Making a reality of your calling to open your own restaurant in Virginia can be rewarding, but it can also be risky. Restaurant owners have to deal with potential threats, like lawsuits or natural disasters, just like anyone else. But don't let that deter you, because luckily restaurant insurance is available to help seriously diminish those fears.
Our independent insurance agents are here to break down all kinds of restaurant insurance in Virginia, from the coverage needed by country ham biscuit servin' diners all the way to large-scale steakhouses. Whatever your culinary vision, they'll help find the right flavor of coverage for you.
What Is Restaurant Insurance?
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 Type of Restaurant Insurance Coverage Do I Need in Virginia?
Before we take a look at some specifics that apply to restaurant owners in The Mother of States, we'll check out the basic coverage requirements across the map. A typical restaurant insurance policy 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 Virginia, 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) aren't 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 codes. 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. Handicapped-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 Virginia Restaurant Insurance
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:
- Commercial/business auto insurance: If you run a carry-out restaurant that makes deliveries, this coverage can provide protection 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: This option exists mainly for bigger/fancier restaurants with artwork on display. Scheduling an appraisal for the specific pieces you want to cover is the first required step. In case of fire or even theft, this coverage can help prevent having to pay for the replacements out of pocket.
- Liquor liability insurance: While not mandatory, this coverage can fill in some important gaps. General liability won't protect you if your employees overserve a customer who ends up with a DUI or other alcohol-related charge. This coverage is more necessary for smaller restaurants, since chains tend to have stricter serving rules and training policies in place to prevent mishaps.
Do I Really Need Liquor Liability Insurance in Virginia?
Virginia is one of only eight states that don't 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 can't 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 a case would be 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.
Hurricanes May Require Extra Coverage in Virginia
Old Dominion's known for its historical charm and its proximity to DC. But it's also known to receive visits from hurricanes, thanks to its coastal location. These storms can be fierce, and they could seriously damage your restaurant. However, hurricane damage isn't typically covered under property insurance, so you'll want to have a discussion with your agent.
Your agent will know if you should add hurricane coverage. Virginia is one of 19 states that require a mandatory hurricane deductible as part of homeowners insurance policies, so clearly the storms here mean business. Setting your restaurant up with coverage could save you a lot of grief.
Floods May Also Affect Your Coverage Needs in Virginia
Of course, another side effect of hurricanes is often severe flooding, but hurricanes aren’t Virginia’s only soggy threat. Harsh winters are known to dump thick blankets of snow, which will later melt (and possibly cause even more trouble). So it's important to also look into flood insurance, to help keep your restaurant from getting into deep water.
If your restaurant is located in an area deemed to be high-risk (or even if it isn't, in certain cases), you may be required to have flood insurance. But no matter what, it's a good idea to get it, since flood insurance will cover your property (the structure of your restaurant and the merchandise inside) if natural water (i.e., rain, waves, snowmelt, etc.) wreaks havoc.
Once again, if you're unsure if you have it/need it, talk with your agent. They'll help make sure you're covered, because no one wants to get stuck paying out of pocket for flood damage. Trust us.
How Much Does Restaurant Insurance Cost in Virginia?
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.
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 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.
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 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.
Finding/Comparing Restaurant Insurance Quotes in Virginia
Our wise and helpful agents will help you determine which type of restaurant insurance makes the most sense for you in Virginia. 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.
TrustedChoice.com Article | Reviewed by Paul Martin
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