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Common Insurance Risks for Restaurants

Some restaurant owners looking to cut costs often do so by reducing insurance expenses. In the short term, having that extra cash seems like a benefit, but what would you do if a fire happened in the kitchen or a customer got injured on your property?

The lawsuits that typically follow can consume almost all your assets. As a result, you either need to lay off staff or close down permanently. So you don’t find yourself in this situation, consider common risks for restaurants.


Several cooking devices and situations in your kitchen could quickly generate flames, including:

  • Oil and grease vapors
  • Grills
  • Deep fat fryers

For safety, such devices should have a fuel shut-off function, and handheld fire extinguishers should be clearly marked and easily accessible within the kitchen. Otherwise, a fire could soon consume the room, injure your workers and customers and spread through the entire building or neighboring businesses.


From your cash register to bottles of alcohol and furniture placed around your dining area, there are several items inside your restaurant that are at risk of theft. Many criminals see these establishments as easy targets. To reduce your risks, it’s recommended you set up cameras in and around your restaurant, make off-schedule cash drops into a safe and take regular stock of your inventory for missing items and supplies.


From slippery floors to a sidewalk one of your employees forgot to clean, your restaurant also comes with an abundance of slip and fall and other injury risks. To anticipate them, implement plans to regularly check and clean up your facility. Also have procedures in the kitchen for cooking food and preventing bacteria from spreading.

Your customers aren’t your only risk. According to the National Floor Safety Institute, three million food service employees slip or fall on the job yearly, with the average claim amounting to $21,000. So your staff remains safe, be sure to require proper footwear, set up floor mats, clean up any spills and have a first aid kit easily accessible and stocked. Additionally, provide adequate training on everything from blood-borne pathogens to fire safety procedures, so your workers know what to do in an emergency.

Food Storage

How you store your restaurant’s food could be the difference between customers having a pleasant dining experience or one that causes them to file a lawsuit. More commonly, one or more customers could get food poisoning or have an allergic reaction. In response, keep your food stored in the refrigerator at the proper temperature and make sure certain ingredients – in particular, nuts – don’t come in direct contact with other food items or surfaces.

In a worst-case scenario, lax food storage may lead to norovirus, which affects about 20 million people each year. In a restaurant environment, it’s typically spread through hard surfaces, produce that has been improperly washed or uncooked food. An outbreak can not only lead to a lawsuit, but could taint your image permanently.


Do you know if the person you’re serving is at least 21 years old? Offering a beer or glass of wine to someone underage or neglecting to cut off an intoxicated individual can cost your business. In the case a customer gets in a drunk-driving accident or behaves in a disorderly manner in public, you could be held partially responsible. In addition, be sure to fully comply with your state’s alcohol serving requirements, otherwise you could be paying fines for a seemingly minor incident.

Identity Theft

Does your restaurant take card payments or use computer-based payment, point of sale (POS) and inventory management systems? If so, your risks of identity theft greatly increase – both from outside parties accessing your digital records and employees stealing customer information. However, that’s not all you have to worry about. Restaurants further handle a large amount of paper documents, from applications and pay stubs to order forms. Should that get into the wrong hands, personal information could become compromised and exploited.

As you anticipate these common risks, work with an agent at Ion Insurance to make sure you’re properly covered for each of these instances. To discuss or expand upon your existing policies, give us a call at 800.801.8013.