Do you feel the uncertainties associated with owning a food & beverage business? If yes, congrats! You are one step ahead of your competitors. Accepting the risk is the first step towards mitigating it. And food and beverage insurance policies help you do just that.
It’s everyday news to hear businesses get sued for liquor accidents, property damage, etc. And what makes things worse is that these mishaps can happen to anyone and pose a severe threat to your business continuity.
And that is why here are the most crucial food and beverage business insurance policies and their respective average monthly premiums to give you a comprehensive idea of how to protect your business!
So, let’s dive straight in!
Here Are The 5 Best Food And Beverage Business Insurance Policies
#1: Business Owner’s Policy
This insurance is highly recommended for food and beverage business owners. This insurance policy clubs many policies, like general liability, commercial liability, commercial property insurance, etc.
#2: Workers’ Compensation Insurance
This policy covers those costs that are denied by health insurance. This insurance policy intends to protect you against your employee’s work injuries. Workers’ Compensation Insurance also helps deal with employee death and even rehabilitation costs.
#3: General Liability Insurance
With this policy, it will be easier to get a commercial lease. This insurance policy intends to shield you against risks like customer injury as well as your property’s damage.
#4: Commercial Auto Insurance
This insurance policy intends to shield you against costs in case of accidents with your business vehicles. This policy also provides risk cover in case your food truck gets stolen!
#5: Liquor Liability Insurance
This insurance policy intends to shield you against medical costs and legal fees if someone damages property after consuming alcohol served by either your bar or restaurant.
What cost does one pay to take insurance?
Many aspects go into determining the cost of an insurance policy, like, the level of risk in a business, its size, percentage of sales and expense of equipment, etc.
Since every policy serves a different purpose and needs, its cost also varies. But below are the average costs of all the above-discussed policies:
#1: Cost of Business Owner’s Policy
Business Owner’s Policy is a combination of many policies. Still, in the case of food and beverage businesses, we are taking mainly two insurance policies, i.e., general liability and commercial property insurance.
Usually, food and beverage businesses pay a premium of approximately $135 every month. And the most crucial factor in determining the premium of this policy is the business property.
Example: There is a restaurant which has a luxurious kitchen. On the other hand, there is a coffee shop with a humble preparation space. When we compare these two properties, the premium paid by the restaurant will be more than the coffee shop.
#2: Cost of Workers’ Compensation Insurance Policy
Workers’ compensation policy is apt to recover employees’ injury and illness-related costs. It covers them all, whether medical expenses, partial lost wages of employees, or rehabilitation costs!
The premium of this policy is determined based on the number of employees and occupational risks. However, the average monthly premium of this policy is around $115.
Example: When a worker is met with an accident at work, the business owners are not directly liable to pay for the worker. The insurance company bears all the expenses.
#3: Cost of Liquor Liability Insurance Policy
The liquor liability policy is necessary for businesses that offer alcohol. This policy insures businesses against customer injury and property damage caused by an intoxicated person at the business site.
The premium determining factors of this policy are location and alcohol sales—average monthly premiums for this policy account to approximately $75.
Example: A customer visits the bar and suffers an injury because of a drunk customer who stumbled upon him. The injured person can now ask the business to pay his medical bills and other immediate expenses. These expenses can skyrocket quickly.
But, the policy is here to the rescue of the business owner. If the customer doesn’t cooperate and sues the business owner in the future, the policy also covers the legal costs of the suit.
#4: Cost of General Liability Insurance Policy
General liability insurance policy guards you from advertising injuries like infringement, slander, and libel. It also covers customer injuries and property damage. Thus, most restaurants and bars opt for this insurance policy.
The premium of this policy is determined based on industry risks. This policy will cost you nearly $40 per month, which is a fair deal if you set it against the odds it protects you from.
Example: You own a food business that provides catering services for corporate receptions. One fine day, one of the food equipment catches fire. This property damage caused by the fire is compensated through the policy. It can also handle any lawsuit that might arise due to the accident.
#5: Cost of Commercial Auto Insurance Policy
A commercial auto insurance policy is another crucial policy required for combating the risks involved in food and beverage businesses. It covers food trucks, vans, and personal vehicles used for business work.
The factors that get into deciding the premium are majorly the cost of your commercial vehicles and their usage. You can expect to pay around $165 per month for this policy.
Example: You took a catering project for a party. But your delivery boy meets with an accident while delivering food to the customer. Now, your insurance policy will cover the damages to your vehicle and any lawsuits arising henceforth.
Factors to Consider while choosing food and beverage Business Insurance Policies
#1: Business Requirements
The most important factor is your business requirements. For example, if you own vehicles that you or your employees use for running business errands, a commercial auto policy is a must-have for you.
#2: Find The Right Insurance Company For Your Requirements
Another factor in choosing the policy is the insurance company. Check the claim settlement ratio, the premium costs, and the policies provided by the company and take your decision.
#3: Calculating The Risks And Required Limits
Calculate the risk factor for your industry and make an informed decision.
How do insurance policies benefit food and beverage industry owners?
- Insurance secures business owners from accidents, property damage, injuries, and other kinds of unexpected events.
- Taking insurance policies allows them to focus on working better, thus providing better customer service.
- Insuring businesses allows them to stand a better chance at getting a commercial restaurant lease.
In A Nutshell…
Risks are inevitable and present in all businesses, and food and beverages businesses are no exception. There is an endless list of potential hazards. But proper insurance coverage can help them stay secure and serve customers better. Thus, owners should secure themselves by choosing the required insurance policies.
So, I wrap up this article on food and beverage insurance policies. I hope it helped you and solved your queries. If any more queries buzz your mind, drop them in the comments below. I am all ears!