Running a restaurant involves various risks, both to the business itself and its customers. To protect against potential liabilities and unforeseen events, restaurant owners often rely on insurance coverage. Two common types of insurance policies for restaurants are Business Owners Policy (BOP) and General Liability insurance. Below we will highlight differences between BOP or a General Liability policies, to help make informed decisions to safeguard their businesses.
Business Owners Policy (BOP)
A BOP is a comprehensive insurance package designed specifically for small businesses, including restaurants. It combines property and liability insurance into a single policy, providing a simplified solution for managing risks. Key components of a BOP:
- Property coverage: Property insurance protects the physical assets of a restaurant, such as the building, equipment, furniture, and inventory, against perils like fire, theft, vandalism, or wind/hail. It covers the cost of repairs or replacement, ensuring business continuity in the event of insured property damage.
- General Liability coverage: Liability insurance protects the restaurant against third-party claims for bodily injury, property damage, or personal injury. It covers legal expenses, medical costs, and potential settlements or judgments resulting from accidents or incidents that occur on the premises. This coverage is crucial for restaurants, as slip and fall accidents or food-related illnesses can lead to costly lawsuits.
- Business Interruption coverage: Business Interruption provides coverage for lost income and ongoing expenses if a covered loss forces a restaurant to temporarily close. It helps mitigate the financial impact of business interruptions by compensating for lost revenue and assisting with ongoing expenses like rent, utilities, and payroll.
General Liability policy
General Liability is a standalone policy that specifically focuses on protecting businesses against third-party claims for bodily injury, property damage, or personal injury. It covers legal expenses, medical costs, and potential settlements or judgments resulting from accidents or incidents that occur on the premises.
Restaurants that place property insurance coverage separately due to various risk attributes, coverage availability or preference, should consider purchasing a stand-alone General Liability insurance policy.
Reach out to your insurance agent for additional insight and to get a quote for both BOP and General Liability policies.