Restaurants are not like every other small business. Most restaurant owners want to create a unique and pleasant experience for all of their customers. And if you own a restaurant in Tennessee, you may face more risk than other small businesses.

That’s why it’s important to invest in a comprehensive restaurant insurance program that carefully addresses all of your unique risks.

What Is Restaurant Insurance?

Restaurants can experience a wide variety of incidents and unexpected events that lead to a financial loss. Many of the problems you encounter can be covered with restaurant insurance, allowing you to stay in business even after a devastating loss. 

Restaurant insurance is not a single insurance policy for restaurants owners. It is a package of policies that cover your property risks, your liability risks, and any other unique risks that you are exposed to. 

How Can I Insure a Restaurant in Tennessee?

Most restaurants in Tennessee need a customized package of property, liability, automobile, crime, and other business insurance policies that protect them from financial losses. It’s a good idea to work with an agent and an insurance company who specialize in restaurant insurance. 

What Does Restaurant Insurance Cover in Tennessee?

Commercial property insurance and commercial liability insurance are the basic building blocks of any restaurant insurance program in Tennessee.

Commercial Property Insurance for Tennessee Restaurants

Your commercial property insurance offers protection for your building (if you own it), as well as everything inside of it. If you sustain a property loss after a fire, a tornado, lightning, theft, vandalism, or some other covered event, this policy helps you pay to rebuild, make repairs, and replace destroyed or damaged furniture, kitchen equipment, inventory, dinnerware and cutlery, fixtures, office equipment, menus, computer systems, and even outdoor tables, umbrellas, and lighting. 

Your commercial property protection should also include the following:

Business Interruption Insurance for Tennessee Restaurants

When you have a property loss, it’s likely that you might also have to close down for a while in order to make repairs, rebuild, and restock lost inventory and supplies. In these cases, your business interruption insurance helps replace lost income during the shutdown period. That way you can continue to pay some of your ongoing expenses like rent, employee salaries, utility bills, and more.

Equipment Breakdown Coverage for Tennessee Restaurants

Even when you don’t have a major property loss, the breakdown of a single important piece of equipment could force you to close or significantly limit your operations until it’s repaired. Equipment breakdowns can lead to a serious loss of revenue, and can even cause downstream losses if you lose food inventory due to spoilage or some other type of contamination. 

Obviously you need your ovens, commercial ranges, dishwashers, freezers, and refrigerators to be in good working conditions at all times if you want to continue to serve quality, fresh food. But if something essential breaks down due to a power surge, a user error, or some other covered event, you’ll likely need some help replacing the lost income and paying for repairs.

Equipment breakdown coverage (sometimes called boiler and machinery coverage) protects against costs associated with the sudden and accidental breakdown of machinery and equipment. It pays to repair or replace the equipment as well as any business interruption costs that accompany it. 

Contamination and Spoilage Coverage for Tennessee Restaurants

Contamination and spoilage coverage is part of your commercial property protection. It pays for certain losses if perishable foods or ingredients are spoiled or contaminated due to refrigeration breakdown, utility interruption, or some other type of foreign substance contamination on your premises.

If your local board of health or other agency forced you to close because of food contamination, your contamination and spoilage insurance may cover you for lost income during the shutdown period, as well as costs related to cleaning contaminated equipment, and disposing of and replacing spoiled food. 

Commercial Liability Insurance for Tennessee Restaurants

Liability insurance protects your business when you are considered to be negligent or blamed for causing harm to an individual or another business. This can be in the form of property damage, an injury, an illness, or some kind of reputational harm. 

Commercial general liability (CGL) insurance provides broad protection for third-party bodily injury and property damage claims. It can help you cover the medical bills of injured individuals, repair or replace damaged property, pay for your legal defense if you are sued, and even cover penalties and judgments if you are responsible for a third party’s damages.

If, for example, a server drops a bowl of hot soup onto a customer, causing burns to her hand and ruining her clothes, you could expect to pay for the guest’s related medical bills as well as cleaning or replacing her soiled clothing. If the guest decides to sue you for additional damages due to the trauma caused by the event as well as ongoing pain and suffering, you’d need coverage to help you pay for your legal defense and any financial payouts.

Your general liability insurance would also respond in the event of a foodborne illness that originates in your restaurant. 

General liability insurance also provides coverage for product liability, advertising liability, slander, and libel claims against your restaurant.

What Does Restaurant Insurance Not Cover in Tennessee?

Basic restaurant insurance likely covers a wide variety of problems that can occur in your Tennessee restaurant. But it certainly doesn’t cover everything. Your general liability policy, for example, probably excludes coverage for liquor liability claims, employment liability claims, commercial auto accidents, and much more. 

If you own a restaurant in Tennessee, you’ll probably need to purchase several additional policies or policy endorsements in order to fill any gaps in your coverage. Here are a few policies that can cover a variety of things that are not covered in basic restaurant property and liability coverage. 

• Liquor liability insurance 
• Commercial auto insurance 
• Crime coverage 
• Workers’ compensation insurance 
• Employment practices liability insurance
• Sign coverage 
• Utility interruption coverage 
• Commercial umbrella insurance 

Flood damage is not covered by any of your Tennessee restaurant insurance policies. Flood insurance from the National Flood Insurance Program may be necessary if your restaurant is in an area that is prone to floods. Talk to your independent insurance agent about your need for this type of coverage. 

There may be other policies that you need to cover problems that are not covered by your other restaurant insurance policies. It’s important to work with an agent who understands the restaurant business and can get quotes from multiple carriers who have highly rated restaurant insurance programs.

Can I Afford Restaurant Insurance in Tennessee?

The cost of restaurant insurance in Tennessee depends on the policies you choose, the unique risks your restaurant faces, the value of your inventory and equipment, and other factors like your location, number of employees, and the size of your establishment. 

Serving alcohol, offering valet services, and any other unique exposures that you have and must address will likely add to your insurance costs. 

An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice. 

Do I Need an Agent to Purchase Restaurant Insurance in Tennessee? 

Restaurants in Tennessee need trusted advice from a local insurance expert. That’s why it makes sense to work with an independent insurance agent right in your city. 

Independent insurance agents will get to know you and your business. Then they’ll shop around for insurance companies that specialize in restaurant insurance, and that can provide policies and premiums that fit your coverage needs and your budget.

Local independent agents know all the rules for local businesses, and will help you make sure nothing is left to chance. And they’ll be there for you when you have to file a claim, too, helping you through the process and getting you back on your feet quickly.