Business Owners Policy for Restaurants

A restaurants business owners policy (BOP) bundles general liability, commercial property, and business interruption coverage into one policy designed for small-to-mid-size food-service operations. Most full-service and quick-service restaurants with under $5 million in annual revenue and a single location qualify. BOPs typically cost $1,200–$4,500 per year for a restaurant, depending on seating capacity, alcohol service, and loss history.

Who this is for: Independent restaurant owners, café operators, food truck owners who park at a permanent location, and franchise unit operators looking to consolidate core coverages into one manageable policy.

TL;DR — Key Takeaways

A restaurant BOP bundles general liability (typically $1M/$2M), commercial property, and business interruption into one policy at a lower combined cost than buying each separately.
Restaurants that serve alcohol must confirm their BOP includes or is endorsed with liquor liability — most standard BOPs exclude it.
Equipment breakdown coverage (walk-in coolers, commercial ranges, POS systems) is a critical add-on most carriers include or offer as a BOP endorsement for restaurants.
Food spoilage and food contamination coverage can be added to a restaurant BOP for as little as $200–$600 per year extra — it pays for spoiled inventory and closure costs if a health department shuts you down.
A BOP does not replace commercial auto, workers' compensation, or employment practices liability — those require separate policies.

What a Restaurant BOP Covers (and What It Doesn't)

Standard Inclusions

Coverage Component	What It Pays	Typical Limit
General Liability (GL)	Third-party bodily injury & property damage (slip-and-fall, food-served injury)	$1M per occurrence / $2M aggregate
Commercial Property	Building (if owned) or tenant improvements, equipment, inventory	Varies; typically $50K–$2M+
Business Interruption	Lost net income + continuing expenses during covered property loss	12–18 months; sub-limit applies
Products & Completed Operations	Liability for food or beverage prepared and served	Included in GL aggregate
Fire Legal Liability	Damage to leased premises caused by your fire	Often $100K–$300K sub-limit

Common Restaurant-Specific Add-Ons / Endorsements

Add-On	Why Restaurants Need It	Typical Added Premium
Liquor Liability	Required if you sell or serve alcohol — excluded from standard GL	$400–$1,200/yr
Equipment Breakdown	Covers mechanical/electrical failure of commercial kitchen equipment	$150–$400/yr
Food Spoilage	Pays for spoiled perishables after power outage or equipment failure	$200–$500/yr
Food Contamination / Product Recall	Closure costs, crisis management, third-party illness claims	$300–$800/yr
Hired & Non-Owned Auto	Delivery drivers using personal vehicles	$200–$600/yr
Employment Practices Liability (EPLI)	Wage claims, harassment, wrongful termination	Separate policy or endorsement

What a Restaurant BOP Does NOT Cover

Workers' compensation (required by statute in nearly every state [verify state])
Commercial auto for owned vehicles (e.g., a company delivery van)
Professional liability / errors & omissions
Cyber liability (standalone policy recommended for online orders / POS data)
Umbrella / excess liability (separate policy that sits over the BOP's GL)
Flood and earthquake (generally excluded; separate policies available)

How Much Does a Restaurant BOP Cost?

Premiums vary based on annual revenue, seating capacity, whether you serve alcohol, your kitchen's cooking equipment (deep fryers vs. simple prep), and your claims history.

Restaurant Type	Annual Revenue	BOP Estimated Range
Coffee shop / café (no alcohol)	Under $500K	$900–$1,800/yr
Fast-casual / counter-service	$500K–$1.5M	$1,200–$2,500/yr
Full-service restaurant (beer/wine)	$1M–$3M	$2,000–$4,000/yr
Full-service restaurant (full bar)	$2M–$5M	$3,500–$6,500/yr (with liquor liability)
Food truck (at fixed location)	Under $500K	$1,500–$3,500/yr

Ranges are illustrative industry estimates as of 2026. Your actual premium depends on carrier underwriting, location, deductible selected, prior losses, and applicable endorsements. Request a quote for exact figures.

Key premium factors: - Cooking equipment: Deep fryers and open-flame grills drive fire-risk surcharges. - Hours of operation: Late-night service (past midnight) often triggers an underwriting question. - Alcohol revenue percentage: Carriers ask what share of revenue comes from alcohol — exceeding 50% may push a restaurant out of BOP eligibility into a specialty program. - Prior losses: A single fire or slip-and-fall claim in the last three years will affect pricing; two or more may limit carrier options.

Who Qualifies for a Restaurant BOP?

Most admitted-market BOPs (Hartford, Travelers, Nationwide, Hiscox, and others) use eligibility criteria that include:

Annual revenue typically under $5–10 million (carrier-specific)
Three or fewer locations under common ownership
No entertainment (live bands, dancing) at the location — this often pushes to surplus lines
No delivery fleet of owned vehicles

Restaurants that fall outside these thresholds — high-volume nightclubs with kitchens, operations with multiple owned vehicles, catering-heavy operations exceeding revenue caps — typically move to a commercial package policy (CPP) where coverages are individually rated.

How to Get a Restaurant BOP in 5 Steps

Gather your business information. Collect your square footage, seating capacity, gross annual revenue, construction type (frame vs. masonry), cooking equipment list, and any prior claims for the last five years.
Decide on your deductible. Most restaurant BOPs offer property deductibles from $500 to $5,000. A higher deductible lowers your premium but increases your out-of-pocket cost on a claim — $2,500 is a common balance for mid-size restaurants.
Request quotes from multiple carriers. An independent agency (like Morrow) submits your application to multiple admitted and surplus-lines carriers simultaneously. Do not accept the first quote without comparing at least two to three options.
Review the endorsements. Confirm whether liquor liability, equipment breakdown, food spoilage, and food contamination are included or need to be added. Read the exclusions section of the quote for any restaurant-specific carve-outs.
Bind coverage and set up your certificate of insurance (COI). Your landlord, franchise agreement, lender, or health department may require a COI naming them as additional insured. Confirm your agency can produce COIs same-day.

Real-World Example: Slip-and-Fall + Walk-In Cooler Failure

The following is an illustrative scenario, not a guarantee of coverage or outcome.

Background: A 60-seat Italian restaurant in suburban Ohio generates $1.1 million in annual revenue, serves beer and wine (alcohol represents 22% of revenue), and operates a single location in a leased commercial space.

Policy in place: BOP with $1M/$2M GL, $350,000 commercial property (tenant improvements + equipment), 12-month business income, $100,000 fire legal liability, plus liquor liability and equipment breakdown endorsements. Total annual premium: approximately $3,100.

Incident 1 — Slip-and-fall: A customer slips on a wet floor near the host stand and fractures a wrist. Medical bills total $18,000; the customer retains an attorney and the claim settles for $42,000. The BOP's general liability pays the settlement and $11,000 in defense costs. Out-of-pocket: $0 (within limits; no GL deductible applied).

Incident 2 — Walk-in cooler failure (same year): A compressor fails overnight. By morning, $9,200 worth of meat, dairy, and produce is unsalvageable. The equipment breakdown endorsement pays the repair cost of $4,800; the food spoilage sub-limit (added for $280/year) covers $8,500 of the $9,200 inventory loss (subject to a $500 deductible). Out-of-pocket: $1,200 ($500 deductible + $700 above the spoilage sub-limit).

Takeaway: Without endorsements, the cooler repair and spoilage would have been fully out-of-pocket. The combined endorsement cost of roughly $680/year paid back more than 20x in this scenario.

Frequently Asked Questions

Does a restaurant BOP include liquor liability? No — standard BOPs exclude liability arising from the sale or service of alcohol. If your restaurant sells or serves beer, wine, or spirits, you must add liquor liability as an endorsement or buy a separate dram shop policy. Liquor liability is required by many lease agreements and is essential in states with dram shop liability statutes.

Is a BOP cheaper than buying commercial property and general liability separately? Yes, in most cases. Insurers package the coverages together at a discount — typically 10–20% less than buying each line independently. The discount exists because the insurer retains more premium across multiple lines of business with one customer.

What is the minimum general liability limit available on a restaurant BOP? Most carriers offer $300,000 or $500,000 per occurrence as a minimum, but $1 million per occurrence / $2 million aggregate is the industry standard and is required by most commercial landlords. Higher limits ($2M/$4M) are available for larger operations.

Does a restaurant BOP cover food delivery drivers? Only if you add hired and non-owned auto (HNOA) coverage. Standard BOPs do not cover auto liability arising from employees or contractors using their personal vehicles to deliver for your restaurant. If you use a third-party delivery platform (DoorDash, Uber Eats), those drivers operate under the platform's coverage — but your own staff making deliveries are not covered without HNOA.

Does business interruption coverage kick in after a health department closure? Standard business interruption under a BOP covers lost income only when triggered by a covered property loss (fire, storm, equipment breakdown — if that endorsement is included). A health department closure due to a contamination event or failed inspection is typically not covered unless you have added a food contamination / civil authority endorsement. Read your policy's trigger language carefully.

Can a food truck get a BOP? Yes — many carriers offer BOPs designed for food trucks, especially those that operate at a fixed or semi-permanent location. However, food trucks that operate from a moving vehicle for most of their business may need a commercial auto policy as the primary coverage, with GL and property coverage added separately or via a specialty mobile food vendor program.

How quickly can I get a certificate of insurance (COI)? An experienced independent agency can typically issue a COI within hours of binding coverage — and often same-day. If you are signing a lease or entering a new venue, confirm your agency's COI turnaround before you commit to a timeline.

What happens if I add a second location? Adding a second location usually requires an endorsement or a mid-term policy change. Some carriers allow two or three locations on one BOP; others require a commercial package policy (CPP) for multi-location operators. Notify your agent before you open — operating an unlisted location can create a gap in coverage.

Why Morrow for Your Restaurant BOP

Independent agency, multiple carriers. Morrow is an independent commercial P&C agency [Morrow to confirm: carrier appointments], which means we shop your restaurant across multiple admitted and specialty markets — not just one captive carrier's rate.
Restaurant industry specialization. We understand the difference between a beer-and-wine café and a full-bar operation, and we know which carriers offer the best pricing for each. We ask the right questions upfront so your coverage is not missing a critical endorsement at claim time.
Same-day COIs. Landlords, franchisors, and event venues need certificates fast. Our agency issues certificates of insurance the same business day coverage is bound.
Claims advocacy. If a claim is disputed — especially a liquor liability or food contamination claim that a carrier wants to deny — Morrow advocates on your behalf and escalates to the carrier's management if needed.
Annual coverage reviews. Revenue grows, equipment is replaced, and seating capacity changes. We review your policy at each renewal to make sure your property limits and business income period still match your actual operation.

Get a Quote

Ready to protect your restaurant? Request a restaurant BOP quote from Morrow in minutes. We compare multiple carriers and identify every endorsement your operation needs before coverage is bound.

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Call or email our commercial team: [Morrow to confirm contact info]

Trust Strip: Morrow (Afthonea Inc., DBA Morrow) is a licensed independent commercial P&C insurance agency [Morrow to confirm: licensed states and license numbers]. We place coverage with admitted and surplus-lines carriers rated A- or better by AM Best [Morrow to confirm carrier list]. Reviews: [Morrow to confirm review platform and rating].

Author: Content reviewed by a licensed commercial P&C insurance specialist with experience in food-service industry placements. [Morrow to confirm named author and credentials for E-E-A-T compliance.]

Published: June 2026 Last Updated: June 2026

Sources: - Insurance Information Institute (III) — businessowners policy guidance - National Association of Insurance Commissioners (NAIC) — commercial lines market data - National Restaurant Association — industry loss statistics and risk benchmarks - Insurance Services Office (ISO) — BOP program eligibility guidelines (ISO BOP form BP 00 03) - Occupational Safety and Health Administration (OSHA) — restaurant workplace hazard data - Individual state departments of insurance (varies by state) — dram shop liability statutes and workers' compensation thresholds [verify state for specific requirements] - AM Best — carrier financial strength ratings methodology