The first American diners were horse-drawn lunch cars that served sandwiches, coffee, and pies to customers late at night — much like the modern-day food truck.
Diners have evolved over time to become permanent establishments with tables, lunch counters, booths, and everything a full-service restaurant would offer. Diners are often considered to be a home-away-from-home for their “regulars” who come in for their favorite grilled cheese sandwich or the best pie in town.
Many diners are family owned and operated, offering patrons a place to eat, socialize, and share a meal with their neighbors. They are important to their communities, and in many cases have been a family’s livelihood for decades.
If you own and operate a diner, you face unique risks that can’t be left to chance. You need a carefully planned, tailored business insurance program. A local independent insurance agent can help you find the affordable, comprehensive coverage you need to protect your diner from unexpected events.
Why Do You Need Diner Insurance?
Diners can experience a wide variety of incidents and unexpected events that lead to a financial loss. Many of the problems you encounter can be covered with business insurance, allowing you to stay in business even after a devastating loss.
The very nature of operating a restaurant relies upon the constant stream of customers, suppliers, and other visitors eating and spending time on your premises. Trip and fall incidents are common, and you’re likely going to be asked to pay for medical bills if someone gets injured in your diner.
And there’s so much more that could go wrong. Here are some things that can go wrong that should be addressed with diner insurance:
- Guests in your diner damage furniture, bathrooms, vinyl booths, bakery display cases, or other inventory or equipment
- Food, beverage, or ingredients are contaminated or spoiled and must be disposed of or destroyed
- Breakdown of ovens, refrigerators, coffee makers, toasters, ovens, or other kitchen equipment
- Foodborne illnesses caused by food prepared in your diner
- Fire, extreme weather, or a natural disaster
- Theft or other crimes by employees or other visitors
- Utility interruptions that force you to close
Diners need a customized package of property, liability, crime, and other business insurance policies that protect them from financial losses. It’s a good idea to work with an agent in your community and an insurance company that specializes in restaurant insurance.
What Does Property Insurance Cover for Your Diner?
Your commercial property insurance offers protection for your building (if you own it), as well as everything inside of it. If you sustain a property loss after a fire, a tornado, lightning, theft, vandalism, or some other covered event, this policy helps you pay to rebuild, make repairs, and replace destroyed or damaged furniture, kitchen equipment, inventory, dinnerware and cutlery, fixtures, office equipment, menus, computer systems, and even outdoor tables, umbrellas, and lighting.
So if a fire destroys your kitchen, it could cost tens of thousands of dollars to pay for the damages. Your commercial property insurance would help finance your recovery.
If you operate a “vintage” diner or out of an older, historic structure, be sure to talk to your independent insurance agent about insuring your building for its full replacement value.
Why Do You Need Business Interruption and Equipment Breakdown Coverage?
When you have a property loss, it’s likely that you might also have to close down for a while in order to make repairs, rebuild, and restock lost inventory and supplies. In these cases, your business interruption insurance helps replace lost income during the shutdown period. That way you can continue to pay some of your ongoing expenses like rent, employee salaries, utility bills, and more.
Even when you don’t have a major property loss, the breakdown of a single important piece of equipment could force you to close or significantly limit your operations until it’s repaired. Equipment breakdowns can lead to a serious loss of revenue, and can even cause downstream losses if you lose food inventory due to spoilage or some other type of contamination.
Obviously you need your ovens, commercial ranges, dishwashers, freezers, and refrigerators to be in good working conditions at all times if you want to continue to serve quality, fresh food. But if something essential breaks down due to a power surge, a user error, or some other covered event, you’ll likely need some help replacing the lost income and paying for repairs.
Talk to your independent insurance agent about your need for equipment breakdown coverage (sometimes called boiler and machinery coverage). It protects against costs associated with the sudden and accidental breakdown of machinery and equipment. It pays to repair or replace the equipment as well as any business interruption costs that accompany it.
Contamination and Spoilage Coverage for Diners
Your business relies on the constant availability of fresh ingredients that are highly perishable. A power outage or refrigeration breakdown could lead to a serious financial loss.
Contamination and spoilage coverage is part of your commercial property protection. It pays for certain losses if perishable foods or ingredients are spoiled or contaminated due to refrigeration breakdown, utility interruption, or some other type of foreign substance contamination on your premises.
If your local board of health or other agency forced you to close because of food contamination, your contamination and spoilage insurance may cover you for lost income during the shutdown period, as well as costs related to cleaning contaminated equipment and disposing of and replacing spoiled food.
Contamination and spoilage insurance does not protect you in cases where you accidentally serve tainted or “bad” food and a customer becomes ill, whether the contamination occurred on your premises or was because of food purchased from a supplier. This kind of incident is covered under your general liability policy.
What Does Liability Insurance Cover for Diners?
Liability insurance protects your business when you are considered to be negligent or blamed for causing harm to an individual or another business. This can be in the form of property damage, an injury, an illness, or some kind of reputational harm.
It is your financial lifeline if you are sued for some reason.
Commercial general liability (CGL) insurance provides broad protection for third-party bodily injury and property damage claims. It can help you cover the medical bills of injured individuals, repair or replace damaged property, pay for your legal defense if you are sued, and even cover penalties and judgments if you are responsible for a third party’s damages.
If, for example, a server spills hot coffee onto a customer, causing burns to her hand and ruining her clothes, you could expect to pay for the guest’s related medical bills as well as cleaning or replacing her soiled clothing. If the guest decides to sue you for additional damages due to the trauma caused by the event as well as ongoing pain and suffering, you’d need coverage to help pay for your legal defense and any financial payouts.
Your general liability insurance would also respond in the event of a foodborne illness that originates in your restaurant.
General liability insurance also provides coverage for product liability, advertising liability, slander, and libel claims against your restaurant.
Where Else Do You Have Exposures?
There may be several additional risk exposures in your diner. Talk to your independent insurance agent about your need for these additional policies or policy endorsements (coverage add-ons to a basic policy).
- Commercial auto insurance provides liability insurance if a business-owned vehicle causes an accident.
- Crime coverage protects your business if an employee or a group of employees engage in theft, forgery, or fraud that damages your business.
- Workers’ compensation insurance is required for any business that has employees. It protects your diner employees from the costs of work-related injuries and illnesses.
- Employment practices liability coverage protects you if a current or former employee sues you for discriminatory employment practices.
- Sign coverage pays for damage to outdoor signs that are not attached to your building that is caused by vandalism, theft, weather, or accidents.
- Utility interruption coverage provides income protection if you are unable to operate due to a covered utility (water, electrical) interruption.
- Commercial umbrella insurance adds an extra layer of protection with liability coverage above and beyond the limits of your CGL and certain other liability policies. It kicks in when the limits of your other applicable policies have been exhausted. If a customer or another third party sues you, this coverage can be the difference between financial devastation and complete recovery.
- Flood insurance and earthquake insurance may be necessary if your diner is in an area that is prone to these natural disasters. Talk to your independent insurance agent about your need for this type of coverage.
If you serve any alcoholic beverages in your diner, it’s important to purchase liquor liability insurance. Your independent insurance agent can help you understand the coverage limits and policy specifications that you need in order to cover your unique liquor liability risk.
How Much Does Diner Insurance Cost?
Your diner and the diner down the street will not pay the same amount for your business insurance. Costs vary significantly from diner to diner, depending on the policies you choose, the unique risks you face, the value of your inventory and equipment, and other factors like your location, number of employees, and the size of your establishment.
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right diner insurance. They’ll walk you through the handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get — but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can omit important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.