Company insurance is intended to safeguard the financial assets of a business owner and is a vital investment for a fast food establishment.
This article will discuss the primary insurance coverage for fast food businesses, general liability insurance, as well as additional policies that are appropriate for this industry.
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Fast Food Restaurant General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
COMMON SITUATIONS THAT A FAST FOOD RESTAURANT’S GENERAL LIABILITY INSURANCE MAY COVER
Example 1: A client enters your restaurant while an employee is sweeping the floor. The employee failed to post a “wet floor” notice, causing the client to stumble and fracture their wrist. In the case of a lawsuit, general liability insurance would cover the customer’s medical expenditures as well as any other losses.
Example 2: While possible investors are seeing your kitchen operations, one of them goes for a high shelf and inadvertently knocks several heavy boxes down on everyone. Your general liability coverage would cover any resulting medical expenses and any possible losses.
Example 3: Your business just expanded its morning menu to include hot beverages. Some drinks come out hotter than others as your team learns to utilise the new espresso machine. Unfortunately, a consumer is burned while sampling a hot chocolate. In the case of a lawsuit, general liability insurance would cover the customer’s medical fees as well as any other losses.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
Fast food businesses in America pay an average of $500 – $1,200 per year for $1 million in general liability insurance.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Other Types of Coverage Required by Fast Food Restaurants
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that all fast food establishments should have are as follows:
Insurance for Business Interruption
While most mishaps at your restaurant may be resolved quickly, a fire, break-in, or extreme weather may need you to shut briefly for repairs. In such cases, business interruption insurance may assist in covering some of your financial losses until you are ready to reopen.
Insurance for Workers’ Compensation
Restaurants in most states are required to have workers’ compensation insurance for both part-time and full-time employees. If an employee gets injured on the job, this insurance option will cover medical fees and other expenditures. Workers’ compensation insurance also covers disability and death payments resulting from workplace injuries.
Coverage Options for Some Fast Food Restaurants
In addition to the policies listed above, your fast food business may need a few more kinds of coverage based on particular features of your operations. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Commercial Umbrella Insurance
Operating a fast food business has several dangers, and some circumstances may result in a lawsuit that exceeds your basic insurance limits. Commercial umbrella insurance extends your present policy limits in the case of a costly accident or litigation.
Insurance for Commercial Property
If you own the building where your restaurant is located, you should consider purchasing commercial property insurance to protect against common fire and severe weather incidents. This coverage covers not only your structure, but also the business-related objects contained therein, such as specialist culinary equipment, computers, and furnishings.
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.