The Hidden Risks of Running a Restaurant or Bar — And How to Protect Your Business

When you’re opening a new restaurant or bar, your mind is probably racing with a million things: hiring the right staff, standing out from the competition, managing your finances, and delivering an incredible experience to your customers.

But one thing that often gets overlooked? Insurance coverage and risk exposure.

What happens if your equipment fails? What if an employee steals from you? How do you stay open during an unexpected disaster?

That’s where we come in.

We help you uncover and understand the risks your food and beverage business might face — and make sure you have the right protection in place. Here’s a breakdown of some common restaurant and bar insurance exposures every owner should be aware of.

Property Insurance Exposures for Restaurants & Bars

🔥 Fire Risk

Kitchen fires are one of the most common and devastating risks in the industry. Protect your space by ensuring:

• Appliances are modern, up-to-date, and regularly serviced.
• Your kitchen is UL300 compliant, meaning:
  • Fire-extinguishing nozzles are installed in the hood, ducts, and above cooking appliances.
  • Automatic and manual fuel shut-off capabilities are available for gas and electric sources.
  • A K-Type wet chemical fire extinguisher is on hand.
• Grease-soiled rags are stored in metal containers to prevent combustion.
• You’re meeting NFPA 96 fire safety standards for commercial kitchens.

💧 Water Damage

Water issues can lead to major disruptions. Stay ahead of problems with:

• Regular inspections for leaks or plumbing issues.
• Annual plumbing maintenance.
• Protection against frozen pipes, especially in colder climates.
• Sewer and drain backup coverage.

⚙️ Equipment Breakdown

POS systems, fridges, HVAC, and kitchen equipment are all critical — and vulnerable.

• Power surges, short circuits, and mechanical failures can shut down your business.
• Surge protection and proper electrical setup (correct amps, up-to-code wiring) are a must.
• Equipment failure leading to food spoilage could be a major financial loss.

Liability Risks in the Food & Beverage Industry

🚶‍♂️ General Liability

Slip and fall accidents are among the most common claims in hospitality.

• Keep stairs well-lit, with sturdy handrails and clear pathways.
• Clean up spills immediately.
• Install non-slip flooring in high-traffic or spill-prone areas.
• Ensure entryways and hallways are properly illuminated.

🍔 Product Liability

Food safety is essential — and a liability risk if not handled properly.

• Ensure proper refrigeration and storage at all times.
• Train staff on safe food handling practices.
• Work with reputable suppliers to reduce contamination risks (salmonella, E. coli, etc.).

🍷 Liquor Liability

Alcohol service brings high liability exposure.

• Overserving or serving underage patrons can result in lawsuits, especially if it leads to a car accident, assault, or injury.
• Train staff to spot signs of intoxication.
• Create a clear policy for cutting off patrons and offer ride services (Uber, cabs).

💻 Cyber Liability

With digital orders and credit card transactions, you’re a potential target.

• High volume of stored customer data = high risk for cyberattacks.
• Ensure cybersecurity protocols are in place to protect your systems and customer info.

Employment & Crime-Related Exposures

👥 Employment Practices Liability

Your employees are the face of your business — and that opens up risk.

• Claims can arise from harassment or discrimination (from patrons, vendors, or internally).
• Make sure management is trained and your policies are clear.

💳 Crime & Theft

Internal theft is more common than you think.

• Staff handling cash, tips, and credit cards can be a liability.
• Bookkeepers or managers may have access to sensitive banking information.
• Put checks and balances in place to help prevent fraud or embezzlement.

Don’t Let Risk Catch You Off Guard

This is just a small sample of the risks you face as a restaurant or bar owner. Every business is unique — and so are your insurance needs.

Let’s talk about how we can protect your hard work.
We’ll help you identify your exposures and build the right insurance plan so you can focus on running your business with peace of mind.