5 Insurance Coverage Gaps Most Restaurant Owners Don't Know They Have
Running a restaurant is no small feat. Between managing staff, keeping customers happy, and staying on top of food costs, insurance is usually the last thing on your mind — until something goes wrong.
The truth is, many restaurant owners in New Jersey are operating with coverage gaps that could cost them everything if the wrong claim came through. At RFK Insurance, we've been protecting businesses since 1922, and these are the five gaps we see most often.
1. Liquor Liability Limits That Are Too Low
If you serve alcohol, liquor liability coverage is non-negotiable. But having some coverage isn't enough — many restaurant owners carry limits that are far too low for the real-world risk they face. If an intoxicated guest leaves your establishment and causes an accident, you can be held liable for damages that easily run into the hundreds of thousands of dollars. Make sure your limits reflect the volume of alcohol your restaurant serves.
2. Business Interruption Insurance — or Lack Thereof
What would happen to your restaurant if a kitchen fire forced you to close for two months? Business Interruption Insurance covers your lost income and ongoing expenses — rent, payroll, utilities — while you're getting back on your feet. Without it, a temporary closure can quickly become a permanent one. Many restaurant owners either skip this coverage entirely or carry limits that don't come close to reflecting their actual revenue.
3. Food Spoilage and Equipment Breakdown
A single compressor failure can wipe out thousands of dollars worth of inventory overnight. Many standard commercial property policies don't automatically include food spoilage or equipment breakdown coverage — these often need to be added separately. If your walk-in cooler or commercial kitchen equipment fails, you want to make sure you're covered.
4. Employee Practices Liability (EPLI)
The restaurant industry has one of the highest rates of employment-related claims — from wrongful termination and discrimination to sexual harassment allegations. EPLI coverage protects your business if an employee files a claim against you. With high staff turnover and a demanding work environment, this is a coverage gap no restaurant owner can afford to ignore.
5. Hired and Non-Owned Auto Liability
Do your employees ever use their personal vehicles to make deliveries or pick up supplies? If so, their personal auto insurance likely won't cover an accident that happens during a work-related errand — and neither will your standard commercial policy without a Hired and Non-Owned Auto endorsement. This is a small, inexpensive add-on that closes a significant gap.
Don't Wait Until It's Too Late
The right insurance program won't just protect your restaurant — it'll give you the peace of mind to focus on what you do best. At RFK Insurance, we specialize in helping restaurant owners across New Jersey find and fix the gaps in their coverage before a claim reveals them.
Ready for a free, no-obligation restaurant insurance review?
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Rand, Feuer & Klein LLC & Shore Agency — Protecting New Jerseyans for 4 generations since 1922.