Food liability insurance: What it is, what it costs, what it covers

Food liability insurance: What it is, what it costs, what it covers

Meg Furey-Marquess
By Meg Furey-Marquess
Nov 7, 2023
1 min read

If you’re running a business that serves food or drinks to the public, you need food liability insurance to help protect you, your business, your employees and your customers.

Whether you run a restaurant, bakery or coffee shop, or you’re a caterer or a personal chef, as a food service business, you face unique food-related hazards that require protection.

Jump ahead to learn:

What is food liability insurance?

Food liability insurance is the umbrella term for food and hospitality-specific add-ons to a business insurance policy (often called riders or insurance endorsements) that you can add to your general liability insurance.

General liability coverage is often the first policy food and beverage business owners purchase because of its wide range of coverage. It can help protect your business from common mishaps like slip and fall injuries, damage to other people’s property, legal fees and defense costs, advertising injury and more.

Serving food and drinks has another unique challenge: Liquor liability.

Liquor liability insurance can help protect you and your business from the risks that come with serving alcohol. (Not to brag, but NEXT has some award-winning liquor liability insurance on tap.)

In most states, if you sell alcohol to someone and they later cause injury or damage because they were intoxicated, your business could be held liable — and general liability usually won’t cover it. You and your business may be held financially responsible.

What does food liability insurance cost?

Every food service business has unique food liability insurance needs. Some general guidelines for pricing include:

  • Type of business. Coverage for a one-person caterer will probably be less than for someone running a full-service restaurant.
  • Location. Businesses in big cities or busy neighborhoods generally have higher premiums than those in more quiet locations.
  • Number of employees. A big team means you could pay more for insurance. Depending on where you live, workers’ compensation insurance could be required in your state.
  • Your experience. If you’ve just written your first restaurant business plan versus you’re an industry veteran with decades of experience, you could pay more for insurance.
  • Your claims history. If you’ve filed multiple insurance claims, you may have higher premiums than an established business with a history of few claims.

The cost of food liability insurance is based on what you need. Caterers who regularly drive to gigs may need to add commercial auto insurance to their food liability insurance policy. Businesses that serve alcohol will probably want to include liquor liability insurance.

The best way to know your exact cost for food liability insurance is to get a quote tailor-made for your business. An insurance company quote with NEXT is free and only takes about 10 minutes.

What’s covered by food liability insurance?

The real question is, “What do you want your food liability insurance to cover?” Because insurance providers like NEXT can offer protection from the most common hazards to your restaurant or food and beverage business.

For example, a general liability policy included with food liability can help protect your business from a customer or third-party slip and fall injury, damages to other people’s property, legal fees and defense costs, advertising injury and more.

Whether you have one van, two food trucks or a whole fleet of delivery vehicles, you’ll want to include commercial auto insurance to help protect both your drivers and vehicles during work hours.

If you have employees, most states require a business to carry workers’ compensation insurance. Workers’ comp helps protect your employees from workplace injuries and illness. It can help cover medical expenses, lost wages, permanent bodily injury, employers liability and more.

Commercial property insurance can protect your goods and gear, inventory, the building you work out of, equipment breakdowns and some business income interruptions. So, should the worst come to pass, and you have to close your doors for a stretch, your policy could provide financial support.

Many food businesses opt for a business owner’s policy or BOP. A BOP combines general liability and commercial property insurance into one package that is usually less expensive than buying the coverage separately.

Does your food and beverage business need food liability insurance?

Legally, some policies that make up food liability insurance are non-negotiable. If you have employees, most states require you to carry workers’ compensation insurance. Likewise, if you have company vehicles, most states require you to have commercial auto coverage.

Beyond what’s legally required, restaurants and other food businesses generally have expensive kitchen equipment like pizza ovens, mixers or espresso machines essential for running a business.

Food and drink also carry the risk of contamination, food poisoning and spoilage. Most states require employees in food service to obtain a food handlers license or a food manager license to serve safely. Restaurant insurance can help protect your business if a mishap falls through the cracks.

How NEXT’s food liability insurance can help your small business

NEXT makes it fast and easy to get the right insurance for your food business, including restaurantscaterersbakeries, and cafes/coffee shops.

Our general liabilitycommercial propertyBOP,  workers’ compensation and commercial auto insurance coverage can help protect your food business from a variety of risks, including:

  • Foodborne illness
  • Equipment malfunction
  • Property damage
  • Injuries to non-employees
  • Workplace accidents
  • Temporary business closures
  • Auto accidents

You only pay for the coverage you need, and you can see your policy options in less than 10 minutes. A certificate of insurance, along with 24/7 access to your policy, is available as soon as you make a payment.

Get a free instant insurance quote with NEXT.

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Meg Furey-Marquess
About the author

Meg Furey-Marquess is an experienced writer from Austin, Texas. With a special interest in both small business and personal finance, she believes that big ideas often start small. With a knack for narrative and a relentlessly curious nature, her goal is to amplify the “little guys.”

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