Restaurant Insurance Ontario

Quick Answer: Most Ontario restaurants should consider coverage for liability, property, business interruption, equipment breakdown, food spoilage, and other risks specific to their operation. Restaurants serving alcohol, making deliveries, catering, or using specialized cooking equipment may need additional protection.

What Is Restaurant Insurance?

Restaurant insurance is a type of commercial insurance designed around the risks of operating a food service business.

It is not necessarily one single insurance product. Instead, your restaurant insurance policy may combine several types of protection.

• Commercial general liability
• Commercial property insurance
• Business interruption insurance
• Equipment breakdown coverage
• Food spoilage coverage
• Product liability
• Liquor liability
• Crime coverage
• Cyber insurance
• Commercial automobile insurance

The coverage you need depends heavily on your operation.

A coffee shop that closes at 4 p.m. and does not serve alcohol has a very different risk profile from a downtown restaurant with commercial fryers, 150 seats, a patio, alcohol service, delivery drivers, and late-night hours.

Your insurance should reflect those differences.

What Insurance Does an Ontario Restaurant Need?

There is no universal restaurant insurance package that is right for every Ontario restaurant. However, several types of coverage should usually be part of the conversation with your commercial insurance broker.

Commercial General Liability Insurance

Commercial general liability insurance, commonly called CGL insurance, can protect your business against certain claims involving bodily injury or property damage to third parties.

For a restaurant, this could include situations such as:

• A customer slipping on a wet floor
• A customer being burned by hot food or a beverage
• Damage accidentally caused to someone else’s property
• Certain claims involving food sold or served by your restaurant

Commercial landlords, lenders, franchisors, event venues, and other organizations may also require your restaurant to carry a specific amount of liability insurance.

Rather than assuming a particular limit is appropriate, review your lease and other contracts with your insurance broker.

Commercial Property Insurance

Think about how much it would cost to replace everything inside your restaurant.

• Ovens and cooking equipment
• Refrigerators and freezers
• Tables and chairs
• Point-of-sale equipment
• Smallwares
• Food and beverage inventory
• Décor and signage
• Computers and electronics
• Leasehold improvements

Commercial property insurance can help protect insured property following covered events such as fire, theft, or certain types of water damage.

One mistake restaurant owners can make is using an old estimate for their contents or improvements year after year.

If you have renovated your dining room, replaced kitchen equipment, expanded your operation, or made significant improvements to a leased space, make sure your broker knows.

Equipment Breakdown Insurance

Restaurants depend heavily on equipment.

Imagine discovering on a Friday morning that a critical refrigeration system has failed. You may suddenly have repairs to make, inventory at risk, and potentially an interruption to your business.

Equipment breakdown coverage can provide protection for certain sudden and accidental mechanical or electrical breakdowns, depending on the policy.

This can be particularly important for refrigeration systems, boilers, HVAC systems, electrical systems, and other equipment your restaurant depends on every day.

Food Spoilage Coverage

The food sitting in your coolers and freezers can represent thousands of dollars in inventory.

A refrigeration breakdown or another insured event could turn that inventory into a complete loss.

Restaurant owners should ask whether their policy includes spoilage coverage, what events trigger it, how much coverage is provided, and whether a deductible or sub-limit applies.

Do not assume all of your food inventory is automatically protected under every circumstance.

Business Interruption Insurance

A fire does not only damage your kitchen. It can stop your revenue.

Commercial property insurance can help repair insured physical damage, while business interruption insurance can help with certain lost income and continuing expenses when your restaurant is unable to operate because of an insured loss.

Restaurant owners should consider how long it could realistically take to:

• Repair significant fire or property damage
• Replace specialized kitchen equipment
• Complete inspections
• Obtain permits
• Repair or rebuild leased space
• Retain or rehire employees
• Reopen the restaurant
• Return revenue to normal levels

Business interruption coverage should be reviewed based on your actual financial situation and expected recovery timeline rather than simply choosing the lowest available amount.

Liquor Liability

If alcohol is part of your business, it creates another important liability exposure.

Claims can become complicated when an intoxicated customer leaves an establishment and subsequently causes injury or property damage.

Restaurants serving alcohol should discuss their operations carefully with their broker, including:

• Percentage of revenue from alcohol
• Hours alcohol is served
• Patio operations
• Entertainment or dancing
• Security procedures
• Age verification
• Staff alcohol-service training
• Procedures for intoxicated customers

How Much Does Restaurant Insurance Cost in Ontario?

There is no reliable single price for restaurant insurance in Ontario.

You may find websites advertising starting prices or average premiums, but restaurant risks can vary significantly. Even two restaurants located on the same street could pay very different premiums.

Insurance companies may consider factors such as:

• Annual restaurant revenue
• Type of restaurant
• Location
• Building construction and age
• Square footage
• Seating capacity
• Hours of operation
• Years in business
• Owner and management experience
• Previous insurance claims
• Cooking methods
• Deep fryers and open flames
• Fire suppression systems
• Alcohol sales
• Percentage of revenue from alcohol
• Entertainment or dancing
• Delivery operations
• Catering
• Patios
• Property and equipment values
• Liability limits
• Policy deductibles

The best way to determine your restaurant insurance cost is to provide accurate information about your operation to a commercial insurance broker who can compare appropriate insurance options.

Your Cooking Equipment Matters More Than You May Think

From an insurance perspective, what happens in the kitchen can matter just as much as what happens in the dining room.

Commercial cooking creates a significant fire exposure. An insurance company may want information about your:

• Deep fryers
• Grills
• Charbroilers
• Woks
• Pizza ovens
• Solid-fuel cooking
• Hood and exhaust systems
• Automatic fire suppression systems
• Hood and duct cleaning schedule
• Fire extinguishers
• Electrical systems

Grease accumulation, poorly maintained equipment, and inadequate cleaning can increase the chance that a small incident becomes a major fire.

Food Safety Is Also a Business Risk

Insurance cannot replace proper food safety.

Ontario’s Food Premises Regulation establishes requirements affecting areas such as food handling, sanitation, equipment, refrigeration, cleaning, and contamination prevention.

Strong restaurant procedures should include areas such as:

• Safe food temperatures
• Allergen procedures
• Cleaning and sanitation
• Pest management
• Employee training
• Food storage
• Equipment maintenance
• Incident documentation

A food-related incident can create more than an insurance claim. It can affect your reputation, online reviews, revenue, employees, and ability to operate.

Do You Offer Delivery or Catering?

Your restaurant may operate very differently today than it did when you originally purchased your insurance.

Delivery is a good example.

If employees drive for deliveries, or your restaurant owns vehicles, tell your insurance broker. Personal automobile insurance should not automatically be assumed to cover vehicles being used for business purposes.

The same applies to catering.

Once employees, food, and equipment leave your restaurant, you may introduce risks that were not contemplated when the original policy was written.

Restaurants using third-party delivery platforms should also understand where the platform’s insurance or contractual responsibility ends and where the restaurant’s responsibility begins.

Restaurant Insurance Gaps Owners Often Overlook

The biggest insurance problem is not always having no insurance.

Sometimes it is believing something is covered when it is not.

When reviewing your restaurant insurance, consider asking your broker about the following areas:

Tenant Improvements
If you spent a significant amount renovating a leased restaurant, are those improvements properly reflected in your property coverage?

Food Spoilage Limits
Would your policy limit actually replace the inventory inside a fully stocked walk-in refrigerator or freezer?

Business Interruption
Could your business survive several months without normal revenue?

Equipment Breakdown
What happens if critical refrigeration, HVAC, or mechanical equipment suddenly fails?

Cyber Risk
Your restaurant may collect customer information, process card payments, operate a cloud-based POS system, accept online orders, and rely on multiple connected systems.

Crime
How would your policy respond to theft, robbery, employee dishonesty, or other crime-related losses?

Property Away From Your Restaurant
Is equipment used for catering, festivals, events, or pop-ups covered when it leaves your main location?

Delivery
Are employees and vehicles properly insured when making deliveries?

Water Damage
Have you discussed sewer backup, flooding, and other water-related exposures that may affect your location?

Liquor Exposure
Does your policy accurately reflect how much alcohol you sell and how your restaurant operates?

When Should You Review Your Restaurant Insurance?

You do not necessarily need to wait until your annual renewal if your business has changed significantly.

Contact your broker when you:

• Renovate your restaurant
• Purchase expensive equipment
• Add deep fryers or change cooking methods
• Begin serving alcohol
• Extend your operating hours
• Add a patio
• Introduce delivery
• Start catering
• Add live entertainment or dancing
• Sign a new lease
• Open another location
• Significantly increase revenue
• Change ownership
• Expand your building
• Add company vehicles

Your insurance company priced and accepted your restaurant based on the information provided. When the business changes, your insurance may need to change too.

What Information Do You Need for a Restaurant Insurance Quote?

Getting organized before speaking with an insurance broker can make the quoting process faster and more accurate.

Restaurant Insurance Quote Checklist:

• Restaurant name and address
• Description of operations
• Years in business
• Owner’s restaurant experience
• Annual revenue
• Alcohol revenue
• Seating capacity
• Hours of operation
• Building information
• Details about cooking equipment
• Fire suppression information
• Hood and duct cleaning information
• Property and equipment values
• Leasehold improvement values
• Delivery or catering information
• Number of employees
• Claims history
• Current insurance policy, if applicable
• Insurance requirements contained in your lease

Accuracy matters. Leaving out a fryer, alcohol service, delivery operation, or significant renovation to obtain a cheaper quote can create serious problems later.

How Can Restaurants Reduce Insurance Costs?

The cheapest policy is not necessarily the best restaurant insurance policy. The goal should be to find appropriate protection at a competitive price.

Restaurant owners may be able to improve their insurance position by:

• Maintaining fire suppression systems
• Keeping documented hood and duct cleaning records
• Maintaining kitchen equipment
• Training employees
• Implementing strong food safety procedures
• Establishing responsible alcohol-service procedures
• Taking steps to prevent slips and falls
• Improving security
• Maintaining a favourable claims history
• Reviewing available deductible options
• Comparing suitable insurance companies
• Starting the renewal process before the last minute

Restaurant Insurance Ontario FAQs

Is Restaurant Insurance Mandatory in Ontario?

There is not one Ontario law requiring every restaurant to purchase the exact same restaurant insurance package.

However, certain insurance may be legally required depending on how your business operates, while landlords, lenders, franchisors, municipalities, event venues, and other contracts may require specific insurance coverage or liability limits.

Your legal, licensing, contractual, and insurance requirements should be reviewed based on your individual restaurant.

Does Restaurant Insurance Cover Food Poisoning?

Commercial general liability or product liability coverage may respond to certain claims alleging bodily injury caused by food your restaurant sold or served. Coverage is subject to your policy’s terms, conditions, exclusions, and limits.

Does Restaurant Insurance Cover a Kitchen Fire?

Commercial property coverage may respond to insured fire damage involving covered property. Other parts of your restaurant insurance program may address equipment, food inventory, and loss of income. Coverage depends on the cause of the loss and the wording of your policy.

Do I Need Restaurant Insurance if I Lease My Building?

Leasing your restaurant does not eliminate your exposure.

You may still own equipment, furniture, inventory, signage, and leasehold improvements. You can also face liability claims arising from your restaurant’s operations. Your commercial lease may also specify exactly what insurance you are required to maintain.

Do Small Cafés Need Restaurant Insurance?

A small café still faces risks involving customers, food, employees, equipment, property, and interruptions to the business.

The insurance program can be scaled to the size and nature of your café rather than using the same coverage as a large full-service restaurant.

What Is the Best Restaurant Insurance in Ontario?

The best restaurant insurance is not necessarily the cheapest policy. It is coverage that appropriately reflects your restaurant’s operations, property, liability exposure, cooking methods, alcohol sales, employees, equipment, and other business risks.

A commercial insurance broker can help you compare available coverage and determine which options are appropriate for your restaurant.

Protect the Restaurant You Worked Hard to Build

There is a lot that has to go right for a restaurant to succeed.

Your insurance should be one part of the business you do not have to second-guess.

At Duliban Insurance Brokers, we help Ontario business owners review their risks, understand their insurance options, and find commercial coverage designed around the way their business actually operates.

Whether you are opening a new restaurant, purchasing an existing location, expanding your operation, or wondering whether your current insurance still makes sense, our commercial insurance team can help.