Kitchen fires are one of the most devastating events a restaurant can face. Beyond the immediate danger to staff and customers, a fire can trigger multiple insurance claims across different policies. Understanding how general liability and property insurance work together during a fire claim helps you prepare for the worst and ensures you're properly covered.
At Anchor Insurance, we help restaurant owners structure their coverage so that when disaster strikes, they know exactly which policy responds to which loss.
The Dual Nature of Fire Claims
A kitchen fire creates two distinct categories of loss that are handled by different insurance policies:
- First-party losses (your property): Damage to your building, equipment, inventory, and income loss - covered by commercial property insurance
- Third-party losses (others' property and injuries): Damage to neighboring businesses, injuries to customers or bystanders - covered by general liability insurance
When General Liability Responds to Fire Claims
Your general liability insurance covers claims from third parties affected by a fire at your restaurant:
- Customer injuries from burns, smoke inhalation, or evacuation accidents
- Damage to neighboring storefronts from smoke or fire spread
- Property damage to customer belongings (coats, bags, electronics)
- Medical payments for minor injuries regardless of fault
Real-World Scenario
A grease fire in your kitchen sends smoke through the ventilation system into the adjacent retail store, damaging their inventory. Three customers sustain minor burns during evacuation. General liability covers the neighbor's damaged inventory claim and the customers' medical expenses.
When Property Insurance Responds
Your commercial property insurance covers your own losses:
- Damage to kitchen equipment, fixtures, and furniture
- Structural damage to the building (if you own it) or tenant improvements
- Spoiled food inventory from smoke damage or power loss
- Business interruption - lost income while closed for repairs
- Extra expense coverage for temporary relocation costs
Common Fire Claim Scenarios in Restaurants
1. Grease Fire with Suppression System Activation
What happens: A flare-up triggers your Ansul system, coating the kitchen in fire suppressant. The fire is contained, but equipment is damaged and the kitchen needs deep cleaning.
- Property covers: Equipment damage, cleaning costs, food spoilage, business interruption
- GL covers: Any customer injuries during evacuation, damage to personal property
2. Fire Spreads to Adjacent Business
What happens: A kitchen fire breaches the wall and damages the neighboring business. Their landlord and business sue you.
- Property covers: Your own damage and lost income
- GL covers: The neighbor's property damage claim and their business interruption (if you're found liable)
3. Customer Injury During Fire
What happens: A customer trips and breaks their wrist while evacuating during a kitchen fire.
- GL covers: Medical expenses, potential lawsuit, legal defense
Gaps to Watch For
Common coverage gaps in fire-related claims include:
- Ordinance or law coverage: If fire damage triggers building code upgrades, standard property policies may not cover the increased cost
- Business interruption waiting period: Most policies have a 24-72 hour waiting period before BI coverage kicks in
- Dependent business interruption: If fire at a neighboring business forces you to close, you may not be covered without specific endorsement
- Intentional acts: Neither GL nor property covers fires intentionally set by the insured
How to Prepare for Fire Claims
- 1.Review your fire suppression system: Ensure your Ansul system is inspected and certified - carriers may deny claims if maintenance lapsed
- 2.Document your property: Keep updated inventory lists, photos of equipment, and receipts for major purchases
- 3.Know your policy limits: Ensure both GL and property limits are adequate for your location and operations
- 4.Understand your business interruption coverage: Know your waiting period, coverage duration, and any sublimits
Frequently Asked Questions
Does general liability cover my own fire damage?
No. General liability only covers third-party claims - damage to others' property or injuries to non-employees. Your own property damage is covered by commercial property insurance.
What if the fire was caused by my employee's negligence?
Both GL and property policies typically cover fires caused by employee negligence, as long as the fire wasn't intentionally set. However, patterns of negligence (like repeated safety violations) could affect your coverage or future insurability.
How long does business interruption coverage last?
Most policies cover lost income for the time it takes to repair and resume operations, up to a policy limit (often 12 months). Some policies also include 'extended period of indemnity' to cover the ramp-up period after reopening.