How Much Does Restaurant Insurance Cost? 2025 Rates

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 business insurance 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.

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.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual General Liability premiums for small and large insurance agencies and are tailored to restaurant-specific exposures in each state (on‑premises dining capacity, liquor service or not, food-handling risks, delivery operations, location-specific loss trends, and local regulatory factors); actual premiums will vary by insurer, coverage limits and endorsements, claims and loss history, safety and food‑safety practices, payroll and revenue, and other business- and site-specific underwriting factors.

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. Your restaurant insurance might go up if you add endorsements like equipment breakdown coverage or food spoilage protection to help avoid financial losses from unexpected breakdowns or power outages.

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.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual Business Owner’s Policy (BOP) premiums for restaurant businesses using sample quotes from both small and large insurance agencies and reflect restaurant-specific state-level factors (on‑site dining capacity, liquor service exposures, kitchen equipment and property values, delivery operations, local loss trends, and regulatory environment); actual premiums will vary by insurer, coverage limits and endorsements, chosen deductibles, claims history, location, and other business- and site-specific underwriting factors.

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.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual liquor liability premiums for restaurant businesses using sample quotes from both small and large insurance agencies and reflect restaurant-specific factors by state (on‑site alcohol sales and service model, dram shop exposures, seating capacity, liquor‑license type, host/employee training, past loss history, and local legal and claim trends); actual premiums will vary by insurer, coverage limits and sublimits, endorsements, sales volume of alcohol, claims history, location, and other business- and site-specific underwriting factors.

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.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual Workers’ Compensation premiums for restaurant businesses using sample quotes from both small and large insurance agencies and reflect restaurant-specific state factors (payroll size and mix of kitchen and front‑of‑house staff, staffing levels and seasonal hires, state rate levels and statutory benefits, industry classification codes, and local claim trends); actual premiums will vary by insurer, exact payroll, experience modification factor, safety and return‑to‑work programs, payroll audits, and other business- and location-specific underwriting factors.

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.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are blended average annual Commercial Auto premiums for restaurant businesses using sample quotes from both small and large insurance agencies and are tailored to state-level restaurant exposures (delivery and catering vehicle usage, number and type of vehicles, garaging ZIP code, driver records, annual mileage, vehicle values, and local claim/legal trends); actual premiums will vary by insurer, coverage limits and deductibles, fleet size and usage patterns, driver histories, and other business- and location-specific underwriting factors.

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.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual Commercial Property premiums for restaurant businesses using sample quotes from both small and large insurance agencies and are tailored to state-level restaurant exposures (building and contents value, fire and water risk, location and ZIP‑code hazard, local replacement-cost trends, presence of hood/suppression systems, and whether the location is leased or owner‑occupied); actual premiums will vary by insurer, chosen coverage limits and endorsements, deductible, loss history, construction type, occupancy and mitigation measures, and other business- and location-specific underwriting factors.

Restaurant Business Insurance Costs By Provider

Restaurant business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on average annual premiums observed for restaurant businesses across both small and large agencies and typical coverage mixes (BOP, general liability, property, business interruption, workers’ compensation, liquor/product liability where applicable); actual premiums will vary by location, revenue, size, services offered, claims history, and selected coverage limits

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. Different jurisdictions carry varying regulations too, with some states and local health departments requiring much higher permits and coverage. 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. If you have large, commercial grade equipment including generators and refrigerators, you may need additional coverage. The same is true of the high-quality chairs and tables a luxury restaurant has over plastic chairs for a small sandwich shop on the beach. 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. For example, having a history of claims for foodborne illness–even allegations of contaminated food–can increase your liability and restaurant insurance costs. 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.