Turning the vision of running your own restaurant into a reality can bring a lot of rewards, but it can also bring plenty of potential risks. In addition to serving food to the willing public, your business has to look after its employees and stand up against the elements of Mother Nature. Luckily, that's where restaurant insurance comes in to save the day.
Our independent insurance agents are here to break down all kinds of restaurant insurance in Michigan, from the coverage needed by Coney hotdog stands all the way to large pizza chains. Whatever your culinary vision, they'll help find the right flavor of coverage for you.
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 take a look at some specifics that apply to restaurant owners in the Water Winter Wonderland, we'll check out the basic coverage requirements across the map. A typical restaurant insurance policy includes the following:
While the basic restaurant insurance package is a great start, truth be told, it might not meet all of your unique needs. Your independent insurance agent will hook you up with the additional coverage that's right for you, but until then, we'll look over 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 Michigan, as well as many other states, a guest who injures 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 if a minor is served, since minors are not legally allowed to drink in any state.
However, third-party liability coverage is crucial. If 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 Michigan's unique laws. They'll also explain the costs associated with each level of coverage.
The Wolverine State faces tornadoes as their most destructive natural disasters. Michigan averages 15 of these conical storms per year. These storms can be intense, and have the potential to really wreak havoc on your restaurant. Having coverage for your restaurant could potentially save you a lot of grief.
Though property insurance coverage usually covers tornado damage, it's still important to make totally sure your policy will. Ask your agent to review your policy with you, to up your confidence level to bulletproof status. It's worth it to just be totally covered from the start, so you're not out of luck should disaster strike. Trust us.
The Great Lakes provide tons of opportunities for recreation, but they also provide a real flooding risk for the state. When that water overflows, it just might run directly into your restaurant. Worse yet, the standard restaurant insurance policy most likely will not cover flood damage. Getting flood insurance can be a proactive measure to protect your restaurant.
If your restaurant is in an area deemed to be high-risk, you may be required to purchase extra coverage — though other areas may not escape this need, either. Flood insurance will cover your property (structure of your restaurant's building and what's inside it) if natural water (i.e., rain, waves, snowmelt, etc.) plays rough.
That being said, it's possible that external property, such as your business vehicles, won't be covered under this insurance. Be sure to call your agent and have a lengthy discussion about your coverage status. Being prepared ahead of time can save you from having to clean up the mess afterwards.
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 at 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 restaurant chain with tons of employees and features like salad bars, buffets, and liquor bars 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.
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 not only help you get the best possible deal, but also the type of coverage that's right for you. They shop and compare insurance quotes for you, and even break down all that complex jargon into plain old English, so you understand exactly what you're getting.
Our wise and helpful agents will help you determine which type of insurance for your Michigan restaurant makes the most sense. 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 other words, they'll make it happen.
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