Business owner’s policy (BOP) for restaurants, bars, and other food businesses

A business owner’s policy is the policy Insureon agents most often recommend for food and beverage businesses. It provides the best defense against common accidents in the food service industry.

A BOP bundles general liability insurance with commercial property insurance at a lower rate than purchasing both policies separately. It can also include coverage for food spoilage, typically anywhere from a $10,000 to $100,000 policy limit.

General liability insurance provides protection in situations where you could be held liable for injury to other individuals or damage to their property. Commercial property insurance protects your business property from damage or loss. A BOP typically covers:

• Damage to your business property
• Customer injuries and property damage
• Advertising injuries, such as slander

Business owners can tailor a BOP to meet their specific needs. In the food service industry, useful add-ons might include liquor liability insurance, business interruption insurance, cyber liability insurance, or other endorsements.

You can also add coverage for risks like cars parked with a valet service, or protect mobile property with inland marine insurance.

Small, low-risk businesses usually qualify for a BOP, including:

• A restaurant that operates out of a small space
• A food truck with minimal risks
• A catering business with only a few employees

Talk to a licensed Insureon agent who specializes in the food service industry to learn more about how a BOP could benefit your business.

A BOP includes commercial property insurance, a policy that protects:

• Inventory, including perishable foods
• Kitchen equipment
• Your building if you own it

Commercial property insurance provides reimbursement if a fire damages your kitchen, even if the fire started in another building. It also covers vandalism, theft, and certain types of weather damage, such as burst pipes and hail damage.

The general liability portion of a business owner’s policy protects against lawsuits related to customer injury or damage to a customer’s property that happened at your business. It provides coverage in situations such as:

• A customer trips on a step and twists an ankle at your restaurant
• A customer claims to have contracted food poisoning from a dish you served
• A barista spills coffee on a customer’s laptop at your coffee shop

If a customer is injured, general liability insurance can help pay for medical expenses. If a customer’s property is damaged, it can pay for its repair or replacement. Finally, if a customer decides to hold you liable for either of the above, general liability insurance can help pay for court costs, attorney’s fees, and other legal expenses.

The general liability portion of a BOP provides coverage against advertising injuries, including:

• Defamation, such as libel (written) and slander (spoken)
• Accusations of copyright infringement

For example, if an employee writes a negative review about a competing restaurant and your business is sued for libel, general liability insurance could help pay the resulting legal fees. Even if you are not found liable, your policy could help cover the cost of having to defend your business in court.

If your bar or other food service business sells alcohol, you may be required to purchase liquor liability insurance, which can be added to a business owner’s policy. It’s a recommended policy addition even if your customers bring their own beer or wine to your business. This coverage protects you in the event of customer injury or property damage caused by someone who consumed too much alcohol at your business.

An unexpected closure for restaurants and other food service businesses could result in devastating financial losses. For example, a restaurant may need to close after a fire until restoration is complete. Business interruption insurance shields against lost revenue and other expenses related to closure caused by a covered property loss. Speak with a licensed agent to discuss adding this coverage to your BOP.

Whether it’s caused by a malfunctioning refrigerator or a power outage, damage to your stored food can be a big blow to your business. Food spoilage coverage can help reimburse the cost of replacing spoiled frozen, refrigerated, or shelved perishables.

Food contaminated by a supplier or by improper handling may also need to be thrown away. Food contamination coverage helps with replacement costs, along with associated costs such as cleaning or advertising to restore your reputation. Food spoilage and contamination coverage can both be added to your commercial property policy or BOP.

A business owner’s policy offers many protections for food and beverage businesses, but it doesn’t cover every risk. Business owners should also consider: 

Workers’ compensation: Workers' comp is required in most states for businesses with employees. It can cover medical expenses and partial lost wages if an employee is injured on the job.

Commercial auto insurance: This policy can cover expenses related to accidents involving your work vehicle. Most states require this coverage for vehicles owned by a business.

Liquor liability insurance: This policy covers risks involved with serving alcohol, such as an intoxicated customer damaging another customer’s property or causing an injury.

Cyber liability insurance: Cyber insurance protects food and beverage businesses against costs resulting from a cyberattack or data breach, including the cost of notifying affected customers.

Are you ready to safeguard your food service business with a business owner’s policy or another type of insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.