Home Insurance Public and Product Liability Insurance for Restaurants Explained

Public and Product Liability Insurance for Restaurants Explained

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For a customer, a restaurant is a place where they can relax and enjoy delicious food with friends and family.

However, things are different for a restaurant owner. They must manage everything from the kitchen to the table, and everything in between.

While you need a great team, menu and location to succeed in the restaurant business, you also need suitable insurance. Otherwise, one costly mistake can put your restaurant out of business.

What if your waiter spills hot coffee onto a customer? What if someone falls on a slippery floor and is injured? What if a client claims to have experienced food poisoning after having your delicious pasta?

In such scenarios, an unforgiving victim can ask for payments for their injuries or file a lawsuit against your business. This can be financially devastating for a small restaurant. Even if you are not guilty, the cost of defending yourself in court can be in the thousands of dollars, just to prove you were innocent.

That is why a restaurant should have public liability and product liability insurance.

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What is Public Liability Insurance for Restaurants?

Public liability insurance is one of the important covers for restaurants.

Accidents are likely to take place in restaurants due to a high volume of traffic and the serving of hot foods and “liquids”. Someone can slip or trip, or hot food or drink can be spilled on a client.

Aggrieved clients can sue you for injuries caused by your business operations.

Enter public liability insurance for café and restaurant owners.

It can cover the cost of claims, legal fees, and damages for injuries caused by your restaurant to any third party or individuals not employed by you. It can save you from having to pay out of your own pocket, thereby saving you from financial crises.

What is Product Liability Insurance for Restaurants?

Product liability insurance is a must for restaurants and foods establishment.

The reason is simple—it protects against claims arising from food-borne illness caused by the food served by you.

Despite using the best ingredients and having a quality control process in place, you can never be sure that your customers won’t experience health issues. Even with food items that are generally fresh and safe, there is always the chance something may go wrong.

Claims of health issues caused by your food items can be overwhelmingly costly, and even if you are not guilty, you may have to fork out a lot of money to defend yourself.

Product liability can protect your business by providing cover against claims and associated legal costs.

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Generally, product liability insurance is included in public liability cover.

What are Other Important Insurances for Restaurant Owners?

While public and product liability covers are important, there are other types of cover to consider for your restaurant.

Building Cover:

If you own or lease a building that houses your food establishment, commercial property insurance can help you pay for damages and repair in case of a storm or vandalism.

Equipment Cover:

If ovens, refrigerator, deep freezer, fryer, or other important equipment break down or have other problems, a machinery breakdown cover can help cover the cost of repair.

Restaurant Business Interruption Cover:

You never know when a major fire or water damage may force you to close your doors for an extended period. Therefore, you should have a business interruption cover in place to pay for the losses due to the interrupted operations. Some plans might cover wages for staff as well as ongoing expenses such as rent.

Management Liability Cover:

As your restaurant grows, you need more staff to handle the ever-increasing load. Business growth also increases your exposure to the risks associated with operating a business. Enter management liability cover. It can protect your business from risks, including:

  • Theft of crime by workers.
  • Allegations of harassment, bullying and unfair dismissal. 
  • Penalties imposed for incorrect disposal of waste. 

Workers Compensation:

You have a diverse workforce at your restaurant, including chefs, waiters and cleaners. You are required to have workers’ insurance to cover their injuries and illness at the work. This is a mandatory insurance in Australia.

Bottom Line:

Product and public liability covers are important for any restaurant regardless of their size and type. They offer protection against the injuries and damage caused by your business operations. You also need to consider covers for your restaurant, including workers compensation, business interruption, equipment covers and commercial property insurance.

What do you think? Let us know by commenting below!


The cover may be available subject to meeting insurers underwriting criteria. Cover inclusions vary significantly from insurer to insurer. DO NOT rely upon the above. Check your policy schedule carefully for inclusions and exclusions and limitations. Talk to a business insurance broker for more information.)

Author Bio:

Romit Malhotra is the brand representative of Public Liability Insurance Australia, a leading Australian insurance broker. A big foodie, he loves to travel the world. Also, a diligent businessman, Romit likes to pen down his thoughts on related topics whenever he finds some free time.

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