Restaurant Supply Business Insurance
Every restaurant supply business needs insurance. Knowing which type of insurance you need and the best place to get it is the next step.
This article will cover the main types of business insurance and help you find the best restaurant supply business insurance.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Restaurant Supply Business
The most common and comprehensive type of restaurant supply business insurance is general liability insurance. We recommend general liability insurance as your first line of defense against a variety of the most general and commonly occurring claims.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While a restaurant supply business isn’t legally required to carry general liability insurance, operating without it is extremely risky. If your restaurant supply business is sued, you could face fees totaling hundreds of thousands of dollars (or more).
Find the Right Policy at the Best Rate
Using a fully online insurance provider saves time and money and offers the most accurate quotes.
Cost of General Liability Insurance
On average, restaurant supply businesses in America spend between $400 - $700 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a restaurant supply business 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.
Start an Online Quote for Insurance
Finding the most affordable premium starts with getting accurate quotes from highly rated providers.
Common Situations That General Liability Insurance May Cover for a Restaurant Supply Business
Example 1: A customer is looking through your inventory to find a particular product when she slips and falls, breaking her arm. She asks that your business pay for her medical treatment. Your general liability insurance will likely cover this cost.
Example 2: A visitor trips and falls on a damaged area of the pavement outside of your restaurant supply business and decides to sue you, claiming you should have kept the area in good repair. Your general liability insurance will pay for legal fees, including the cost of a settlement if one is necessary.
Example 3: Another restaurant supply business in the area claims that your new logo is too similar to their own and decides to sue your business. The general liability insurance you carry will pay for your legal defense, including hiring an attorney and paying a settlement if one is required.
Check out our review of the Best Small Business Insurance Companies.
Other Types of Coverage Restaurant Supply Businesses 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 other types of insurance all restaurant supply businesses should obtain:
Commercial Property Insurance
You have invested a significant amount of capital in your restaurant supply inventory. If you were to lose most or all of your inventory in an unexpected event, like a fire, you may struggle financially to replace everything. But with a commercial property policy, you can file a claim with your insurer, and as long as the event that caused the damage is covered, you should be able to get financial help.
Product Liability Insurance
The products that you sell to restaurants are safe if used correctly, but that does not mean that a customer will not be hurt or claim to have been hurt by something you sold. Product liability insurance is designed to protect your business if you are sued over a product. It will pay for your legal defense, including a settlement if necessary.
Workers’ Compensation Insurance
If you have employees, your state most likely requires you to carry workers’ compensation insurance. Your policy will provide coverage for employees who are injured performing job-related duties. They can get medical treatment through the policy, as well as help covering lost wages while they recover from their injuries.
Commercial Umbrella Insurance
An umbrella policy provides extra protection beyond a general liability insurance policy. If you are in a situation where your general liability insurance limits are exceeded, like if you lose a major lawsuit, the umbrella policy will kick it.
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 restaurant supply business:
- 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.
Business Insurance Is the Best Way to Protect Your Business
If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.
Be sure that everything you've built is safe by getting business insurance.
Restaurant Supply Business Insurance FAQ
Can I buy business insurance online for my restaurant supply business?
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.
What is included in a business owner’s policy?
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.
What is the difference between business insurance and general liability insurance?
"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.
Do I need insurance before I start a restaurant supply business?
You should invest in business insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my restaurant supply business from everything?
Not necessarily. Certain exceptions may be written directly into your restaurant supply business insurance policy, and some perils may be entirely uninsurable.
Is general liability the same as business owners?
A general liability insurance policy covers only liability losses. A business owner's policy covers both liability and property losses.
How do I choose the best general liability insurance?
The best general liability coverage for your business really depends on the amount of coverage you’re comfortable with and how often you expect to file a claim. A relatively safe business with a very low risk of accident or legal liability could opt for lower premiums with higher deductibles.
However, if you are in an accident or injury-prone industry or are making advertising claims about the effectiveness of your service or product, you may wish to consider more extensive coverage. We recommend using a digital insurance provider like Next Insurance.
Do I need business insurance if I already have an LLC?
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.