What Are The Three Types Of Liability Insurance?

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Learn more about opening a restaurant with our complete guide.

What would you do if your restaurant was sued for a million dollars?

One million dollars is a lot of money, and it’s certainly not something that most business owners would be able to afford. This is why it’s important to have liability insurance.

But what are the different types of liability insurance? And which one should you get for your restaurant?

Keep reading to find out.

Bodily Injury Insurance

: Bodily injury insurance is a type of liability insurance that covers any medical costs incurred by someone who may have been injured on your property. This includes legal expenses, court costs, and other related expenses. It can also cover the cost of hiring a lawyer to represent you in case of a lawsuit.

Property Damage Insurance: Property damage insurance covers any damages caused by improper maintenance or negligence on your part as a business owner. This means that if someone slips and falls due to an icy sidewalk outside your restaurant, property damage insurance will cover their medical bills and repair costs for the damaged property.

Personal Injury Insurance: Personal injury insurance is similar to bodily injury insurance, but it covers non-physical injuries such as slander, libel, and invasion of privacy. This type of insurance is especially important if your restaurant serves alcohol, as it can help protect you from lawsuits related to over-serving customers who may have then caused an accident or injury.

Conclusion: Liability insurance is an essential part of any business, but it’s particularly important for restaurants because they are in a unique position due to their customer interactions and the food that they serve. Having the right type of liability insurance will ensure that your restaurant has the financial protection needed in case something goes wrong.

References:

1. “What Is Bodily Injury Insurance?” The Balance Small Business, The Balance, 11 July 2019, www.thebalancesmb.com/understanding-bodily-injury-insurance-3160005.

2. “What Is Property Damage Insurance?” CommercialInsurance, www.commercialinsurance.net/what-is-property-damage-insurance/.

3. “Personal Injury Insurance: What Is It & Do I Need It?” Investopedia, Investopedia, 15 March 2021, www.investopedia.com/articles/personal-finance/081914/personal-injury-insurance-what-it-do-i-need.asp.

 

By understanding all the different types of liability insurance, you can make sure that your restaurant is adequately protected from potential lawsuits and costly medical bills. Protect your business today by investing in the right kind of liability insurance for your needs.

 

 

This post has provided a basic overview of the three main types of liability insurance and how they can protect your restaurant from potential lawsuits. Make sure to research all potential policies before making a decision for your business, so that you’re adequately protected in case of an accident or injury. With the right protection, you can ensure that your business remains profitable and successful for years to come. Thanks for reading!

 

References:

1. “What Is Bodily Injury Insurance?” The Balance Small Business, The Balance, 11 July 2019, www.thebalancesmb.com/understanding-bodily-injury-insurance-3160005.

2. “What Is Property Damage Insurance?” CommercialInsurance, www.commercialinsurance.net/what-is-property-damage-insurance/.

3. “Personal Injury Insurance: What Is It & Do I Need It?” Investopedia, Investopedia, 15 March 2021, www.investopedia.com/articles/personal-finance/081914/personal-injury-insurance-what-it-do-i-need.asp.

4. “Choosing Liability Insurance for Your Restaurant.” Entrepreneur, entrepreneur.com/article/249036 . Accessed 7 April 2021.

5. “Liability Insurance for Your Restaurant.” Insureon, insureon.com/liability-insurance-for-restaurants/. Accessed 7 April 2021.

6. “Restaurant Liability Insurance: What You Need To Know.” The Hartford, www.thehartford.com/business-insurance/industry/restaurant-liability-insurance . Accessed 7 April 2021.

7. “What Is General Liability Coverage?” Allstate, www.allstate.com/tr/business-insurance/general-liability-coverage . Accessed 7 April 2021.

8. “Explaining Commercial General Liability (CGL) Insurance

 

 

Related FAQs

General liability insurance is a type of business insurance policy that protects businesses from claims due to bodily injury, property damage, and personal or advertising injury caused by their products, services, or operations. General liability policies provide coverage for medical bills, legal fees, settlements, and judgments in the event of an accident or lawsuit involving your business.  
The cost of restaurant liability insurance depends on several factors such as the size and scope of your restaurant’s operations, the amount of coverage you need, and any additional riders or endorsements you may add. Generally speaking, restaurant liability insurance can range anywhere from $500 to $2,000 per year.  
General liability insurance, also known as commercial general liability (CGL), covers claims of bodily injury or property damage caused by your products, services, or operations. Professional liability insurance, sometimes referred to as Errors & Omissions (E&O) insurance, covers claims related to negligence, errors, or omissions in the performance of your professional services.  
Yes. Even if your business is incorporated, you will still need restaurant liability insurance to cover potential losses related to bodily injury and property damage that may occur on your premises.  
Yes, you can purchase restaurant liability insurance online from various insurers including The Hartford and Allstate. You can compare different policies to find the best coverage for your needs.  
Personal injury insurance is not required but it may provide additional protection if someone is injured on your premises or as a result of your products or services. It covers medical bills and lost wages due to an accident related to your business operations.  
Restaurants that offer delivery services or have a fleet of vehicles will need commercial auto insurance to cover any losses related to accidents or incidents involving those vehicles.  
Restaurant liability insurance typically covers claims related to bodily injury, property damage, and personal or advertising injury caused by your products, services, or operations. It may also include coverage for medical bills, legal fees, settlements, and judgments in the event of an accident or lawsuit involving your business.  
Yes. You may want to consider adding a product recall endorsement to your policy if you serve canned or packaged food items in your restaurant. Additionally, you should make sure to purchase enough coverage for your business assets, such as kitchen equipment and furniture.  
A deductible is the amount of money you will be responsible for paying out-of-pocket before your insurance policy kicks in and begins covering the remainder of the cost. For example, if your policy has a $1,000 deductible and you suffer a loss of $5,000, you would need to pay the first $1,000 before your insurance company begins covering the remaining $4,000.      

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