Last Updated: February 23, 2024, 9:58 am by TRUiC Team

Fast Food Restaurant Business Insurance

Getting insurance for your fast food restaurant is essential.

Fast food restaurants need to be protected against things like claims of premises liability, food and safety violations, and breach of contract.

For example, a guest claims that your restaurant has unsanitary conditions, or customers contract food poisoning after consuming food your restaurant served.

We’ll help you find the most personalized and affordable coverage for your unique business.

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Fast Food Restaurant

General liability insurance is — generally speaking — one of the most important insurance policies for fast food restaurants. 

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

Due to the array of risks faced by fast food restaurants, yours is unlikely to be sufficiently protected with general liability alone. Some other useful policies your business could use include:

  • Business interruption insurance in the event your restaurant has to close unexpectedly
  • Workers’ compensation insurance for any employees you have
  • Commercial umbrella coverage in case you reach the limits of your other policies
  • Commercial property insurance to cover your restaurant’s kitchen equipment (as well as the restaurant itself)

The first step in deciding where to buy coverage from your business is deciding which type of insurers is best for you:

  • Traditional brick-and-mortar insurers like Nationwide or Hiscox
  • Online insurers like Tivly or Next Insurance

In general, online insurers offer great insurance solutions at lower prices than their “traditional” peers, thanks to their low overheads and use of AI technology. As such, we recommend them for small businesses on a budget.

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Cost of General Liability Insurance

On average, fast food restaurants in America spend between $500 - $1,200 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a fast food restaurant to other professional industries using the graph below.

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Graph showing average price of general liability insurance prices per industry

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Find the Best Rate

Discover the best coverage at the lowest rate in our affordable business insurance review.

Common Situations That General Liability Insurance May Cover for a Fast Food Restaurant

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Example 1: A customer comes into your restaurant while an employee mops the floor. The employee forgot to display a “wet floor” sign and the customer slips, fracturing their wrist. General liability insurance would cover the customer’s medical expenses and any other damages in the event of a lawsuit.

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Example 2: While potential investors review your kitchen operations, one investor reaches for a top shelf and accidentally knocks several large boxes down on everyone. Your general liability coverage would cover any related medical costs and other potential damages stemming from the accident.

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Example 3: Your restaurant recently added hot drinks to its breakfast menu. As your staff learns to use the new espresso machine, some drinks come out hotter than others. Unfortunately, a hot chocolate burns a customer as they sample the drink. General liability insurance would cover the customer’s medical bills and any other damages in the event of a lawsuit.

Other Types of Coverage Fast Food Restaurants Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

Business Interruption Insurance

While you can quickly resolve most accidents at your restaurant, a fire, break-in, or severe weather could force you to temporarily close for repairs. In such situations, business interruption insurance can help cover some of your financial losses until you’re ready to open again.

Workers’ Compensation Insurance

Most states require restaurants to carry workers’ compensation insurance for their part-time and full-time employees. This insurance option covers medical costs and other expenses if an employee becomes injured on the job. Workers’ compensation insurance also covers disability and death benefits stemming from work-related incidents.

Commercial Umbrella Coverage

Operating a fast food restaurant poses numerous risks, and certain situations could lead to a lawsuit that exhausts your primary insurance limits. Commercial umbrella insurance provides coverage beyond your current policy limits in the event of an expensive accident or lawsuit. 

Commercial Property Insurance

If you own the building in which your restaurant operates, you should consider investing in commercial property insurance to protect against common accidents caused by fire and severe weather. This type of coverage not only protects your building, but also the business-related contents housed inside like specialized kitchen equipment, computers, and furniture.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your fast food restaurant:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Fast Food Restaurant Business Insurance FAQ

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Yes. Making sure your fast food restaurant owns business insurance before it opens up shop is an essential step in protecting its financial assets from the array of food-related risks that it will shortly be exposed to.

Furthermore, in some instances, your restaurant may be legally required to hold specific policies if you hire employees or use vehicles for business purposes.

Not necessarily. Certain exceptions may be written directly into your fast food restaurant insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.