As a restaurant owner or catering business professional, you've worked hard to build your business. You've turned your passion for the culinary arts into a respected food business at the heart of your community. So when it comes to protecting the business you've built from the ground up, you're not one to gamble. But as business insurance misinformation persists, you may be inadvertently leaving your small food business exposed to risks that are common in your industry.

After all, it only takes one claim from an injured or ill customer to close a restaurant's doors for good if you don't have adequate coverage. Attorney's fees to defend your restaurant against a meritless claim can quickly exceed thousands of dollars, and not many small business owners have that expendable cash on hand. Similarly, the culinary equipment you rely on to sustain your food business could easily be damaged in a fire or natural disaster—and without insurance, all the calamity-related expenses would have to be covered out of pocket.

Read on to uncover the facts about business insurance and how you can protect your food business from uncertainty.

Restaurant and Bar Insurance Myths Busted

Restaurant and Bar Insurance Myths Busted

In the online world of business insurance, there's plenty of myths and misinformation as to which kinds of coverage a restaurant business needs or how the coverage actually benefits a small-business owner. Without accurate information about business protection, many business owners may be exposing themselves or their personal assets to risk.

To make sure your business protection plan adequately shields your food business from unexpected events, take a look at these widely accepted business insurance myths below, such as…

  • Business Insurance Myth #1: "You can't bleed a rock." There's a long-held belief that if a person doesn't have a lot of money or assets that they can't be sued. Unfortunately, this simply isn't the case. No matter how small your restaurant or catering business is, if someone files a claim against your business and a settlement is awarded, that settlement can be collected. This means equipment can be seized and sold and bank accounts and assets can be seized to pay the judgment. Remember, you don't have to have millions of dollars to require business protection planning.
  • Business Insurance Myth #2: "I am a culinary professional, and I follow all state food regulations. I don't expect to be sued by either customers or employees." Another hard truth is that even the best-run businesses are often the target of lawsuits, no matter how frivolous the claims may be. Even if your restaurant business is not found liable during the litigation process and no judgment is awarded, the costs to defend a claim in court can bring your business to a full standstill. The time spent defending your business in court and the attorney's fees can be enough to financially devastate a small business. That's why restaurant owners often turn to General Liability Insurance to protect them from court costs associated with covered liability claims.
  • Business Insurance Myth #3: "My food business doesn't require insurance / my restaurant is too small for its own policy." Even if your state doesn't require business insurance, this coverage is a necessary measure in protecting your business from liability, disasters, and unpreventable risks. In a service-based business, your restaurant welcomes people through its doors daily—and with customers, there's always the chance that they may suffer an injury on your premises or have a serious allergic reaction to your food. Business insurance is intended to help your small business avoid a serious financial blow. Plus, many business policies these days are tailored to be affordable for entrepreneurs and small startups. Talk to an insureon agent for assistance in determining which policies can meet your business's needs.
  • Business Insurance Myth #4: "The cost of insurance outweighs the protection it provides." Not by a long shot! Most small business owners see business insurance as an extra expense they can't spare, but the truth is that business insurance is a small price to pay for the millions it could provide your business in coverage should your restaurant be sued. And when you work with insureon, we can provide quotes from multiple A-rated insurance providers to help you find the coverage you're looking for at a competitive price.
  • Business Insurance Myth #5:"I have a business insurance policy, so I'm completely covered." One of the most pervasive myths is that a single policy covers all your insurance needs, but this simply isn't so. No two policies are alike, and exclusions vary from carrier to carrier. That's why your best defense is to work with an insurance provider you trust and to know your policy like the back of your hand. If you need additional coverage, some policies will allow you to purchase Umbrella Liability coverage to extend your limits. Others can be tailored with endorsements specific to your line of work. Read your policy's exclusions, and when in doubt, you can always contact an insureon agent for clarification.
  • Business Insurance Myth #6: "My restaurant / catering employees are mostly part-time. My business doesn't need Workers' Compensation coverage." Temporary employees and even volunteers injured on your business property because of a duty they have been assigned as work can file a lawsuit against your business. Additionally, each state carries different laws concerning Workers' Compensation requirements. As a general rule, though, if your business has employees, you will want to have Workers' Comp. This coverage protects your business should an employee sue your restaurant due to a work-related illness or on-the-job injury. In addition to providing funds for legal fees, the coverage typically includes the cost of immediate medical attention.
Protect Your Restaurant or Bar

Protect Your Restaurant or Bar

If you're ready to give your food business the security it needs to thrive, contact an insureon agent today. We can help you understand the risks involved in your industry and offer guidance as to which policies will most benefit your business protection plan.

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