Anywhere food is sold, cooked, and served along with enabling a person to sit on the premises to enjoy their meal is considered a restaurant. Restaurants range from anything as small as a café or diner to a full-service restaurant or bar. One thing they have in common is that insurance for restaurants is either required or needed to maintain a safe working environment for your Michigan restaurant.
Types of Insurance for Restaurants
The most common insurances that are needed or required are:
- Restaurant Insurance is a type of business insurance policy that is designed for restaurant owners. It provides coverage for general liability, property damage and any specific hazards that are unique to restaurants.
- Workers Compensation. This will ensure protection against any injuries that may occur to the employees while they are working or any illness that may have occurred due to their jobs.
- Unemployment Insurance. This is a state-federal program that will provide cash benefits to workers that are eligible due to being released from their current position.
- Commercial Vehicle Insurance. This is needed in a situation where a restaurant would have a catering or delivery service. Regardless if an employee uses their personal vehicles, this type of insurance would be needed due to covering any damages that are done while the employee is using their vehicles for work purposes.
Restaurant Coverage Options
Due to restaurants having a high amount of liability, there are specific liability coverage options that allow restaurant owners to be covered for in the event a lawsuit may arise.
- General Liability. This is an inclusion of operations and premise liability. It covers any damages or medical costs that were to arise out of any negligence that may have occurred on the premises and caused a customer to receive an injury or any damage to their personal property (vehicles, computers, phones, etc.)
- Product Liability. This protects the restaurant from any illness that may arise due to your product (food) and becomes sued for medical costs or punitive damages. These would include illness such as food poising, hepatitis, or salmonella.
- Liquor Liability. In the case of serving alcoholic beverages, this would cover you for customer intoxication and any behavior or acts that may arise from such intoxication (violent behaviors, property damage, or the like).
- Hired and Non-Owned Vehicles. This coverage aids you in the protection of any liability lawsuits that may arise from an employee using their vehicle for work-related services and are involved in an accident.
Along with liability coverage, restaurants also have specific coverage options for their property that are caused by fire, crime, electrical problems, and natural disasters. Among these include the following:
- Building Coverage, which provides compensation for any damages that may have been done to the structure of the building.
- Contents Coverage covers all your property (furniture, light fixtures, artwork, flooring, computers, and any kitchen equipment)
- Equipment Breakdown Coverage. This is equipment such as freezers, stoves, dishwashers, and air conditioning/heating units that are broken due to a mechanical failure or power surge. It will also provide your restaurant with compensation for any losses that are incurred so there are not any financial setbacks.
- Food Spoilage Coverage. In the event of a power outage, mechanical failure or other covered event causes your product to spoil and thrown away it will provide replacement compensation for the loss of product.
Additional Insurance Options for Restaurants:
- Loss of Income Coverage. This covers any lost income (monthly expenses and employee salaries) if your restaurant was to be temporarily closed due to a covered event until the day it is able to resume its operations.
- Coverage against Employee Crimes. It protects your restaurant if an employee commits a crime and a lawsuit was to occur. It also compensates for any financial losses.
- Drain and Sewage Back-Up Coverage protects against any damages that may result from a drain or sewage that was backed up and caused spoilage to food or food preparation areas.
Average Cost of Restaurant Insurance
Like any small or large business, the cost of insurance for restaurants can vary from one establishment to another. The factors that can affect your specific premium include:
- Number of Employees
- Serve Food, Sever Alcohol, or Serve Both
- If you Cater or Deliver
Michigan Laws for Restaurants
The Michigan Food Law and The Michigan Modified FDA Food Code are two documents that govern the licensing of food service establishments. The FDA Food Code provides standards for retail food establishments that reflect initiatives and strategies that are recommended by national food safety organizations. The Food Law is a statute that gives the Food Code the force and effects the law, along with providing the Michigan Department of Agriculture and Rural Development (MDARD) essential authorities, duties, and penalties to administer the program which regulates all food establishments in the state of Michigan.
The state of Michigan requires that all food establishments obtain a Food Service License. This can be done through the local health departments. The fees for this vary from each health department.
The Various Types of Food Establishments Include:
- Brick and Mortar
- Vending Machines
- Special Transitory Food Unit (STFU) – a temporary food establishment that operates throughout the state that is not required to return to a commissary.
The state of Michigan also requires the certification of servers, sellers, and bartenders to be certified in Alcohol Training and Certification for restaurants that have alcohol. This is done through the TIP program that was created in 2001 by the Michigan Liquor Control Commissions. This program is an online course that can be done anywhere a computer is made available. There is a $40 registration fee.
Are You in Need of Restaurant Insurance?
Whether you are opening a full-service or mobile restaurant, looking for insurance can be daunting. With so many options to choose from how do you know which is necessary for you? At Compass Insurance Michigan we will help tailor your insurance needs specifically for your restaurant. Just call or click the buttons below to receive quotes or get help from one of our live agents.