A Comprehensive Guide to Restaurant Insurance in New Jersey

Owning a restaurant in New Jersey can be a lot of hard work, but it is a great way to make a living.

However, finding the best chefs and listing the right recipes is not the only thing you need to do as a restaurant owner.

You also need to protect your business against legal troubles that can be heavy on your pockets and thin your profit margins.

This is where a restaurant insurance NJ comes in.

Protecting restaurants and eateries against a range of financial risks and hazards, restaurant insurance ensures peace of mind for owners and stakeholders alike.

Want to learn more?

Read on for a one-stop guide to restaurant insurance NJ.

Understanding Restaurant Insurance: Definition + Specifics

Restaurant Insurance NJ is a set of coverages that safeguard restaurant owners against financial losses and legal troubles.

It reimburses you if your eatery encounters employee theft, on-site accident, or customer injury, among other troubles.

A restaurant insurance policy covers the physical structure of your restaurant building in case of vandalism, fire, or storms, along with the contents (equipment, furniture, and food inventory).

In simple words, restaurant coverage protects owners against the following risks:

Why Is Restaurant Insurance Important In New Jersey?

Whether your focus is fine dining or a small coffee shop, no restaurant business is safe from financial risks. Here’s why you should get restaurant insurance today.

Financial Protection

Restaurant insurance offers financial protection against various risks that restaurants face each day.

It helps cover the cost of any damaged property and legal expenses, preventing owners from bearing the financial burden.

Business Continuity

In times of any natural disaster, such as an earthquake, fire, or storm, restaurant insurance ensures business continuity by compensating lost income, ongoing expenses, wages for workers, and temporary relocation costs, if necessary.

This allows owners to recover quickly and resume working without any significant financial loss.

Peace Of Mind

Helping restaurant owners know that their business is safe and there are no financial risks, the insurance provides much-needed peace of mind.

This helps them focus on providing quality services to their customers and growing their business rather than worrying about financial stability.

What Does Restaurant Insurance Cover?

Restaurant insurance covers the number of risks and liabilities that are common in food businesses. The specific coverage provided depends on the needs of the restaurant, but here are some common types of inclusions:

  1. Business Interruption Insurance:  If you can not continue to run your business due to a problem covered by your policy, like a fire or an accident, business interruption insurance helps you replace the lost income and other expenses.
  2. Food Spoilage Coverage: It covers the expense of food you lost in an incident beyond your control. (read: refrigerator equipment failure or power outage).
  3. General Liability Insurance: Termed as the most essential coverage in a restaurant insurance policy, general liability covers you if someone is injured in your restaurant (or gets you sued by saying your food made them sick).
  4. Liquor Liability Coverage: If a drunk customer who was served liquor at your restaurant causes any property damage or gets injured, liquor liability covers it.
  5. Workers Compensation Insurance: It helps cover the cost of medical bills, lost wages, disabilities, and death benefits when any of your employees get sick or injured while performing job-related tasks.
  6. Commercial Auto Insurance: It covers the expenses of an accident involving any delivery trucks owned by your restaurant — and is essential for eateries with online delivery or ordering services.
  7. Cyber Insurance: Restaurants that store customer information are more likely to benefit from this insurance since it helps restaurants recover from cyberattacks and data breaches.

How Much Does Restaurant Insurance Cost?

A restaurant insurance policy may cost you according to the type of facility you own, where the restaurant is located, the amount of coverage you need, and the value of your business property. However, in New Jersey, basic coverage can cost about $175 a month.

Factors Affecting the Cost Of Restaurant Insurance

The cost of restaurant insurance depends on various factors, including the number of employees you have, the value of assets, and your eatery’s location.

Insurance applications ask plenty of questions and still conduct their own research on your restaurant before they quote an insurance price.

That being said, here are 5 factors that can affect the cost of restaurant insurance.

Type Of Restaurant

The type of eatery you own determines the premium you will pay for restaurant insurance.

Generally, restaurants that offer a number of activities like delivery, entertainment, or games have a greater chance of paying a high amount of insurance.

So, the more risk you carry, the higher your insurance premium will be.

For example, a restaurant that sells alcohol is at more risk than one that doesn’t (because the potential of an intoxicated person harming your property increases!).

Similarly, service delivery restaurants get a higher insurance quote because of vehicle-related incidents and other risks.

Value Of Assets

The value of assets simply means how much it will cost to repair or replace the damage.

If the value of your assets is considerably high, then insurance will cost you more.

Because it takes more $ to replace a gold-plated light fixture than a wooden table, right?

The final premium of restaurant insurance is influenced by multiple factors, including furnishings, electronics, kitchen equipment, and vehicles.

Generally, the more valuable the assets, the higher the insurance premiums, as the potential financial risk to the insurer increases.

Number Of Employees

Another factor affecting the cost of restaurant insurance can be the number of employees working full and part-time.

This is because restaurant insurance in NJ covers health insurance, lost wages, and other liabilities.

So, the more employees you have, the more you pay for insurance.

Restaurant’s History

The history of your eatery plays an important role in determining your insurance premiums.

For example, if your restaurant has been sued for customer liabilities in the past, you’re likely to pay a higher premium.

The bottom line?

A few go-to factors stain your eatery’s history, including the number of years you’ve been in business and your loss history — contributing to higher premiums in restaurant insurance.

Location Of Restaurant

The neighborhood in which your restaurant is located also affects your insurance premium.

If a restaurant is situated in a safe and busy area with high foot traffic, it will attract more customers, and your premiums will be higher than those of a restaurant in a more secluded location.

Conclusion

Restaurant insurance is a type of coverage that protects the financial interests of restaurant owners against a number of risks.

These include property damage, equipment breakdown, lawsuits, bodily injury liability, and liquor liability insurance, to name a few.

Put simply, every restaurant owner should consider having restaurant insurance because when you own an eatery, you’re constantly at a high risk of getting sued.

This may cost you a lot in remedies and legal proceedings, damaging your restaurant's bottom line.

Frequently Asked Questions

1. What insurance do I need for my restaurant?
The insurance you need depends on the nature of your eatery. However, most restaurants require general liability insurance since it protects one against third-party claims, property damage, and bodily injury. Some businesses may also require worker’s compensation insurance to safeguard the health, wages, and life quality of their workers.

2. What is a premium in insurance?
The premium in insurance is the amount of money you pay monthly or yearly in order to keep your insurance active. This is determined by various factors, including your restaurant’s location, operational period, history of losses, and number of employees.

3. Does restaurant insurance protect you against fire?
Yes! Since restaurants have kitchens, they’re prone to fire accidents, which may cost a lot in terms of property damage, equipment breakdowns, and workers’ health. Thus, restaurant insurance in NJ protects businesses against fire damage, covering claims and legal fees.