In a survey conducted in January and February 2024, we gathered insights from 1,000 restaurant owners across the United States. The survey sought to understand their perspectives on insurance for weather-related damages and the top stressors they face as small business owners.
The results reveal the multifaceted challenges restaurant owners face in protecting their businesses. Here are the key findings:
Forty-eight percent of restaurant owners reported experiencing weather-related damage to their small businesses during the winter months, from November 2023 to the first week of February 2024.
This data underscores the real impact weather events can have on the operations and financial stability of restaurants.
While this may seem like a high percentage in a short timeframe, it aligns with recent national weather trends. The U.S. continues to experience an unprecedented number of weather and climate disasters — tallying $92.9 billion in 2023 — that have affected people’s livelihoods.
When asked if they felt adequately insured for weather-related damages such as snow damage, water damage, fallen trees, flooding and more, 42% of respondents said that they felt very prepared for severe weather compared to 34% that did not feel prepared and 24% that felt somewhat prepared.
A significant number of respondents were uncertain about whether their business insurance covered extreme weather events at all (26%).
This lack of awareness suggests a potential gap in understanding the specific coverage and limitations of their insurance policies.
Additionally, 29% of respondents say they do not have business insurance. Without business insurance to help cover costs, restaurant owners would have to swallow out-of-pocket weather-related damages themselves.
The lack of confidence in insurance coverage and insurance knowledge is a continuing issue for small business owners. In a previous survey, NEXT uncovered that 90% of small business owners — across industries — aren’t confident that they are adequately insured for their business risks.
When asked about their top stressors or business risks, restaurant owners continued citing issues that have affected operations since 2020: inflation and talent shortages (21% and 19%, respectively). Injuries to customers or employees (17%) rounded out the top three challenges.
Moving forward, it’s crucial for restaurant owners to:
Prepare for winter weather before it hits. Investing in preventative measures goes a long way toward bracing for winter and reducing weather-related damages.
Review their insurance policies. Regular coverage review helps protect their changing needs and circumstances. It helps identify any gaps in coverage and allows owners to make adjustments to avoid being underinsured or paying for unnecessary coverage.
Seek clarification on coverages. Carefully read a policy’s terms and conditions, specifically looking for sections that mention coverage for weather events. If unsure, contact your insurance agent or company directly to understand coverage.
Explore additional measures to mitigate risks. This could take many forms, including adding endorsements to your insurance, implementing risk management strategies and conducting regular risk assessments. They can also shift risk by signing indemnification agreements with vendors or outsourcing high-risk tasks to specialized organizations.
By staying informed and adequately protected, restaurant owners can navigate the uncertainties of weather-related damages and focus on running successful and resilient businesses.
Learn more about preparing for winter and reducing your risks.
Our survey results highlight the importance of business insurance coverage for restaurant owners, particularly commercial property insurance, which helps protect your building and its contents from weather-related incidents.
We also recognize that running a restaurant is difficult enough; the last thing you need is to add insurance worries to your plate.
That’s why we only work with small businesses to create customized coverage to fit your unique circumstances. You can get a quote, compare options and receive your certificate of insurance in about 10 minutes.
You can find Kim trying new recipes and cheering the 49ers.
