Restaurant Insurance Ontario

Learn about your restaurant insurance options. The hospitality industry in Ontario can be unforgiving, and it’s a constant challenge for restaurant owners to deliver exceptional food and service while maintaining profitability.

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Those who run restaurants in Ontario are often some of the most passionate business owners, investing time and money to deliver a high-quality experience to their guests.

What kind of insurance do restaurants need?

These challenges are magnified when you consider that risks related to property damage, equipment breakdowns, crime and liquor liability must also be addressed. Our restaurant insurance brokers compiled this list and provide an overview of the Ontario restaurant industry risks and more—helping you identify potential blind spots in your risk management and restaurant insurance programs.

  • Property Insurance
  • Equipment Breakdown Insurance
  • Crime Insurance
  • Inland Marine Insurance
  • Commercial General Liability Insurance
  • Food and Product Liability Insurance
  • Liquor Liability Insurance
  • Business Interruption Insurance
  • Cyber Insurance
  • Commercial Automobile Insurance

Property Insurance for Restaurants

Property exposures in restaurants are substantial and can come from many sources, including equipment failures, food spoilage, natural disasters, customers, employees and other third parties.

When discussing property exposures for restaurants, fire and water damage are of particular concern, and restaurants face an elevated level of risk due to things like open flames, the wide use of combustible items (e.g., tables, chairs and linens), complex HVAC systems, sewer backups and appliances connected to water lines (e.g., dishwashers).

Solution: Property Insurance

Equipment Breakdown Insurance for Restaurants

Restaurants depend on functioning equipment to service their guests effectively.

In the face of an equipment breakdown (e.g., refrigeration unit leaks and cooking appliance malfunctions), restaurants can experience business interruptions or even prolonged closures.

Equipment breakdowns can even lead to major property damage should an appliance leak or start a fire, compounding the cost for your restaurant.

Crime Insurance for Restaurants

Crime can be a challenge for restaurant owners, especially because their operations often have a steady amount of cash flowing in and out.

To make matters worse, thieves can strike at any time, leaving owners to recoup any lost funds or equipment.

In this day and age, thieves (including your employees) do not need direct access to cash to steal from you—merchandise, supplies and securities are all fair game. The location of your restaurant as well as its hours of operation can have a significant impact on its level of crime risk.

Solution: Crime Insurance

Inland Marine Insurance for Restaurants

As a restaurant owner, you are responsible for property that may not be covered by traditional insurance. Inland marine coverage can fill these gaps in commercial property protection.

Without an inland marine policy, property that’s unique or valuable, in transit, in your temporary care, stored at fixed (but movable) locations or used to transfer information represent major exposures. Specifically for restaurateurs, inland marine insurance can provide much needed protection for accounts receivable, computer equipment, data and records, food transported to various locations and food trucks.

Other Restaurant Insurance Options

Premises liability exposures at restaurants can directly affect patron safety and, when injuries occur at your business, you could be held responsible. Accidents related to slips, trips and falls; burns and scalds; and cuts are common and a major source of concern. Something as simple as a hot plate, a spilled drink or an uneven surface can lead to costly insurance claims following an accident.

Food safety is an important consideration for restaurant owners and a primary source of food and product liability.

The potential for food poisoning, contamination, spoilage and allergic reactions is ever present, making continued customer safety a challenge. In the event that one of your customers becomes ill due to your food or accidentally ingests a foreign object found in one of your menu items, your restaurant could face legal ramifications and suffer irreversible reputational damage.

Lawsuits related to liquor liability are filed each day, and it’s increasingly common for victims and their families to file suits against restaurants for their role in serving a customer who is then involved in an alcohol-related accident.

All it takes is a single liquor liability claim to put your entire business at risk.

Liquor liability exposures for restaurant owners can stem from selling liquor to underage individuals, over-serving patrons and non-compliance with applicable legislation.

Continuity is critical in business, and there are few things more important than continuous revenue and cash flow, particularly for small to medium-sized organizations. In fact, just one brief business interruption can be incredibly costly for an organization, often leading to serious reputational damages or long-term closures. Common interruptions for restaurants can include natural disasters, fires, food recalls, cyber events, staff shortages and supplier issues.

Restaurants are a common target for cyber criminals, as they often process a high volume of credit and debit card information. In addition, employees who are improperly trained on computer and data safety could put your organization at risk to ransomware, viruses, phishing scams and malware.

Solution: Cyber Insurance

Compounding your exposures, many restaurants offer guest Wi-Fi that, if improperly secured, can put you and your guests at risk of an attack.

Depending on the services your restaurant offers, employees may be required to operate a vehicle on behalf of your business, creating automobile exposures in the process.

While important for daily operations, the improper use of a vehicle can lead to potential accidents and major insurance claims. What’s more, if you allow employees to use their own vehicles for work, standard auto policies are often not enough.

Providing valet parking can also create unforeseen challenges should a customer’s vehicle get damaged.

Solution: Commercial Auto Insurance

Work With Experienced Restaurant Insurance Brokers

While the proper risk management practices can reduce certain exposures, no system is 100 per cent effective in ensuring an accident-free workplace. As a result, it’s all the more crucial to work with a qualified restaurant insurance broker to not only assess you exposures, but secure the appropriate coverage as well.

Free Download: Restaurant Employee Safety Manual (Click to download)

Frequently Asked Questions

  1. What is restaurant insurance?
    Restaurant insurance provides protection for your equipment, inventory, building, and lost income in the event of a claim. Coverage for potential lawsuits arising from incidents such as slip and falls, over-serving of alcohol and food poisoning is also typically included in the Liability section of the policy. 

  1. What kind of insurance do restaurants need?
    At a minimum, Restaurants should be covered for Commercial General Liability and also Liquor Liability if they are serving alcohol.  Building, contents, equipment, and stock/inventory coverage can be added, and are recommended, so you can get back to regular operations as quickly as possible after a claim. If you are closed for a period of time due to a claim and need to rebuild, Business Interruption coverage can cover your ongoing expenses and loss of profits during this time. If collecting any clientele information such as personal details for reservations, credit card numbers or if you have a website and social media presence, we strongly recommend Cyber Insurance as many of the types of claims that occur online or through your network are not covered on a typical Restaurant Policy. 

  1. How much does restaurant insurance cost?
    There are many factors that go into the pricing of restaurant insurance. It is best to discuss your particular situation with one of our brokers who can help provide advice and search for the most competitive pricing available. Liability premium for restaurants is calculated primarily on revenues. Higher premium rates for alcohol sales and lower rates for food. Insurance companies have trouble insuring restaurants that have a high amount of liquor receipts and we typically have to place them with a specialty insurer which can result in higher premiums. The exception are high-end restaurants where wine and spirits prices are higher than the average restaurant, these can sometimes be placed with a regular insurance company and pricing is not as high. 

  1. How does restaurant insurance work?
    An Insurance policy is issued based on the information given to your broker. If you have a claim, simply contact your insurance broker and they will notify the company on your behalf, you will then be contacted by a claims adjuster to settle your loss.


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