How much does business insurance cost for fast food restaurants?
The cost of fast food restaurant insurance depends on the policies you choose, the unique risks your fast food restaurant faces, and the value of your business property. Save on small business insurance costs by comparing quotes from different providers with Insureon.
Top business insurance policies for fast food restaurants and their costs
Here are the top insurance policies purchased by fast-food restaurant businesses and their average monthly costs:
- Business owner's policy (BOP): $277 per month
- General liability insurance: $139 per month
- Workers' compensation insurance: $103 per month
- Commercial auto insurance: $222 per month
- Liquor liability insurance: $64 per month
- Cyber insurance: $129 per month
Our figures are sourced from the median cost of policies that fast food restaurant owners have purchased through Insureon. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
Business owner’s policy
Fast food restaurants pay an average of about $277 per month, or $3,328 annually, for a business owner’s policy.
A business owner's policy, or BOP, bundles general liability coverage with commercial property insurance to protect against common third-party risks and damage to your fast food restaurant equipment, such as fryers and refrigerators. It typically costs less than purchasing each policy separately.
A BOP covers customer injuries and property damage, along with damage to your own business property. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents.
This is the average business owner's policy for fast food restaurant businesses that buy from Insureon:
Insurance premium: $277 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000
Small, low-risk food businesses are often eligible for a business owner's policy.
Fast food restaurant owners and other food service businesses may see higher costs if they choose to add endorsements to their policy.
Insurance endorsements, such as business interruption insurance or equipment breakdown coverage, are often recommended to help avoid financial losses if a fire or power outage forces your business operations to cease for an extended period of time or causes food spoilage.
The cost of a business owner's policy is based on a number of factors, including the value of your property, where you are located, and the number of employees you have.
General liability insurance
Fast food restaurant businesses pay an average of $139 per month, or $1,671 annually, for general liability insurance (sometimes called public liability insurance).
General liability insurance covers common fast food restaurant risks, including third-party property damage and bodily injury. For example, if a customer slips and falls on a wet floor at your business, a general liability policy would then cover their medical bills.
It can also help pay legal fees if someone sues your business for copyright infringement or advertising injuries, including defamation. However, one exclusion is alcohol-related claims. For that, look to liquor liability insurance.
In addition, some landlords may require fast food restaurant owners to obtain proof of insurance to sign a commercial lease.
Below is the average general liability policy for fast food restaurant companies that buy from Insureon:
Insurance premium: $139 per month
Policy limits: $1 million per occurrence; $2 million aggregate
General liability coverage often includes product liability insurance, which protects your fast food restaurant against claims that a product you sold or distributed caused food poisoning.
General liability insurance costs depend on factors such as the coverage limits and deductible you choose, your business size, your business income, your foot traffic, and any additional insured endorsements you select.
Learn more about how your insurance premium is calculated and how to save money on your general liability coverage.
Workers’ compensation insurance
The average cost for workers’ compensation insurance for fast food restaurants is $103 per month, or $1,242 annually.
A workers’ compensation policy covers medical bills and lost income if you or an employee gets injured or ill on the job, such as a worker at your fast food restaurant who burns themselves while taking food out of a hot oven and needs urgent care. Businesses that have employees typically must purchase workers' comp to comply with state requirements and avoid penalties.
Workers' comp laws vary by state, and your requirements depend on where you live. For example, all fast food restaurants are required to carry a workers' compensation policy in California if they have one or more employees. However, coverage is optional in Texas.
Most policies include employer’s liability insurance, which protects fast food restaurant owners against lawsuits related to workplace injuries.
Since health insurance plans can deny claims for injuries related to your job, workers' compensation coverage is also recommended for sole proprietors as a financial safety net and for extra peace of mind.
The cost of workers' comp depends on several factors, primarily your number of employees and their occupational risks. You can save money on your workers' comp coverage by classifying your workers correctly and implementing a risk management plan to minimize employee injuries.
Commercial auto insurance
Fast food restaurants and other food businesses pay an average of $222 per month, or $2,669 annually, for commercial auto insurance.
This type of business insurance pays for property damage and medical expenses from accidents involving your company vehicles, such as your business-owned delivery vans. It can also cover vehicle theft, vandalism, and weather damage.
Most states require this type of insurance for vehicles owned by your fast food restaurant business. For personal, rented, and leased vehicles used for work purposes, look to hired and non-owned auto insurance (HNOA) instead.
The cost of commercial car insurance depends on several factors, including the policy limits you choose, claims history, the number and value of your vehicles, and the driving records of anyone permitted to drive. Learn how insurers calculate your premium and how to save money on commercial auto coverage.
Liquor liability insurance
The average cost of a liquor liability insurance policy for food and beverage businesses, including fast food restaurants, is $64 per month, or $769 annually.
This type of insurance protects food and beverage businesses from liability claims related to serving alcohol. In some jurisdictions, your fast food restaurant might need liquor liability coverage in order to obtain a liquor license.
This is the average liquor liability policy for fast food restaurant owners who buy from Insureon:
Insurance premium: $64 per month
Policy limit: $1 million per occurrence, $2 million aggregate
What's more, many states have dram shop laws that hold a business liable for any damages caused by intoxicated customers who were served by your staff. This can make this coverage all the more important to protect businesses against the expensive legal fees and other financial losses from an incident.
Learn how to save money on your policy, which coverage options to choose, and how liquor liability costs are calculated.
Cyber insurance
Small businesses pay an average of $129 per month, or $1,552 annually, for cyber insurance. You might also see this policy called cyber liability insurance or cybersecurity insurance.
Cyber insurance helps fast food restaurants recover financially after a data breach or cyberattack. It can help pay for customer notification costs, fraud monitoring services, and other costs necessitated by state data breach laws.
The cost of cyber insurance depends on the amount of personal information handled by your fast food restaurant, such as customer credit card numbers, along with the number of employees who can access that information.
How are fast food restaurant insurance costs calculated?
Fast food restaurant insurance coverage costs are determined by several factors. While underwriting your policy, insurance companies will consider the following when calculating insurance rates:
- Food delivery services offered: Fast food restaurants may see elevated premiums if they offer higher-risk products or services, such as partnering with third-party delivery apps like Uber Eats, compared to restaurants that only use in-house services.
- Business property and fast food restaurant equipment: Fast food locations that work with higher-value equipment are likely to see higher premiums. Also, any equipment that is frequently used could cost more to insure than items that are used less often.
- Location: If your fast food restaurant operates in an area that is more prone to natural disasters, increased foot traffic, or high crime rates, you may have to pay higher insurance costs than a restaurant located in an area where these factors are less present.
- Number of employees: If your fast food restaurant has several employees on staff, you could see increased insurance costs, as there are more opportunities for kitchen accidents to happen or for potential damage to occur to a customer's property.
- Business size and revenue: Insurance companies might assume a fast food location that is making more money will also see increased customer exposure, which can generate higher premiums.
- Coverage limits and deductibles: Fast food restaurants with higher coverage limits and lower deductibles on their insurance policies will typically see their premium costs increase, while lower limits and a higher deductible can help keep their rates lower.
- Type of business operation: A small fast food business with a couple of employees may not have to pay as much for insurance as a larger restaurant with several staff members.
- Types of insurance coverage purchased: Some policies are required for fast food franchises to obtain licensing or meet lease agreements. These required policies often are needed to cover more expensive accidents and lawsuits, and tend to cost more than other basic coverages.
- Claims history: A fast food business owner with a lengthy list of previous insurance claims will likely pay more for insurance than a restaurant owner with no claims history.
How do I get affordable fast food restaurant insurance?
Insureon can help fast food franchises, individual restaurants, and other businesses in the food service industry find affordable insurance coverage, whether you work independently or hire employees.
To get started, all you need is your business information on hand. Our insurance application will ask for basic facts about your business, such as revenue and number of employees. Then, you can buy a policy online with Insureon in three easy steps:
- Fill out a free online application with details about your business.
- Compare custom quotes from top-rated U.S. insurance companies.
- Select a policy and pay the premium to begin coverage.
Our licensed insurance agents are available to answer questions about the different kinds of fast food restaurant insurance policies, state insurance requirements, and the best types of coverage for your specific restaurant needs.
Once you've bought the right policies for your fast food insurance needs, you can download a certificate of insurance (COI) for proof of coverage. Most small business owners can get insured with the right coverage within 24 hours of applying for quotes.
What our customers are saying
The average costs on this page were derived from our data on small business owners in the fast food field who purchased policies through Insureon. Most of our customers have less than five employees, annual revenue ranging from around $50,000 to more than $200,000, and five years or less in business.
Find fast food restaurant insurance quotes
Want free expert advice right in your inbox?
By entering your email address and subscribing, you agree to our Terms of Use and Privacy Policy