Running a restaurant means managing countless risks every day—from customers walking through your doors to vendors making deliveries. General liability insurance serves as your first line of defense against third-party claims that could otherwise devastate your business financially. Understanding what this coverage costs and what it protects helps you make informed decisions about protecting your restaurant.
What General Liability Insurance Covers for Restaurants
General liability insurance protects your restaurant against third-party claims for bodily injury, property damage, and personal or advertising injury. This coverage applies to incidents that occur on your premises or as a result of your business operations.
For restaurants specifically, GL insurance typically covers situations like a customer slipping on a wet floor, a server accidentally spilling hot coffee on a guest, or damage to a customer's property while dining. It also covers legal defense costs if someone sues your restaurant, regardless of whether the claim has merit.
It's important to understand what general liability does not cover. GL insurance excludes employee injuries (covered by workers' compensation), damage to your own property (covered by commercial property insurance), foodborne illness claims (often requiring product liability coverage), and professional mistakes. Many restaurant owners bundle GL with other coverages in a Business Owner's Policy (BOP) for more comprehensive protection.
Standard Limits for Restaurant General Liability Insurance
The industry standard for restaurant general liability insurance is a $1 million per-occurrence limit with a $2 million aggregate limit. The per-occurrence limit is the maximum your insurer will pay for a single claim, while the aggregate is the total amount available for all claims during your policy period.
For most small to mid-sized restaurants, the $1M/$2M limit structure provides adequate protection. However, certain situations may require higher limits. If your restaurant hosts large events, serves alcohol, or operates in a high-traffic location, consider increasing your limits to $2M/$4M.
Landlords and licensing authorities often have specific insurance requirements. Many commercial leases require tenants to carry at least $1 million in general liability coverage and name the landlord as an additional insured. Review your lease agreement and local regulations before purchasing coverage to ensure you meet all requirements.
- $1M per occurrence / $2M aggregate: Standard for most restaurants
- $2M per occurrence / $4M aggregate: Recommended for high-volume or event venues
- $300,000 to $500,000: Minimum for smaller, low-risk operations (may not satisfy lease requirements)
How Much Does Restaurant General Liability Insurance Cost?
General liability insurance for restaurants typically costs between $400 and $1,800 per year for standard $1M/$2M limits. Most restaurant owners pay between $600 and $1,200 annually, with the exact premium depending on several factors specific to your operation.
Your restaurant's size, location, and annual revenue directly impact your premium. A small café with 20 seats will pay significantly less than a 200-seat full-service restaurant. High-traffic urban locations generally cost more to insure than suburban establishments due to increased exposure to claims.
Other factors affecting your cost include your claims history, years in business, and specific operations. Restaurants that serve alcohol, offer delivery services, or host live entertainment typically pay higher premiums due to increased liability exposure. New restaurants without an established track record may also face higher initial rates.
- Small café or counter-service: $400–$700/year
- Mid-sized casual dining: $700–$1,200/year
- Large full-service restaurant: $1,200–$1,800/year
- Fine dining or high-volume venues: $1,500–$2,500+/year
Real-World General Liability Claims in Restaurants
Understanding how general liability insurance works in practice helps illustrate its value. These examples represent common claims that restaurant owners face and how GL coverage responds.
Slip-and-fall incidents remain the most frequent GL claims for restaurants. When a customer falls on a wet floor or uneven surface, medical bills and legal fees can quickly escalate into five or six figures. General liability coverage pays for the injured party's medical expenses and your legal defense if they decide to sue.
Property damage claims also occur regularly in restaurant settings. A server might accidentally knock a customer's laptop off a table, or a busser could damage a guest's expensive handbag. While these incidents may seem minor, replacement costs for high-end electronics or designer items add up quickly.
Common Claim Examples
- Slip and fall ($25,000–$75,000): A customer slips on a freshly mopped floor near the restroom, breaking their wrist and requiring surgery. General liability pays for medical expenses, lost wages, and legal defense costs if the customer sues.
- Property damage ($1,500–$3,000): A server accidentally spills a tray of drinks onto a customer's laptop, destroying the device. GL property damage coverage reimburses the customer for the replacement cost.
- Child injury ($15,000–$50,000): A child trips over an extension cord running to a temporary display, resulting in a head injury. Medical payments coverage handles immediate expenses; bodily injury coverage applies if the family pursues legal action.
- Advertising injury ($10,000–$40,000 in legal fees): A competitor claims your restaurant's advertising falsely disparaged their business, filing a defamation lawsuit. Personal and advertising injury coverage pays for legal defense and any settlement.
How to Avoid Coverage Gaps in Your Restaurant Insurance
Many restaurant owners unknowingly leave their business exposed by assuming general liability covers all their risks. To avoid costly gaps, start by understanding exactly what your GL policy includes and excludes.
First, review your policy's exclusions carefully. Most GL policies exclude liquor liability, which requires a separate policy if you serve alcohol. Food contamination and spoilage claims may also be excluded or limited, requiring additional product liability coverage. If you own your building or have significant equipment, you'll need separate property coverage.
Work with an insurance advisor who understands the restaurant industry. They can identify exposures specific to your operation—such as delivery services, catering, food trucks, or special events—and recommend appropriate coverage. Annual policy reviews ensure your coverage keeps pace as your business grows or changes.
Finally, implement risk management practices that reduce your likelihood of claims. Regular safety inspections, documented cleaning schedules, proper employee training, and clear incident reporting procedures all demonstrate to insurers that you take risk seriously—potentially lowering your premiums while protecting your business.
- Review policy exclusions and understand what's not covered
- Consider liquor liability if you serve alcohol
- Add product liability for foodborne illness protection
- Bundle coverages in a BOP for potential savings
- Schedule annual policy reviews as your business evolves
Get Your Restaurant GL Quote
Protecting your restaurant with the right general liability coverage doesn't have to be complicated or expensive. At Anchor Insurance, we specialize in helping restaurant owners find coverage that fits their specific operation and budget. Get a personalized quote in minutes and see how affordable proper protection can be for your restaurant.