Why do fast food restaurants need business insurance?
Fast food restaurant owners face risks every day, from kitchen fires to accusations of food poisoning. Whether you’re an independent business owner or a franchisee, small business insurance gives you financial protection from kitchen fires, lawsuits, food poisoning claims, data breaches, and other risks.
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With Insureon, fast food restaurants can get insurance coverage the same day they apply for quotes.
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What types of insurance do fast food restaurants need?
Business owner’s policy
This policy bundles commercial property insurance and general liability coverage under one plan. A BOP is often one of the most economical options for fast food restaurant owners.
- Customer bodily injuries
- Business property damage and theft
- Business interruption insurance
Workers’ compensation insurance
Most states require workers' comp for fast food restaurants that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
General liability insurance
This insurance helps pay for common third-party accidents, such as a customer who slips on a wet floor at your restaurant and breaks a wrist. It’s required for most commercial leases.
- Slip-and-fall accidents
- Libel and other advertising injuries
- Product liability insurance
Commercial auto insurance
This policy covers medical bills and property damage in an accident involving your restaurant’s vehicle. It also covers damage to a vehicle caused by weather or vandalism.
- Physical damage and collision coverage
- Injuries caused to another person
- Repairs due to vandalism or weather
Liquor liability insurance
This policy covers legal fees, property damage, and medical costs if alcohol is served or sold at your fast food restaurant to a visibly intoxicated person who then proceeds to harm others.
- Injuries caused by intoxicated patrons
- Property damage caused by intoxicated patrons
- Legal defense costs
Cyber insurance
Cyber liability insurance helps fast food restaurants recover from cyberattacks and data breaches. It's recommended for any business that stores customer information.
- Data breach notification costs
- Fraud monitoring services
- Cyber extortion payments
How much does fast food restaurant insurance cost?
A small fast food restaurant will pay less for commercial insurance than a larger company.
Factors that affect fast food restaurant insurance premiums during underwriting include:
- Services offered, such as food delivery
- Business property and equipment
- Business income
- Business location
- Types of insurance purchased
- Policy limits, deductibles, and exclusions
How do I get fast food restaurant insurance?
It's easy to get fast food restaurant insurance policies if you have your company information on hand. Our application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application.
- Compare insurance quotes and choose policies.
- Pay for your policy and download a certificate.
Insureon's licensed insurance agents work with top-rated U.S. providers to find the right coverage for your fast food restaurant or fine-dining establishment, whether you work independently or hire employees.
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Common questions about fast food restaurant insurance
Review frequently asked questions (FAQs) about insurance for fast food restaurants and more.
If my fast food restaurant is forced to close temporarily, will insurance protect my business?
If your food business is forced to close temporarily due to a covered claim, business interruption insurance, also called business income insurance, can help safeguard your finances. This coverage is often included in your commercial property insurance or BOP.
Business interruption coverage protects you against financial losses if a fire or storm forces your business to close for repairs. This policy can pay for employee wages, rent, lost profits, and other day-to-day operating expenses.
What's more, an extra expense insurance policy can help pay for even more costs from a closure, should you need to rent a new location or lease kitchen equipment until renovations are complete.
Business income coverage is essential for a quick service restaurant (QSR), especially in the event of a kitchen fire, which is costly enough without factoring in lost profits and other expenses.
Are fast food restaurants required to carry product liability insurance?
While typically not required by law, product liability insurance is a key franchise restaurant insurance policy. That's because every business in the supply chain can face a product liability lawsuit, including fast food restaurants, cafes, and food trucks. This coverage is typically included in your general liability insurance.
Product liability insurance covers several types of claims including:
- Allergic reactions
- Foodborne illnesses
- Mistakes on food packaging
If your fast food business serves food that ends up harming a customer, they could sue you for medical expenses or time lost from work. Your product liability policy would pay for the attorney's fees, court costs, settlements, and other legal expenses.
Does fast food restaurant insurance protect against food poisoning and food spoilage?
Maintaining the right types of insurance coverage can help protect your restaurant business against both food poisoning claims and food spoilage losses – but they’re covered by different types of coverage.
Should a customer become sick after eating contaminated food at your franchise location and decides to sue, your general liability policy would step in to help cover legal fees, settlements, and medical costs. This type of policy is essential for fast food restaurants since even a single incident of foodborne illness can lead to significant reputational and financial damage.
Food spoilage, on the other hand, isn't covered under general liability. Instead, it typically requires an endorsement to your business owner's policy (BOP) or commercial property policy. Spoilage coverage can help reimburse you for the cost of food that goes bad due to a covered event, such as a power outage, equipment failure, or refrigeration breakdown.
Without this protection, you could be on the hook for replacing thousands of dollars in inventory. To learn more about how these policies work and what’s covered, check out our full breakdown of food contamination and spoilage coverage.
What type of insurance coverage do fast food stores need for food delivery?
Fast food restaurants that offer delivery services need specialized insurance coverage to protect their business, vehicles, and employees. Two key types of coverage to consider are:
- Commercial auto insurance is essential if your business owns and operates vehicles for deliveries. It covers property damage, medical expenses, and liability claims resulting from accidents involving business-owned vehicles.
- Hired and non-owned auto (HNOA) insurance is important to carry if your employees use their personal vehicles or if your business rents or leases vehicles for deliveries. This coverage provides liability protection in case of an accident involving a non-business owned vehicle.
Having the right protection in place not only keeps your business compliant and financially secure – it also gives you peace of mind. If you're looking for cheap fast food delivery car insurance, Insureon can help you compare affordable policies tailored to your needs.
What additional insurance policies do fast food shops need?
To fully protect your fast food restaurant from several types of risks, you should consider the following QSR insurance solutions:
- Employee dishonesty coverage can be added to a BOP to protect your business from cash register theft and other dishonest acts. Another option is to buy a fidelity bond that'll reimburse your clients for employee theft.
- Equipment breakdown coverage covers costs when a freezer, refrigerator, fryer, or other kitchen equipment suffers a sudden breakdown. It also protects your franchise's computer hardware, electrical systems, production machinery, and other equipment from sudden and accidental malfunctions.
- Electronic data processing (EDP) insurance helps safeguard your business should a computer lose important data due to a fire or power surge. Also known as computer coverage or data processing coverage, EDP insurance can help protect your business income.
- Employment practices liability insurance (EPLI) pays for your legal costs if an employee accuses your business of wrongful termination or another violation of their rights. EPLI can be added as an endorsement to a general liability policy or business owner's policy.
How can I save money on business insurance for fast food restaurants?
There are many steps you can take to get cheap insurance for fast food restaurants.
Start by comparing free business insurance quotes from leading insurance companies through Insureon’s online application. If you're unsure what fast food business insurance policies you need, our licensed insurance agents can help make sure you get the right coverage options for your insurance needs and peace of mind.
Most small businesses can get insured and download a certificate of insurance (COI) within hours of applying for quotes.