Adobe Stock

Choosing the Right Restaurant Insurance

Here’s how to find the appropriate coverage at an affordable price. 

Having insurance is part of running a restaurant business. But having the right insurance for a given restaurant is more of an art than a science—every brand and location is unique and assumes different risks and liabilities. Not having the right insurance could potentially bankrupt a small business should something bad happen. 

Restaurant operators do not have the flexibility to be thinking about insurance on an everyday basis and keep their businesses running smoothly. Tackling day-to-day operational challenges is usually the most pressing for operators, so time is limited for researching insurance coverage and rates.  

“Restaurant operators are like a lot of small business owners,” says John Cassetta, sales manager at CoverWallet. “They’re really good at what they do. But when it comes to understanding the ins and outs of insurance coverages, it can be daunting.” 

Here’s what opening a restaurant often looks like: the owner of the location or brand signs a lease and the property owner tells them they’ll need proof of general liability coverage. During this exchange, operators may also highly consider both property coverage and worker’s compensation coverage. Throughout this process, many operators often wonder, “instead of several phone calls to make all of that happen, wouldn’t it have been nice to know all of this upfront and avoid headaches?” 

When opening a restaurant, the internet has become a popular way to shop for insurance—getting a quote has never been easier. Because the process is so daunting, some operators may still go the old-school route and turn to a local insurance agent. The issue there, Casetta says, is that an operator may have to shop the quote around to other agents in order to be sure they’re getting a good price, and that can be time intensive. 

CoverWallet, an Aon company, finds itself inhabiting the space between the two extremes of quickly getting a quote online and finding a local insurance broker to walk an operator through the process. CoverWallet was founded upon the belief that a digital quote should be easy to get—but that every business owner is unique, and deserves an agent who can explain the customized insurance coverages they’ll need to be successful. 

CoverWallet’s services have become invaluable to restaurant operators who value their time, their bottom line, and enjoy knowing they have the coverages they need to run a modern restaurant. CoverWallet offers operators a range of quotes and assists in evaluating not just which is cheapest—anybody could do that—but which coverages are most appropriate for a given restaurant, or restaurant chain. 

For example, consider how much the restaurant industry has changed in the past four years, Cassetta says. With restaurant brands across the country adding things like online ordering and loyalty programs, safely storing a consumer’s private information is a disaster waiting to happen. And yet, how many operators are thinking about cyber insurance? They may not know they could be on the hook if a consumer’s payment details were hacked via their online platform. In today’s digital world, Cassetta says, cyber insurance is something most brands aren't thinking about enough. 

“Even a ‘small’ cyber attack can carry a magnitude of costs with it,” Cassetta says. “In fact, multiple industry reports show that the average data breach costs a small business approximately $200,000. If a restaurant operator does not have the appropriate cyber coverage, they could be stuck paying out-of-pocket for the costs associated with recovering from a data breach.” 

Another type of insurance operators may not have considered is liquor liability. There are horror stories out there of bartenders who were held liable for overserving customers who got behind the wheel and caused harm while intoxicated. Restaurants might also be held liable should a situation like that arise, Cassetta says. 

“Liquor liability is one of those things that makes people ask the question, ‘Well, how would that be my fault as a restaurant operator?’” Cassetta says. “And on a fundamental and human level I totally understand and may even agree with that. I wish it didn’t work that way. But there are precedents there, and if that driver sideswipes a family of four after being overserved at your restaurant, suddenly you’re looking at an astronomical amount of money that may come back on you.” 

Liquor liability and cyber insurance are just two of the coverages that restaurant operators may not know enough about. They also might not know enough about what is covered by certain insurance plans. For example, if an operator is looking at two quotes and one of them is considerably cheaper, it may be too good to be true. The cheaper plan may have a higher deductible, or not cover things one might assume a general liability plan would cover. 

This is where CoverWallet comes in so handy for those who—like so many restaurant operators—are not experts in the field. A CoverWallet agent can help break down line-by-line what the plan would cover and, perhaps equally important, what it wouldn’t cover. 

“As a restaurant operator, you don’t know what you don’t know,” Cassetta says. “I very much understand how tempting it would be to see the cheaper option and think, ‘No brainer, let’s do that.’ But what you might not know is that you’d be on the hook if x, y, or z happened, even though you’d think that would be something covered by a general liability plan, for example.” 

While insurance tech has developed into an entire field that promises to replace the traditional brick-and-mortar insurance brokers, CoverWallet offers small business owners a solution. It’s a hybrid of sorts, where operators are offered quick and efficient digital solutions paired with the personal touch of an advisor. That way, brands can be reassured in knowing they’ve chosen the right restaurant insurance and gotten it for the right price. 

“The beauty of CoverWallet is that we’re not just a tech company,” Cassetta continues. “Like a traditional broker, we’re a single point of contact that can help you with everything ranging from getting a quote, choosing a plan, and submitting payments. But we also offer a really user-friendly and interactive way to deal with an insurance carrier. We are a comprehensive solution that can help restaurant operators get what they need quickly and efficiently, perfectly tailored to their needs.” 

For more on choosing the right insurance, visit the CoverWallet website