Food & Restaurant Business Insurance

General liability insurance is where nearly every food business starts, and many landlords and event venues will ask to see proof of it before you begin operating. It can help cover third-party claims of bodily injury and property damage — let’s say a customer gets hurt after slipping on a wet floor in your dining room or tripping over a loose rug.

General liability policies also typically include product liability coverage, which can help defend your business if a customer alleges that your food caused an allergic reaction or foodborne illness. General liability coverage limits for food businesses usually run $1 million per occurrence and $2 million aggregate — these are the numbers most leases and vendor contracts are looking for.

If your business sells or serves alcohol, don’t count on your general liability policy to step in. Standard general liability policies typically exclude alcohol-related claims for any business that manufactures, distributes, sells, serves, or furnishes alcohol — and that exclusion surprises many operators. The stakes are real: Dram shop laws in over 40 states and Washington, D.C., can hold your business responsible for injuries or property damage caused by an intoxicated patron, even after they’ve left your establishment.

Liquor liability insurance can help cover legal defense costs, settlements, and third-party medical expenses from those claims. In some states there’s a legal layer too: Michigan, for example, requires retail liquor licensees to show at least $50,000 worth in financial responsibility — a requirement most businesses meet with liquor liability insurance.

Workers’ compensation insurance is required by law in nearly every state, though the exact employee count threshold varies (e.g., some states require it at three, four, or five employees) — Texas and South Dakota are the only states that allow most private employers to completely opt out from providing workers’ comp coverage. It’s easy to see why regulators take kitchens seriously: workers can easily get hurt working with hot fryers, sharp knives, slick floors, and heavy lifting all shift long. Cuts are the most frequent restaurant workers’ comp claim, but slips and falls drive the biggest share of claim costs — and a single serious burn or back injury can run from $60,000 well into six figures.

Workers’ comp typically pays medical expenses and a portion of lost wages for injured employees, and it can help protect you from employee lawsuits over workplace injuries. Premiums for restaurants typically average between 1% and 3% of payroll — and in most states, tips don’t count toward that payroll calculation.

A Business owner’s policy (BOP) bundles general liability and commercial property insurance into a single policy, which often costs less than buying each separately. The property side can help protect the physical things you’ve poured money into — ovens, walk-in freezers, point-of-sale (POS) systems, and dining room fixtures — against covered events like fire, theft, wind, and vandalism. One add-on worth asking about: food spoilage coverage. Standard property insurance generally won’t reimburse you for inventory lost to a power outage or refrigeration breakdown, but a spoilage endorsement can help replace perishable stock when the walk-in refrigerator gives out at the worst possible moment.

If your business owns vehicles — for deliveries, catering runs, or mobile food service — you’ll need commercial auto insurance. Personal auto policies typically exclude business use, which means a claim from an accident on a catering run could be denied outright. Commercial auto can help cover third-party injuries and property damage from an accident, along with physical damage to the vehicle itself. For food trucks, it typically extends to permanently attached kitchen equipment, such as built-in fryers and ventilation hoods.

If your staff deliver food in their own vehicles, don’t stop there. Their personal vehicle policies generally exclude delivery driving, and when an employee causes an accident on a run, liability can flow up to your business. Hired and non-owned auto (HNOA) coverage is built for exactly this scenario — it can help protect your business when employees drive personal vehicles for work. It typically won’t cover damage to the employee’s own vehicle, so many owners also require delivery staff to carry a business-use endorsement on their personal policies.

Using a delivery app such as Uber Eats or DoorDash instead? Those couriers are not your employees but instead have a relationship with the platform. The major platforms carry liability coverage for active deliveries, which keeps most of the road risk on their side. Still, injured parties sometimes name every business in the chain, so it’s worth reviewing your platform agreement’s insurance terms and asking your insurer whether and how your policy or policies would respond if your restaurant were named in a delivery-related claim.