Find insurance for restaurants in Texas
Learn about license requirements and the most common restaurant insurance policies in Texas.
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What are the most common policies for restaurants in Texas?
Restaurants may need different types of insurance coverage depending on the food and drinks they serve and their location. These are the most popular restaurant insurance policies for Texas food establishments to protect against potential risks and financial losses.
Business owner's policy
A BOP bundles commercial property insurance and general liability insurance under one plan. It’s one of the most popular and cost-effective options for Texas restaurants.
- Food contamination and spoilage
- Commercial property coverage
- Business interruption incidents and closures
Workers’ compensation insurance
Texas doesn't require workers' comp for food service businesses with employees, but it's strongly recommended. It also protects sole proprietors from work injury costs health insurance might deny.
- Employee medical expenses
- Disability benefits
- Legal costs from employee injuries
General liability insurance
This insurance policy provides liability coverage and financial protection from common third-party business risks, such as a customer slip-and-fall accident at your food service business.
- Customer bodily injuries
- Damaged customer property
- Product liability lawsuits
Commercial auto insurance
This policy covers the cost of accidents involving any delivery vehicles owned by your restaurant, including damage caused to another person's car and medical bills.
- Medical bills from accidents
- Property damage from accidents
- Vehicle theft and vandalism
Liquor liability insurance
This policy covers legal fees, property damage, and medical costs if alcohol is served or sold at your restaurant to a visibly intoxicated person who then proceeds to harm others.
- Injuries caused by intoxicated patrons
- Property damage caused by intoxicated patrons
- Legal defense costs
Cyber insurance
Cyber liability insurance helps restaurants recover from cyberattacks and data breaches. It's recommended for any business that stores customer information.
- Data breach notification costs
- Fraud monitoring services
- Cyber extortion payments
Which policies are required for restaurants in Texas?
Workers' compensation insurance
In Texas, it's optional for restaurant owners with employees to carry workers’ compensation insurance. This policy helps pay for medical expenses and disability benefits if a worker is injured or becomes ill on the job.
Independent contractors and sole proprietors without employees also aren’t required to carry workers’ comp, which is standard across most states. However, many choose to purchase coverage for added protection, as most policies also include employer's liability insurance, which helps cover legal costs if an employee files a workplace injury lawsuit.
Commercial auto insurance
Commercial auto insurance covers property damage and medical bills resulting from an accident involving your restaurant business's vehicle. Depending on the coverage options you choose, it can also pay for vehicle theft, weather damage, and vandalism.
Minimum auto liability requirements for Texas businesses are:
- $30,000 in bodily injury liability or death liability per person
- $60,000 in bodily injury liability or death liability per accident
- $25,000 in property damage per accident
For vehicles that are used by the business but are leased, rented, or otherwise not owned by the company, you'll need a separate policy called hired and non-owned auto insurance (HNOA). This policy provides liability insurance but it doesn't cover damage to the insured vehicle.
Personal auto insurance will typically not cover any driving for business purposes, which is why you may need supplemental coverage.
Do I need a license or permit for my restaurant in Texas?
Yes. Restaurant owners in Texas may need several licenses and permits before opening or operating their business. Requirements can vary depending on your city or county, but most Texas restaurants need the following:
- Business license: Texas doesn’t issue a statewide general business license, but many cities and counties require a local business permit to operate legally.
- Sales tax permit: Issued by the Texas Comptroller of Public Accounts, this permit is required if you sell taxable food or beverages and collect sales tax.
- Food establishment permit: Required from your local health department to ensure compliance with food safety and sanitation regulations.
- Food handler’s certification: Required for employees who prepare or serve food, showing they’ve completed approved food safety training.
- Food manager certification: At least one certified food protection manager is typically required per location.
- Liquor license or permit: Issued by the Texas Alcoholic Beverage Commission (TABC), this is required if your restaurant serves alcohol.
- Catering permit: Required if you plan to provide off-site catering services.
Additional permits may be needed depending on your operations, such as mobile food permits for food trucks or zoning and building permits for brick-and-mortar locations.
To obtain the required permits, you may need to submit an application, pass inspections, complete training or exams, and pay applicable fees. Costs and timelines will likely vary based on your location, business structure, and the type of food service you provide.
How much you’ll pay in fees—and for restaurant insurance—depends on factors such as whether you’re a sole proprietor or limited liability company (LLC), whether you serve alcohol, the number of employees you have, and the risks associated with your operations.
How much does restaurant insurance cost in Texas?
A fast food restaurant that focuses on takeout will pay less for insurance than a large bar and grill or fine dining restaurant.
In Texas, restaurant business owners who buy policies from Insureon pay an average of:
General liability: $42 per month
Workers' compensation: $32 per month
Business owner's policy: $73 per month
Factors that affect restaurant insurance costs include:
- Kitchen equipment and property
- Business income
- Types of business insurance purchased, such as equipment breakdown and umbrella insurance
- Coverage options, such as policy limits and exclusions
- Location, such as Austin or San Antonio
- Number of employees
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How do I get Texas restaurant insurance?
Insureon helps you save time and money shopping for restaurant liability insurance by comparing quotes from top U.S. insurance companies.
Our insurance agents are licensed in Texas and can answer your questions as you consider coverage.
To make the application go quicker, have this information ready:
- Workforce details, such as the number of employees and restaurant operations
- Current and projected revenue
- Business partnerships
- Desired coverage limits
- Claims history
- Commercial lease insurance requirements
Apply for free insurance quotes today to find cheap restaurant insurance that fits your business needs. Most small business owners receive a certificate of insurance for proof of insurance the same day.