When you think of Maine, you might think of baked beans, corn chowder, lobster rolls, and any other kind of seafood, for that matter.
Your restaurant could serve any one of these delicious favorites or anything else, and you all still have one thing in common: You need restaurant insurance. And when you need restaurant insurance, you need an independent insurance agent to guide the way.
Restaurant insurance will look different for every business, but the factors that affect costs and play into underwriter concerns about risks are all the same:
This isn’t an all-inclusive list. But it does hit on the major variables that an underwriter will have to evaluate when they're looking at your restaurant. The more you know about each, the easier it’ll be to put together your policy, because you can work better with your independent insurance agent to account for anything and everything you might want covered.
The first kind of insurance you need for your restaurant is property insurance. It’s important to note that there's general property insurance, and then a lot of specialized options to extend coverage.
Your basic property policy will cover the replacement value of:
Movable property is just what it sounds like: It’s property that you can shuffle around, like your furniture. As you can guess, this also means that there’s another type of property in the building: immovable personal property. This is generally your kitchen equipment, or even built-in furniture. It’s literally what would be personal property but has been bolted to or attached to the building in some way. Typically, this isn’t covered under your general property policy, so you’ll want to ask your independent agent what special coverage you might need.
In addition to immovable personal property, which is generally a specialty policy, there are other specialty policies, too. A few of the most common for restaurants in Maine include:
There are three types of commercial liability insurance:
General commercial liability insurance pays for something that happens to a customer while they’re at your restaurant. This would cover an accident – like if they slipped and fell on a wet floor – or a food-related illness.
Liquor liability coverage is absolutely required if you serve, sell, brew, or distill alcohol. Without it, any alcohol-related incidents won’t be covered under your general commercial liability coverage.
In fact, if you overserve a customer, there’s an accident, and you didn’t purchase specialized insurance to cover it, you’ll have to pay out of pocket for any:
As a note, most liquor liability policies start at a $1 million policy limit. However, most restaurants increase this to up to $5 million or more, since alcohol-related accidents can be incredibly costly.
Officer and director liability insurance is a much more specialized, less utilized special type of liability coverage. It arises when employees, stockholders, or cities bring a lawsuit – without damage or injury – against a restaurant for a “poor business decision.” Litigation costs can be high, and without this coverage, your restaurant could suffer. However, this is much more likely to happen to a bigger restaurant, or a multi-location corporate chain.
There are two types of employee insurance:
You’ve probably heard of workers compensation. It’s the insurance that kicks in when an employee is injured on the job and covers their expenses for:
Another type of employee insurance for Maine restaurants is employment practices liability insurance. This kind of insurance is better suited for larger restaurants, though it can be a good idea for smaller places as well! This coverage kicks in if an employee sues your restaurant alleging:
The best part is that it defends the restaurant entity as well as officers of the restaurant. This can again save your restaurant from burdensome litigation costs, which can and have shut down some businesses in the past. That being said, it’s important to discuss this with your independent agent so you know whether it is a make or break component of your policy.
Just as no two restaurants serve the same food, no two are set up the same way, either. Different features may or may not affect insurance costs and coverage options you should consider. Some of the most popular that you may want to discuss with your independent agent include:
If you have any of these features – or any others that you think may affect your policy – be sure to make a note of it with your agent.
State-specific insurance coverage for restaurants doesn’t vary much. However, it can differ due to things like:
The big concern with Maine is seafood. If you’re serving it raw, is the fish you’re serving fresh enough? If you’re deep frying it, how much danger are the employees in around the hot oil? All of these are concerns that can and will affect your liability coverage. This is because past-its-prime seafood can make customers sick. On the kitchen front with deep frying, your workers' compensation might increase because hot oil is dangerous. So are the sharp knives required to cook seafood!
Spoilage would be another concern, too. If you’re getting fresh fish, you won’t rely on frozen food as much. However, you’ll still need a refrigerator to keep your food and if that fails, you’ll lose a lot of money on fresh seafood.
Beans are another odd food-related concern. Some beans have stones in them, and they can crack teeth. This isn’t a hard and fast rule, but it could factor in to general liability coverage, too.
It’s impossible to tell you what you’re going to pay for restaurant insurance in Maine before you start working with an independent agent to assess all of your unique features and risks. However, your costs will be broken down as follows:
The reason you pay for workers' compensation separately is because it's calculated differently. In fact, the two factors that affect what you pay for workers' compensation coverage are:
Risk classifications typically hinge on how dangerous your kitchen environment is. If there are sharp knives, hot oil, and other dangerous cooking techniques (think open fire), then the risk classification will be higher and you’ll pay more for insurance.
Property and liability coverage are priced differently. Their combined cost on the low end could be $1,000 annually, whereas the higher end coverage can be $100,000 or more per year. The difference has a lot to do with restaurant size, risk, and location.
A corner food stand may have only five employees, no excessively dangerous kitchen equipment, and no “building” to cover for property insurance. On the other extreme is a restaurant with multiple locations, lots of pricey personal property, and higher risk in the kitchen (not to mention the potential for customer-related accidents on the premises). A food cart isn't likely to serve alcohol, but a restaurant will. All of these factors come together to affect the cost of insurance.
One additional note about valuing your insurance policy is valuing personal property in your restaurant. Consider this: You may have paintings in your restaurant, and each is worth a few thousand dollars. Without an appraisal, you’ll get the replacement value of those paintings. With an appraisal, you’ll get what they’re actually worth if they’re destroyed.
Independent insurance agents know what Maine restaurants need when it comes to insurance coverage. And while every restaurant will start with the basic property, liability, and employee policies, an independent agent will add on the specialty coverage you need to ensure that every potential risk is addressed and covered.
The best part is that independent insurance agents can work with multiple insurers to get a range of options, so you never have to settle. You'll get the best coverage at the best price - guaranteed.