What factors impact the cost of restaurant insurance?
5 Things That Impact the Cost of Restaurant Insurance
1. Annual revenue and percentage of alcohol sales
2. Experience running a restaurant
3. Size, location, and hours
4. New venture or existing operation
5. Claims history
Several factors impact the cost of restaurant insurance. Mainly it’s based on revenue. A restaurant that has $5 million in revenue is going to have a lot more customers and a lot more risk of having a claim than a restaurant that’s doing $500,000 with fewer customers in a smaller space.
That’s the number one generator of premium for a restaurant.
There are many other factors. How long has the restaurant been open? If it’s a new venture, what experience does the owners, and the managers have? Have they worked in the industry for 10 years? Do they have any type of formal culinary training?
Any information we can give underwriters about your history and experience helps determine the premium. What is the location? The hours of operation? Is it a family restaurant? Percentage of food to alcohol sales?
If you’ve been open for a couple of years and you’ve had no claims, carriers’ rates will be more competitive. If you have several claims, it’s harder to get a good rate.
I recommend to restaurant owners that insurance is there for the big losses. The losses that will affect the ability to remain in business. If you have a too many losses, it can affect your renewal. If it’s a small claim only slightly above your deductible, it may be better to pay for it yourself to keep premiums down – especially if you end up having a large claim the same year. Two claims in one policy period can affect your renewal.
If you want to make sure your insurance costs reflect your business, give us a call and we would be happy to evaluate your restaurant. Click Here to schedule a meeting directly.