Common Insurance Exclusions to Watch Out for in Restaurant Insurance

Regardless of its size, specialty or subsector, all restaurants include inherent risks and exposures. As an owner or operator, you must be vigilant in recognizing, analyzing and addressing these threats, as even slight mishaps could incur significant consequences. That’s where restaurant insurance can play a pivotal role in your financial stability. However, while you may understand the importance of appropriate coverage, awareness of any coverage gaps or exclusions is also critical.

What Is Restaurant Insurance?

You should first understand that restaurant insurance may be composed of many different components. Separate policies can work together to form a comprehensive coverage portfolio capable of addressing the various risks and exposures relevant to your restaurant. Still, even while combining the protective powers of these various types of insurance, you may need to be aware of various potential exclusions.

What Are Exclusions?

Exclusions are incidents or perils that are not covered under an insurance policy. Within your restaurant insurance portfolio, this means that you’ll likely need to identify possible exclusions within each individual policy. In the restaurant industry, various frequently needed types of insurance may include the following exclusions:

• Wear and tear—While commercial property insurance may protect appliances, equipment and plumbing systems, failing to maintain aspects of your restaurant could still lead to damaged property. If such losses are the result of your own negligence, your insurance may not cover them.

• Intentional acts—Various aspects of your coverage, such as general liability insurance and workers’ compensation insurance may cover losses arising from accidents. However, if such incidents were the result of intentional acts, such as violence in the workplace or malicious behavior by employees, you may need to manage consequences out of pocket.

• Floods—If heavy rains, broken water mains or other flooding incidents cause water damage in your restaurant, a standard commercial property insurance policy will typically not offer coverage. Instead, you’ll need to secure specialized flood insurance to ensure you’re covered for these incidents.

• Earthquakes—Like floods, these natural disasters are generally excluded as covered perils. Fortunately, alternative coverage is typically available.

• Liquor liability—If your restaurant serves alcohol, you’ll likely need liquor liability insurance to account for losses and damages if you overserve someone or an intoxicated customer causes third-party losses. These incidents are not typically covered under general liability insurance.

We’re Here for You

Contact Koziura Insurance Agency today to get a free quote and ensure your restaurant is suitably covered while having addressed potential exclusions and coverage gaps.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.