Restaurant owners need several types of insurance to protect against industry-specific risks like foodborne illness claims, kitchen fires and employee injuries. Below are the essential coverage types with recommended amounts for each.
What Insurance Do You Need For a Restaurant Business?
For full financial protection, restaurant businesses need general liability, workers' comp, commercial property and liquor liability insurance.
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Updated: February 2, 2026
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Restaurant Business Insurance Requirements: Key Takeaways
General liability is the top priority for restaurants due to high claim risk from customer injuries, foodborne illness and property damage. (Read More)
Restaurant insurance requirements commonly mandate workers' compensation, commercial auto and general liability through state law and contracts. (Read More)
Optional restaurant coverage includes business interruption, equipment breakdown and employment practices liability insurance.
Get COIs from your insurer, verify coverage meets requirements, add landlords as additional insured and send proof to required parties. (Read More)
What Insurance Types Are Needed For a Restaurant Business?
Covers third-party claims for customer injuries (slip-and-falls, burns from hot food) and foodborne illness lawsuits. Required by most landlords and municipalities for business licensing. | $1 to $2 million per occurrence or $2 to $3 million aggregate for most restaurants, though high-traffic establishments may need $3 to $5 million. | A customer slipped on a wet floor near the restroom and broke her wrist, resulting in $28,000 in medical bills and $12,000 in lost wages. General liability covered all $40,000 plus $8,000 in legal fees. | |
Required by law in most states once you hire employees. Covers medical costs and lost wages for kitchen staff injuries like burns, cuts, slips or back injuries from lifting. | Minimum coverage is set by your state, with premiums based on payroll and risk classification. | A line cook suffered second-degree burns on both arms from a grease fire, requiring surgery and two months off work. Workers' comp covered $34,000 in medical treatment and $9,000 in lost wages. | |
Covers building damage, kitchen equipment, furniture, inventory and supplies from fires, theft or weather events. Landlords and lenders require this to protect their investment. | Coverage should match full replacement cost of equipment and inventory, ranging from $100,000 to $500,000 depending on restaurant size. | A kitchen fire caused $180,000 in damage to cooking equipment, ventilation systems and dining room smoke damage. Property insurance covered repairs minus a $5,000 deductible, preventing business closure. | |
Protects against lawsuits from over-serving alcohol, including fights on premises or drunk driving accidents involving intoxicated patrons. Often required by liquor license authorities. | $1 million per occurrence is standard, with high-volume bars needing $2 to $3 million. | An intoxicated patron left the restaurant and caused a car accident, resulting in $250,000 in injuries to another driver. Liquor liability covered the settlement and $45,000 in legal defense costs. | |
Covers lost income and ongoing expenses during closures from fires, equipment failures or health department shutdowns. Particularly valuable since restaurants operate on thin profit margins. | Coverage should replace three to six months of revenue, typically $50,000 to $200,000 depending on monthly sales. | A refrigeration failure forced a two-week health department closure, causing $42,000 in lost revenue and $8,000 in spoiled inventory. Business interruption insurance covered both losses during repairs. | |
Equipment Breakdown Insurance | Covers repair or replacement of critical kitchen equipment (refrigerators, ovens, freezers, HVAC) and spoiled food inventory from mechanical failures. Standard property policies often exclude mechanical breakdowns. | $25,000 to $100,000 depending on equipment value, with most restaurants needing $50,000 minimum. | The walk-in freezer compressor failed overnight, spoiling $12,000 in food inventory and requiring $8,500 in emergency repairs. Equipment breakdown insurance reimbursed all $20,500 within days. |
Restaurant Business Insurance Requirements
Restaurant insurance requirements include state-mandated coverage and contractual obligations from landlords, lenders and liquor licensing authorities. Workers' compensation and commercial auto insurance are legally required, while general liability and property coverage are typically mandated by leases and business licenses.
Workers' Compensation Insurance | Required by law in most states once you hire your first employee, with penalties including fines up to $10,000 per employee, criminal charges, business license suspension and personal liability for injury costs. Restaurant kitchens face high injury rates from burns, cuts and slips, making compliance strictly enforced. | Your state sets minimum coverage based on payroll and industry classification, with restaurants classified as high-risk. |
General Liability Insurance | Commercial landlords require this coverage before signing lease agreements, and municipalities often mandate it for restaurant business licenses and health permits. Premium dining locations and high-traffic venues may demand higher limits. | Standard requirement is $1 million per occurrence and $2 million aggregate, though high-value landlords may require $2 to $3 million. |
Commercial Auto Insurance | State law requires commercial auto insurance in 49 states for business-owned vehicles used for delivery, catering or supply transport, and personal auto policies don't satisfy legal requirements. Penalties include fines, vehicle impoundment and personal liability for accidents. | State minimums range from 25/50/10 to 50/100/50 split limits. Delivery-focused restaurants often need $1 million combined single limit. |
Liquor Liability Insurance | State liquor licensing authorities require this coverage before issuing or renewing licenses for restaurants serving alcohol. Dram shop laws in many states impose strict liability for over-service incidents. | Most states require $1 million per occurrence minimum. High-volume bars or nightclub restaurants may need $2 to $3 million. |
Commercial Property Insurance | Landlords mandate this coverage in commercial leases to protect their building investment, and lenders require it for financed properties with the lender named as loss payee. You must maintain coverage for the entire lease or loan term. | Coverage must equal full replacement cost of building, equipment and inventory, ranging from $100,000 to $500,000 based on restaurant size. |
Premium shopping centers, luxury hotels and high-traffic locations require umbrella coverage above base liability limits to protect property owners from catastrophic incidents. Major landlords won't lease to restaurants without this additional protection. | High-value locations require $2 to $5 million total coverage, while luxury venues may mandate $5 to $10 million. | |
How To Ensure Restaurant Business Insurance Requirements Are Met
Restaurant owners must maintain proof of insurance to satisfy landlords, liquor licensing authorities and municipal requirements. Follow these steps to document coverage and stay compliant after purchasing policies.
- 1Request Certificates of Insurance (COI) from your insurance provider
Request Certificates of Insurance from your agent immediately after purchasing coverage, as most providers deliver them via email within minutes to hours. Restaurants need COIs before signing leases, obtaining business licenses, securing liquor permits and partnering with delivery platforms like DoorDash or Uber Eat.
- 2Verify coverage amounts match lease and licensing requirements
Compare each COI against your lease agreement, liquor license requirements and business license to confirm limits meet specified minimums. Your general liability should show $1 million/$2 million coverage, and liquor liability must satisfy state licensing authority minimums.
- 3Add your landlord as "additional insured" on general liability coverage
Commercial leases require adding the property owner as additional insured on your general liability policy, protecting them from claims arising from your restaurant operations. Request this endorsement from your insurer (costs $25 to $100 annually) and get an updated COI showing the landlord's additional insured status.
- 4Submit COIs to landlords, licensing authorities and delivery partners
Provide certificates to your landlord before lease signing, to your state liquor authority when applying for alcohol licenses and to your health department for business permits. Restaurants offering delivery must also submit commercial auto COIs to third-party platforms before activating service.
- 5Set renewal reminders and distribute updated certificates proactively
Set calendar reminders 30 to 60 days before policy renewals to obtain updated COIs, especially if renewals align with liquor license or lease term dates. Send new certificates annually to your landlord, liquor authority, health department and delivery partners to avoid license suspensions or lease violations.
Get Business Insurance You Need For Your Restaurant Business
You can match with insurers specializing in restaurant coverage using the tool below. Compare quotes and evaluate each provider's experience handling restaurant claims, coverage options for liquor liability and equipment breakdown, and understanding of food service operations. Review premiums alongside coverage limits to ensure adequate protection for your operation.
Get Matched To The Best Restaurant Business Insurer For Your Needs
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About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.