Is Restaurant Insurance Required by Law?

Running a restaurant in Salt Lake City, UT can make you a beloved member of the community and may involve rewarding achievements. However, this business model often comes with significant challenges and responsibilities, including those related to restaurant insurance. You’re likely aware of how the right policies can cushion extensive financial losses, but are you also up to speed on possible legal requirements?

Understanding Insurance Requirements for Restaurants

While Utah law does not generally mandate a specific type of insurance strictly for restaurants, there are certain policies that may be legally required for many businesses, including your own. For example, if you have employees, state law requires you to carry workers’ compensation insurance. This coverage helps financially protect your staff in case of work-related injuries or illnesses and is a critical part of complying with state regulations.

Additionally, if your restaurant owns or operates vehicles, such as for deliveries or catering, you are required to have commercial auto insurance. Restaurants that serve alcohol must also typically comply with state liquor liability laws, which often require liquor liability insurance as a condition of obtaining or maintaining a liquor license.

Common Types of Restaurant Insurance

Beyond legal requirements, there are several types of coverage that can help cover your restaurant against various risks:

• General liability insurance—This can limit losses if your restaurant is responsible for other parties’ injuries or other losses, such as if a kitchen fire spreads to neighboring buildings or customers become ill due to contaminated food.
• Property insurance—This type of insurance may be required by landlords or mortgage lenders and can help after covered incidents that involve damage to physical assets, such as your building, equipment, appliances, furniture, inventory, signage and landscaping.
• Business interruption insurance—If a covered incident, such as a fire, break-in, explosion or burst pipe, forces you to temporarily close your restaurant, this type of insurance may help manage ongoing costs and recover lost revenue.
• Employment practices liability insurance—This coverage can limit losses and legal expenses if a current, former or prospective employee brings allegations of improper workplace practices, such as harassment, discrimination or wrongful termination.

How Our Team Supports Restaurants

At Axcess Insurance, we understand the complexities of running a restaurant and possible insurance needs. Contact us today to discuss your options and confirm compliance with applicable requirements.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.