Opening a New Restaurant

Insurance Process for Your New Restaurant

Man putting on store opening soon sign
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You have finally made the big step towards owning your own restaurant and just signed the lease on a new space. The landlord is about to hand you the keys and asks for your “Certificate of Insurance”. So, what is that and how do you get one?

Very Simply, a certificate of insurance (COI) verifies the existence of an insurance policy. Your lease will typically have some requirements of what types of policies and the level of coverage that the building owner requires.

Keep in mind that a lease is written to protect the Landlord and their investment in the building, not necessarily your best interests. If you are ready to sign a lease, you should speak with an independent insurance broker that will keep the focus on your best interests, not the Landlord’s.

Generally, there are multiple steps to opening your new restaurant. The first step is usually renovation. Depending on the current state of the new space, this may involve complete gut rehab or just some minor decorating to make the place unique. Either way, you will need to have the correct insurance in place to protect your investment during the renovation. The standard restaurant policy will not work in this situation.

A short-term renovation policy may be what you need. This policy will provide you with the general liability required by the lease as well as protect your interests in the renovation. The cost of this policy depends on the cost and type of renovation.

Once the appropriate renovation policy is issued, we can now provide the landlord with the requested Certificate of Insurance. This will allow you to get access to the space and get moving towards your dream.

While the renovation is going on, the next step would be to get your Department of Health license and liquor license. The State Liquor Authority and Department of Health will require you to have workers compensation and disability insurance in place before they issue their respective licenses. These policies are based on the expected employee count and payroll. Since you have not been open yet, it may be a challenge to provide an accurate estimation of payroll. I suggest giving your best conservative estimate to keep initial operating costs low.

Finally, as you are getting closer to your opening day, we should have insurance in place to cover the open restaurant operation. Of course, we’ll have the coverage necessary for the lease as well as protecting your investment in the restaurant. Additional coverage varies depending on type of operation, so best thing to do is set up an on-site meeting to come with a proper plan to protect your investment in your American Dream.

If you recently signed a lease, are planning to or just scouting locations, give us a call and we would be happy to walk you through the insurance process for your new Restaurant.

John R. Russo, KJE Insurance Services

[email protected]

www.KJEInsurance.com

(212)786-2018