Due Diligence Checklist for a Restaurant Owner

A due diligence checklist for a restaurant owner during an insurance renewal can help ensure that you have adequate coverage, understand any changes, and are prepared for risks that your business faces. Here’s a checklist to help guide you through the process:

1. Review Existing Insurance Policies

General Liability Insurance: Ensure policy covers all your business operations and locations. Confirm coverage for off-site catering or pop-ups.

Property Insurance: Confirm adequate coverage to replace all inventory, improvements and business property. Majority of policies we review do not have appropriate coverage.

Business Interruption Insurance: Verify limits are high enough to cover profit, overhead and fixed expenses should your business be disrupted due to a covered loss.

Workers’ Compensation: Ensure it covers all employees, including freelancers and all employees properly classified.

Liquor Liability Insurance: An important part of liability coverage to cover any claims resulting from the sale of alcohol.

Spoilage: Check coverage for spoilage and contamination.

Cyber Liability Insurance: Protection for data breaches or cyber-attacks if your business handles customer data, uses POS systems or processes payments online.

Employment Practices Liability: One of the most overlooked coverages. Crucial for any employer, especially in an industry with high employee turnover.

Umbrella Policy: Consider additional coverage for liability claims exceeding the limits of your existing policies.

2. Evaluate Coverage Limits

Business Growth: Has your revenue or employee count increased? Ensure coverage reflects current business size.

Property Value: Verify that coverage accounts for renovations, expansions, or upgraded equipment.

3. Update Business Information

Operational Changes: Report any significant changes such as new services (e.g., catering, delivery), extended hours, or new locations.

Employee Changes: Update the insurer with accurate staff numbers and roles.

4. Safety and Risk Management Practices

Fire Safety: Ensure Fire Suppression systems and fire extinguishers serviced, hoods professionally cleaned and Central Station Alarms active.

Health and Safety Protocols: Ensure compliance with health inspections, food safety standards, and employee training on hygiene.

Employee Training: Provide updated employee handbook and implement training on safety, harassment, and other risks to minimize workplace incidents.

5. Professional Review: Have a trusted insurance broker or legal advisor review the policies for any issues or overlooked risks. You should choose someone that specializes in the hospitality industry and is familiar with the risks associated with your business.

By following a due diligence checklist, you can ensure that your restaurant is adequately covered and protected against potential risks during the insurance renewal process.

John R. Russo, KJE Insurance Services

[email protected]

www.KJEInsurance.com

(212)786-2018