How Much Do Restaurants Spend on Insurance?

Restaurants face a lot of different risks, meaning they require various types of insurance. Restaurant insurance is designed to protect the business from common dangers, such as sudden equipment breakdown, fire, theft and general liability lawsuits. Insurance can be expensive, however. So how much is business insurance for restaurants? 

There are many factors that influence insurance, so the price may vary per restaurant. Factors that change the cost of insurance include the restaurant’s: 

Prices differ between types of coverage. Restaurant insurance generally includes general liability, property insurance, workers compensation liquor liability insurance. 

General Liability 
General liability insurance covers accidents where a third party suffers bodily injury or property damage on the restaurant property. For example, if a customer slips and falls in your restaurant, general liability insurance can help with their medical expenses as well as the restaurant’s legal fees if the victim decides to sue. Rates for this coverage depend heavily on the size of the restaurant and amount of coverage. On average, restaurants pay about $950 a year for general liability insurance. The most common policy limit is $1 million. 

Property Insurance 
Commercial property insurance provides compensation if the physical assets of the restaurant are damaged or lost due to fire, lightning, smoke, wind, fire, vandalism and more. Rates for this insurance depend on the value of the items insured. It may cover the physical building as well as its contents, so consider the value of each insured item to determine how much coverage is needed. Restaurants pay an average of $742 for commercial property insurance. 

Workers Compensation 
Depending on where the restaurant is located, workers compensation may be required. Texas does not require businesses to carry workers compensation, but it’s highly recommended—especially for jobs with physical requirements, such as restaurant employees. 

Workers compensation costs are generally calculated based on payroll, so this cost depends on the size of the business and how many people are employed. On average, restaurants pay about $1,500 a year, but this cost could be anywhere between $600 and $10,000 a year depending on the size of the restaurant and other factors. 


Liquor Liability 
Liquor liability insurance covers incident where a patron causes bodily injury or property damage after drinking at a restaurant, as any damage they cause can come back to the business. This insurance costs an average of $620 a year.  

For more information on business insurance for your restaurant contact us at 281-395-5497.