depending upon your restaurant, risks, and needs. We’ll dive into the most common options to give you a good basis to work off of.
Property coverage will provide you with the replacement value of two types of property if there is a covered loss:
By movable property inside the building, we mean things like furniture, décor, flatware, and anything else you can physically move. This might seem like an odd distinction, but it’s an important one for property coverage. After all, most restaurants have immovable personal property, too. By immovable, we mean things that are bolted down. This is generally applicable to kitchen equipment, but may also include furniture built-ins like booths or bars. You’ll almost always need additional, special coverage for this sort of immovable property. That being said, it’s an important point to bring up with your independent agent.
In addition to immovable property coverage, there are other specialized policies available. These policies include coverage things like:
General commercial liability coverage is just that: It’s general. It covers issues that arise with your customers while they’re at your restaurant. Typically, this happens in one of two ways:
Liability coverage is for things like slip-and-fall accidents, food-related illness, and basically anything else that could happen to a customer while they’re at your location. However, one important point to note is that a general policy doesn't cover liquor-related incidents. Likewise, it won’t cover the costs of a lawsuit brought against your directors and officers should they be sued for making a poor business decision.
That being said, liquor liability coverage is the most common specialized liability add-on policy. You must purchase this policy if you sell, brew, or distill alcohol in any way. Otherwise, if a customer has an alcohol-related accident, you’re on the hook for any property damage and bodily injury they cause. A standard liquor liability policy has a $1 million policy limit. However, a lot of restaurants up this coverage to $5 million, because alcohol-related incidents could potentially destroy a restaurant if they are deadly.
Officers and directors liability coverage is a more common add-on policy for larger restaurants or restaurants with multiple locations. It kicks in when a stockholder, an employee, or a city sues a restaurant for making what they claim is a poor business decision. When the lawsuit is brought, there doesn’t have to be any particular type of damage, either. In fact, a lawsuit can be brought before there’s been any “damage” at all. The benefit is that this pays for litigation costs, which can be pricey, especially when lawsuits are drawn out.
Employee coverage is twofold: one type is legally required and the other is optional.
You are legally required to purchase workers' compensation insurance for your Louisiana restaurant. Workers' compensation is a type of insurance that kicks in when an employee is injured on the job. It pays for a few specific types of expenses:
Employment practices liability insurance is the optional type of employee insurance. It protects your restaurant and the restaurant’s officers from litigation costs if an employee sues for:
Litigation costs can put a serious strain on a restaurant, especially when a lawsuit is dragged out. That being said, it’s important that you seriously consider whether the additional cost is worth the peace of mind. Again, this is the perfect type of consideration to bring up with your independent agent when it comes time to get a policy.
How you structure your restaurant will affect how many employees you have, how much liability your restaurant carries, and the general risk that can increase insurance costs. While this is in no way a comprehensive list of all of the features that may affect your restaurant insurance, it does include the primary components an underwriter will consider when it comes time to write your policy.
Keep in mind that this is not a comprehensive list of factors. But they should get you thinking about how your restaurant is set up and how that may affect insurance costs for your Louisiana restaurant.
There aren’t many state-specific differences in insurance. However, for the differences that do exist, they revolve around factors like:
Oysters are a big issue in Louisiana. During the summer, the water in the Gulf of Mexico can breed bacterial and other health-related issues with oysters. That being said, restaurants should serve them cooked, never raw, during the summer months.
If a restaurant makes a mistake and serves a raw oyster from the Gulf during the summer and a customer gets sick, that’s a liability policy concern.
This sort of concern also extends to seafood generally. Seafood can make people sick if it's stored or prepared improperly. This will all affect liability policy costs.
Deep frying is another concern. Deep fried food means hot oil in the kitchen, and hot oil in the kitchen means risk goes through the roof. This will affect the cost of your workers' compensation insurance because that policy is priced according to the risk classifications for your employees. Add in sharp utensils used to handle things like oysters, and you’re looking at a higher workers' compensation policy.
Again, your Louisiana location may not affect insurance if none of the above applies to you. But if it does, it’s something you should keep in mind when you’re shopping for policies.
You’ll pay two separate costs when it comes to your Louisiana restaurant insurance:
The reason these are separated is because workers' compensation is priced differently than property and liability coverage. In fact, there are two factors that determine the cost of your workers' compensation coverage:
Risk will be greater primarily in the kitchen. Hot oil and sharp knives typically mean you carry more risk and will have higher rates as a result. This is because employees are more likely to injure themselves if they’re surrounded by dangerous substances and utensils.
Property and liability coverage can cost anywhere from $1,000 annually to $100,000 or more annually. This difference is due to a lot of the factors that we’ve mentioned throughout this article, such as:
Of course, coverage might be more expensive if you have specialty property in your restaurant. Remember, property coverage is the replacement value. If you have a painting that is worth a lot of money hanging in your restaurant, you need to get it appraised to get a fair price for its replacement. These are all precautions your independent agent will discuss with you.
To run a successful restaurant in Louisiana, you'll need property, liability, and employee insurance coverage. And the best way to get the protection, and price, you need is with an independent insurance agent.
Trusted Choice independent insurance agents aren't tied down to any one carrier. This means they have the freedom to shop around and bring more coverage options to the table for you. Then they'll help examine your restaurant, talk about your goals, and walk you through all the important details of your policy in plain English , because you should know as much about your coverage as we do. Right?