Behind the Counter: What Every Insurance Broker Should Know About Fast-Casual Restaurant Insurance

Running a fast-casual restaurant can be a high-risk business. From kitchen fires to customer accidents, there’s always a potential for something to go wrong. That’s where insurance comes in. But as an insurance broker, do you know everything you need to about fast-casual restaurant insurance?

The fast-casual restaurant industry has experienced significant growth in recent years, with an estimated value of $63 billion. However, this success also comes with challenges, such as the need for comprehensive insurance coverage. For insurance brokers, understanding the unique risks and coverage needs of fast-casual restaurants is crucial to providing the right coverage options to clients.

In this article, we’ll explore the key factors insurance brokers should consider when providing fast-casual restaurant insurance. From liability coverage to property damage, we’ll examine the different types of insurance policies needed to protect the business and its assets. Whether you’re a seasoned insurance broker or new to the industry, this article will provide valuable insights to help you navigate fast-casual restaurant insurance with confidence.

What is a fast-casual restaurant?

A fast-casual restaurant is a type of dining establishment that falls somewhere between fast food and casual dining. These restaurants typically offer high-quality, fresh food that is made to order while still offering the convenience and speed of traditional fast food. Customers typically order at a counter or kiosk, but the food is often brought to the table by a server. Many fast-casual restaurants use higher-quality ingredients and offer more health-conscious options than traditional fast-food chains. Many fast-casual restaurants also offer an atmosphere that is more upscale than traditional fast-food restaurants, with modern decor and sleek design elements that cater to a younger, more affluent crowd. Examples of popular fast-casual restaurants include Chipotle, Panera Bread, and Shake Shack.

Industry Trends

The fast-casual restaurant industry has been growing rapidly in recent years, with more and more consumers opting for a quick and convenient dining experience without sacrificing quality. The fast-casual restaurant sector is projected to be valued at $209 billion by 2027 and is among the fastest-growing food chain types in the industry, according to Allied Market Research. This growth can be attributed to various factors, such as changing consumer preferences, increased health-consciousness, and a rise in the popularity of delivery services. Many fast-casual restaurants have adapted to these trends by offering customizable and healthier menu options, as well as partnering with delivery services like Uber Eats and DoorDash to reach a wider audience.

Technological advancements have also played a significant role in the growth of the fast-casual industry, with more restaurants incorporating digital platforms into their operations. Mobile ordering and payment systems have become increasingly popular, allowing customers to skip the lines and order directly from their smartphones. Additionally, many restaurants have implemented loyalty programs and mobile apps to incentivize repeat business and streamline the ordering process. These technological advancements have helped to improve the customer experience, increase efficiency, and ultimately drive sales for fast-casual restaurant chains.

Also, because fast-casual restaurants have limited table service, they can reduce their front-of-house staff and labor costs – important in this tight job market.

What Insurance Coverages Do Fast-Casual Restaurants Need?

Like any type of restaurant, a fast-casual restaurant must protect its operation against property and liability losses.

Property Insurance

Typically, owners of a fast-casual restaurant are tenants in the space where they operate, although some may own the building. Determining the values of the building and business contents is key in ensuring that an insured is properly covered. Kitchen fires and water damage are restaurants’ most common causes of property losses.

Business Interruption coverage is critical in helping a fast-casual restaurant pay ongoing expenses, recoup loss of income, and get back up and running in the event of a covered property loss.

Equipment Breakdown insurance is needed to protect the establishment’s financial health from harm to equipment – from the walk-in cooler to the AC – caused by hazards such as power surges, short circuits, centrifugal force, boiler overheating or cracking, and mechanical breakdown. For example, a power outage could prevent a restaurant from preparing and cooking food for its patrons as well as shut down its online order service, resulting in a significant loss of income. Or, if the compressors in a restaurant’s refrigeration unit short out overnight, all its food provisions will have to be discarded. Not only does the restaurant have the cost to repair or replace the refrigeration unit, but it also may bear the cost to replace the spoiled food. Additionally, there may be lost income while the refrigerator and its contents are replaced.

Food Spoilage coverage protects against financial losses if a refrigeration system fails due to covered loss, damaging supplies and ingredients. It will help pay for the cost of replacing the damaged goods.

Crime insurance is important to protect against employee theft.

General Liability Insurance

Of course, premises liability exposures are of great concern for fast-casual restaurants due to the number of visitors coming in and out of an establishment. Slips, trips, and falls are the most common causes of restaurant claims. Identifying hazards that increase a restaurant’s exposure in this area is critical.

While fast-casual restaurants don’t have a full bar, many serve beer and wine. For those that have liquor sales, Liquor Liability coverage is a must.

Employment Practices Liability Insurance (EPLI)

Protecting a restaurant against allegations related to employment practices such as discrimination, harassment, wrongful termination, and other mistreatment is essential to its ongoing success. EPLI provides defense coverage and will pay out if the insured is found liable for these types of claims.

Cyber Liability Insurance

Fast-casual restaurants are at the forefront of utilizing technology for online ordering, with customers providing credit card information into their systems. Cyber Liability insurance protects establishments in the event of a data breach or other type of cyberattack.

Umbrella Insurance

Primary Liability policies go only so far in protecting a restaurant from financial loss. Consider the ramifications of a significant loss involving a restaurant’s actual or alleged negligence. Restaurant umbrella insurance supplements the coverage provided by the underlying policies and provides additional limits that may be needed in the event of a large loss.

We’re Here for All Your Fast-Casual Restaurant Insurance Needs

Distinguished Programs offers a Package policy for fast-casual restaurants that includes Property and Liability insurance along with enhanced specialty coverages such as food spoilage, food contamination business interruption, employee theft, backup of sewers and drains, and other features.

You can also write EPLI, Cyber, and Umbrella insurance with Distinguished. Our Umbrella policies are available with limits up to $140 million.

We Say “Yes” to New Ventures

Distinguished is a great market for new restaurant ventures, providing you with an opportunity to expand your footprint in the growing fast-casual restaurant market. As long as the management behind the new venture has restaurant experience, we will accept submissions for new ventures/start-ups for review.

Our Package policy is also customizable, which is in sync with the innovative approach behind today’s fast-casual restaurants. We can work with you to meet the insurance needs of an individual’s operation.

Why Partner with Us?

  • You have access to a one-stop shop for comprehensive restaurant coverage.
  • You get the benefit of working with a team with more than 30 years of restaurant insurance experience.
  • You can write restaurants throughout the country.
  • Your clients’ Package Policy is written on A+XV paper, providing the stability they want in a program.

About Distinguished Programs

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate & Builder’s Risk, Community Associations, Hotels, and Restaurants. Property and Liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished’s high-limit Umbrella programs remain the clear choice in its area of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

View a full list of our programs and submit business with Distinguished.

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