How Much Does Restaurant Insurance Cost? 2025 Rates

In 2025, U.S. restaurants can expect to pay between $3,000 and $6,000 annually for comprehensive business insurance, averaging $250 to $500 per month. The primary cost drivers are employee count, alcohol service, and property value.

How Much Does Restaurant Insurance Cost?

The average restaurant in the U.S. pays between $3,000 and $6,000 per year for a full business insurance package. That breaks down to roughly $250 to $500 per month. However, this is just a ballpark range and actual costs can vary widely depending on your specific situation.

Every restaurant has its own unique risks and insurance needs, which is why there’s no one-size-fits-all premium. A small café with no employees and no alcohol service will pay far less than a large, full-service restaurant with a liquor license and dozens of employees. The type of food you serve, your hours of operation, the value of your property, and even your location can influence your premiums.

For example, restaurants in cities with higher crime or lawsuit rates may pay more for liability coverage. Similarly, a place with deep fryers and grills will likely have higher property premiums due to the fire risk, compared to a sandwich shop with minimal cooking equipment.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Liquor sales (increases liability exposure)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Understanding these variables can help you better estimate your insurance needs and prepare for the real costs of protecting your restaurant.

Average Restaurant Insurance Costs For Coverage Types

When it comes to protecting your restaurant, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan. Here’s a closer look at the major coverages most restaurants need.

• General liability insurance: $73 per month
• Business owner’s policy: $180 per month
• Liquor liability insurance: $45 per month
• Workers’ compensation insurance: $150 per month
• Commercial auto insurance: $147 per month
• Commercial property insurance: $150 per month

General Liability Insurance

The average cost of general liability insurance for a restaurant is about $73 per month.

General liability covers third-party bodily injury, property damage, and advertising injuries. For example, if a customer slips on a wet floor and gets injured, this policy would help pay for their medical expenses and your legal defense costs.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

Factors that influence the cost include the restaurant’s size, location, customer traffic volume, previous claims history, and whether high-risk activities like live entertainment are offered.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $180 per month for restaurants.

A BOP bundles general liability insurance with commercial property insurance. It protects against customer injuries, property damage, and loss or damage to the restaurant’s building, furnishings, and kitchen equipment. For instance, if a kitchen fire damages your ovens and walls, the BOP would help cover repairs and replacements.

Typical policy limits are $1 million per occurrence and $2 million aggregate for liability, with separate property coverage limits based on the value insured.

Cost factors include the restaurant’s property value, location risk (such as flood or crime rates), business revenue, number of employees, and any optional endorsements like food spoilage or business interruption insurance.

Liquor Liability Insurance

The average cost of liquor liability insurance for restaurants that serve alcohol is about $45 per month.

Liquor liability covers claims related to injuries or property damage caused by intoxicated patrons served at your restaurant. For example, if a customer drinks too much at your bar and later causes a car accident, this policy could help cover legal fees and damages.

Typical policy limits are $1 million per claim, but higher limits are sometimes required by state laws or event contracts.

Cost depends on the percentage of your revenue from alcohol sales, the type of alcohol served, staff training in responsible alcohol service, and previous liquor-related claims.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a restaurant is around $150 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if a chef burns their hand on a grill, workers’ compensation would cover their hospital visit and part of their lost wages while they recover.

Policy limits are regulated by each state, but typically include medical costs and a percentage of lost wages without a set cap.

Premiums are influenced by the size of your payroll, the type of work employees perform (kitchen staff, servers, bartenders), your claims history, and any implemented safety programs.

Commercial Auto Insurance

The average cost of commercial auto insurance for restaurants that offer delivery or catering services is about $147 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, if a delivery driver causes an accident while bringing food to a customer, this policy would cover the damages and any third-party claims.

Typical policy limits are around $1 million combined single limit (covering both bodily injury and property damage).

Factors influencing the cost include the number and type of vehicles, how often they are used, the driving records of employees, whether deliveries are local or long-distance, and whether you add endorsements like hired and non-owned auto insurance (HNOA) for employee-owned vehicles used for deliveries.

Commercial Property Insurance

The average cost of commercial property insurance for a restaurant, when purchased separately, usually runs $150 per month.

Commercial property insurance covers damage to the restaurant building and its contents due to fire, theft, vandalism, or certain weather events. For example, if a kitchen fire destroys equipment like ovens and refrigerators, this policy would pay for repairs or replacement.

Typical policy limits are based on the replacement cost value of the insured property, which could easily reach into the hundreds of thousands depending on your location, building size, and equipment investments.

Premiums are determined by factors like the building’s age and construction type, fire safety systems in place, replacement cost of equipment, neighborhood crime rates, and whether you add endorsements such as equipment breakdown coverage or food spoilage protection.

What Factors Impact Your Restaurant Insurance Costs?

Restaurant insurance premiums are carefully calculated by underwriters based on your business’s risk profile. From the food you serve to your location and claims history, several factors influence what you’ll pay for coverage.

Type Of Restaurant

Different restaurant models carry different risks. Full-service restaurants and bars typically pay more than small sandwich shops. Alcohol service especially raises liability risks if intoxicated patrons cause harm.

Alcohol Sales

Serving alcohol directly impacts your premiums. Liquor liability insurance is often mandatory, and businesses with higher alcohol sales usually face higher insurance costs.

Location

Restaurants in high-crime, flood-prone, or urban areas typically pay more for property and liability insurance. A low-risk suburban location with fewer claims can lower your premiums.

Size Of Your Operation

More square footage, seating, employees, and revenue all raise the chances of a claim. Workers’ compensation costs also rise with larger staff counts, especially in fast-paced kitchens.

Property Value And Equipment

Expensive cooking appliances, walk-in freezers, and custom furnishings increase your commercial property premiums. Many restaurants add endorsements like equipment breakdown or food spoilage insurance to protect valuable assets.

Claims History

If you’ve filed frequent insurance claims, underwriters will see you as higher risk, leading to higher rates. A clean claims record can qualify you for discounts.

Policy Limits And Deductibles:

Higher policy limits mean better protection but come with a higher premium. Choosing a larger deductible can lower your monthly costs but raises your out-of-pocket risk when claims occur.

Optional Endorsements

Add-ons like business interruption, cyber liability, and hired and non-owned auto coverage tailor protection but increase your premium. They are essential for restaurants with delivery, online ordering, or high perishable inventories.

Insurance Provider

Rates vary among insurers. Some specialize in hospitality risks and offer better pricing or more flexible options. Comparing quotes from multiple carriers can save you money.

How To Lower Your Restaurant Insurance Costs

Running a restaurant is expensive, but your insurance bill doesn’t have to break the bank. While you can’t eliminate the need for coverage, you can take smart steps to reduce your premiums without sacrificing protection. Here are some practical ways to lower your restaurant insurance costs:

Bundle Your Policies

One of the easiest ways to save is by bundling multiple policies. Most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation or liquor liability insurance, bundling all three through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

Ask About Discounts

Insurance companies often reward restaurants that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually. You might also qualify for lower rates if you pay your premium in full instead of in monthly installments.

Implement Safety Measures

Accidents are expensive for both you and your insurer. Taking steps to reduce the chance of customer or employee injuries can lead to lower premiums over time. For example, installing non-slip flooring, using wet floor signs, maintaining clean, clutter-free walkways, and regularly servicing kitchen equipment can help lower your general liability risk.

Create A Safe Working Environment

A solid safety program can reduce workers’ compensation costs. This includes training staff on safe food handling, proper lifting techniques, fire safety procedures, and having clear emergency exit routes. Fewer accidents mean fewer claims—and that translates to lower premiums in the future.

Train Your Staff On Alcohol Service

If your restaurant serves alcohol, be sure your team is trained in responsible alcohol service. Many states offer alcohol certification programs like TIPS or ServSafe Alcohol. Insurers may offer discounts to restaurants that require this training, as it shows you’re proactively reducing liquor liability risk.

Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your restaurant a safer, more resilient business.