Specialized Insurance for the Food Service and Hospitality Industry
Restaurants and food service businesses operate in one of the most liability-exposed and operationally complex business environments there is. A customer who slips and falls, a food safety incident that causes illness, a grease fire that damages your kitchen and neighboring businesses, a bar fight that results in a lawsuit, a delivery driver accident, a key employee who injures their back — the range and frequency of claims in the food service industry is significant, and the consequences of being underinsured can be severe.
GLS Insurance serves restaurants, bars, food trucks, catering businesses, franchise food service operations, and hospitality businesses across all 17 states in our territory. From small independent restaurants in Springfield, Missouri and Nashville, Tennessee to large multi-unit operations with locations across Texas, Florida, and the Carolinas, we build programs that reflect the real risks of the food service business.
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Liquor Liability
Risk Factor
Any establishment that sells, serves, or assists in the purchase or use of liquor is open to a liability claim as a consequence of someone getting inebriated to the extent that injuries or property damage result.
Solution
If you are in the business of selling or serving alcohol, it is critical that you protect yourself from potential financial losses by obtaining a liquor liability insurance policy. Having the right policy in place could help cover your legal costs, court fees, and any civil or criminal damages stemming from an incident involving liquor.
Valet Parking
Risk Factor
Providing a valet service is convenient for your guests, but damaging a vehicle or property, or causing injury, is a very real risk associated with offering this service.
Solution
Obtain a general liability policy to protect your business from lawsuits by a third party. Be certain that a garagekeepers legal liability policy is also in effect with adequate limits to cover any physical damage to a guest's vehicle or other vehicles on-site. If you are using an independent valet service, obtain a certificate of insurance to verify they have the proper coverage with adequate limits. Also make sure that your business is named as an additional insured under their policy.
Business Income
Risk Factor
In the event of a covered cause of loss, most policies include coverage for the income you cannot collect. What happens if one of your key suppliers, such as your food or beverage distributor, is incapable of supplying you with what you need to keep your business running?
Solution
Make sure that your business income insurance includes contingent business income coverage to protect against the loss of potential earnings to your restaurant caused by the inability of a key vendor to provide a component necessary for the completion or execution of your services.
Employment Practice Liability Insurance (EPLI)
Risk Factor
On average, it's estimated that three out of five businesses will be sued by their employees. Restaurants, just like any other business, are vulnerable from the pre-hire process through to a possible reduction in workforce. Claims can stem from just about anything, such as someone taking a "joke" the wrong way and being offended.
Solution
Coverage to protect you against this risk normally comes as a standalone policy. The right coverage is critical to your risk management process as it protects against discrimination, wrongful termination, sexual harassment, and other employment-related allegations. Typically, the policy will cover your business as well as your directors and officers. Third party coverage is an added option, usually accomplished via a policy endorsement, and addresses claims made by customers or vendors against you from acts committed by employees.
Sign Coverage
Risk Factor
Exterior signs associated with your business are vulnerable to fire, vandalism, and weather. Most commercial property policies offer a sublimit of coverage for signs, but it might not be enough.
Solution
Evaluate your sign exposures and determine if your existing commercial property insurance policy provides sufficient coverage. If not, increase the policy limit as required.
Systems Breakdown Insurance
Risk Factor
Equipment such as freezers, stoves, dishwashers, and air conditioning units are vital when running a restaurant. If a power surge or mechanical failure results in equipment breakdown, your business can experience expensive repairs and lost income.
Solution
Make sure you maintain systems breakdown insurance, including business interruption and spoilage coverage so that you can get your business up and running again without suffering financial setbacks.
Flooding
Risk Factor
As exposed by Superstorm Sandy and other significant weather events in recent years, flooding can occur in almost any location and to any business. Are you protected?
Solution
Flood insurance is typically not included in a commercial property insurance policy, but can generally be added by endorsement as long as the property is not in a high risk flood zone. If coverage is excluded from the policy, you should look into the cost to add it. If your property is in a high risk flood zone, you will need to obtain a standalone policy. In either case, it’s important to have coverage.
Cyber Liability
Risk Factor
Just about all businesses rely on technology in some way; it's increasingly used to store sensitive information, such as credit cards, passwords, and social security numbers. However, you're at risk if this information is lost, stolen, or compromised. In fact, you may even be legally obligated to alert those impacted by the breach and possibly pay for any financial loss incurred.
Solution
Experiencing a data breach is often not a question of if but when. Securing a cyber liability policy can offer coverage for expenses associated with compliance regarding data breach notification laws, securing legal counsel to advise on incident response, credit monitoring services, and paying for regulatory defense, as well as penalties arising from privacy law violations.
Improvements and Betterments
Risk Factor
Most restaurant owners remember to insure their contents, such as tables and chairs, but do not factor in the cost of the improvements they have made when selecting a building or contents limit.
Solution
If you have done or are considering a renovation to your restaurant, factor the cost into the building limit if you own the building or contents limit if you lease.
Food Contamination / Spoilage Coverage
Risk Factor
A power outage, mechanical failure, or other covered event can cause food to spoil, which then must be discarded.
Solution
This coverage will cover the replacement cost of the spoiled food. Most policies include coverage, but you should confirm the limit is sufficient.
Employee Theft
Risk Factor
Two things a restaurant has easily accessible are food and money. Employees have been known to run scams to pocket money or steal food to take home or give away to friends and family members.
Solution
Make sure you have coverage for employee theft. This can help compensate you for some of your financial losses.
Commercial Auto / Hired and Non-Owned Auto Liability
Risk Factor
If your restaurant offers food delivery service, whether the drivers are using their own vehicles or those owned by the company, you can be named in a lawsuit as a result of injury or damage caused by them while making a delivery for you.
Solution
A business auto insurance policy should be maintained if the vehicles are owned by the company. If employees are using their own vehicles to make deliveries, then hired and non-owned auto liability coverage should be maintained. Both will defend you if you are named in a lawsuit as a result of an employee getting into an accident while making a delivery for you.
Workers' Compensation
Risk Factor
If one of your employees receives an injury or becomes ill due to a work-related occurrence, you are required by law to have the proper coverage in place.
Solution
Workers' compensation protects your employees should a job-related injury or sickness occur during the course of employment. This coverage is required by law and may vary by area, so be sure that you understand your obligations for all physical locations where your business operates in and all physical locations where you hire your employees.
Key Coverages for Restaurants and Food Service Businesses
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General Liability Insurance — Covers bodily injury and property damage claims from your restaurant operations. Slip-and-fall injuries, food-related illness claims, customer property damage, and liquor-related incidents (if not covered separately) are all addressed under general liability.
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Commercial Property Insurance — Covers your building (if owned), kitchen equipment, furniture, fixtures, inventory, and business property. Restaurant property claims — particularly fire and grease-related fire damage — are among the most costly in the commercial property world. Replacement cost coverage is critical.
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Business Income / Business Interruption Insurance — If a covered loss forces your restaurant to close temporarily, business income insurance replaces lost revenue and covers ongoing fixed expenses like rent, utilities, and employee wages during the restoration period.
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Workers’ Compensation — The food service industry has some of the highest workers’ comp claims rates of any service industry. Burns, cuts, back injuries, slip and falls in the kitchen, and heat-related illness generate claims regularly. Required by law for employees in virtually every state.
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Food Contamination / Spoilage Coverage — Covers the cost of replacing food inventory spoiled by equipment breakdown, power outage, or contamination events. Can also include the cost of professional cleaning and temporary closure.
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Cyber Liability Insurance — Restaurants that process customer payment data, maintain loyalty program databases, or operate online ordering platforms face data breach exposure. A breach involving customer payment card data can trigger significant notification and remediation costs.
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Employment Practices Liability (EPLI) — The food service industry has high employee turnover, a young workforce, and workplace environments that generate employment claims. EPLI is increasingly important for restaurant operators in states with active employment law enforcement.
State-Specific Considerations for Restaurants
Liquor liability laws — commonly called dram shop statutes — vary significantly across our 17 states and have a major impact on the liability exposure of bars and restaurants that serve alcohol. Texas, Tennessee, Florida, and Illinois all have active dram shop litigation environments. South Dakota and some Southeastern states have different frameworks. GLS Insurance understands the dram shop landscape in each state and helps restaurant clients carry appropriate liquor liability limits.
Frequently Asked Questions: Restaurant Insurance
Does general liability automatically include liquor liability for a restaurant that serves alcohol?
No. Most general liability policies contain a liquor liability exclusion for businesses that manufacture, sell, or serve alcohol. Liquor liability is a separate coverage that must be added to your program. Any restaurant or bar serving alcohol should carry standalone liquor liability insurance.
A customer claims they got food poisoning at our restaurant. Does our insurance cover that?
General liability covers claims of bodily injury arising from your products including food, so a food-borne illness claim would be covered subject to your policy terms and exclusions. Your insurer will investigate the claim, and if a lawsuit is filed, will defend you and pay any covered damages.
How much does restaurant insurance cost?
Premiums vary based on your annual revenue, the type of food service (fast food vs. sit-down vs. bar), whether you serve alcohol, your state, your building size, and your claims history. Restaurants with bars and late-night alcohol service typically pay more than daytime-only restaurants. GLS Insurance shops multiple carriers to find competitive pricing for your operation.
We have multiple restaurant locations across several states. Can GLS coordinate coverage?
Yes. GLS Insurance is licensed in all 17 states in our service territory and regularly coordinates multi-location, multi-state restaurant insurance programs. We make sure coverage is consistent and compliant across every location.
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