Pizza Shop Insurance
Your pizza parlor needs protection against potential disasters like theft, lawsuits, spoilage, and more.
Written by
Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
Reviewed by
Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.
Running a pizza shop can be rewarding in a number of ways. But it's also a venture that comes with its own unique risks. Pizza shops are vulnerable to many threats daily, ranging from spoiled food to vandalism and beyond.
Fortunately, an independent insurance agent can help get you set up with the right pizza shop insurance. They'll match you to a policy that best covers your unique business. But first, here's a breakdown of pizza shop insurance.
What Is Pizza Shop Insurance?
Pizza shop insurance is a special type of business insurance tailored to meet the needs of pizza shops and their owners. Special types of coverage, such as those that consider food spoilage, are added to the insurance package to provide complete protection. An independent insurance agent can help you find pizza shop insurance in your area.
Why Do I Need Pizza Shop Insurance?
There are a lot of possible scenarios that could lead to costly financial losses for your pizza parlor. Aside from making sure your pizza shop attracts enough business, minimizes expenses, and turns a profit, you also need to consider its various exposures and how to cover them in advance. Accounting for potential losses upfront can save you from paying out of your pocket for disasters later.
Pizza shops face typical risks like fire, theft and vandalism, severe weather, and workplace injuries. But your pizza shop is also at risk for a variety of other threats, such as:
- Food contamination or spoilage
- Delivery car accidents
- Customer injuries on the premises
- Breakdown of ovens, refrigerators, or other kitchen equipment
- Utility interruptions that force your shop to close
- Lawsuits related to serving alcohol
An independent insurance agent can help you build the right pizza shop insurance policy that addresses all of these concerns.
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What Does Pizza Shop Insurance Cover?
Every pizza parlor needs a customized package of business insurance policies to protect against possible financial losses. Commercial property insurance, business interruption insurance, liability insurance, and spoilage insurance are a few of the main types of coverage pizza shop owners need to look into first.
Commercial property coverage for buildings and equipment
Commercial property insurance protects your pizza shop building and everything inside, like equipment and inventory. Suppose you suffer from a disaster like a fire, a tornado, lightning, theft, vandalism, or some other covered event. In that case, this coverage helps pay to rebuild, make repairs, and replace destroyed or damaged furniture, kitchen and office equipment, buildings, inventory, fixtures, and even outdoor tables, umbrellas, and lighting.
If a fire destroys your kitchen or vandals carve obscenities into your tables, it could cost tens of thousands of dollars to pay for the damage out of your own pocket without coverage. But commercial property insurance would help finance your pizza shop's recovery.
Business interruption insurance for shop closures
When you have a property loss, you might also have to close the shop for a while to make repairs, rebuild, and restock lost inventory and supplies. In these cases, having enough business interruption insurance helps replace lost income during the shutdown. It also covers some of your shop's ongoing expenses like rent, employee salaries, utility bills, and more.
You need your ovens, commercial ranges, dishwashers, freezers, and refrigerators to be in good working order at all times if you want to continue to serve high-quality, fresh food. If something essential breaks down due to a power surge, user error, or some other covered event, you could lose income during the downtime and face significant repair or replacement costs. Look into adding equipment breakdown coverage, which protects against costs associated with the sudden and accidental breakdown of machinery and equipment. It pays to repair or replace the equipment, along with business interruption costs.
Commercial liability insurance for potential lawsuits
Commercial general liability insurance protects your business when a third party sues it for personal property damage or bodily injury claims. This coverage can help you cover medical bills for injured individuals, repair or replace third-party damaged or destroyed property, pay for your legal defense if you get sued, and even cover settlement costs you're ordered to pay.
If a server drops a scorching hot pizza on a guest’s lap, causing burns to their legs and ruining their clothes, you could expect to pay for any related medical bills as well as for cleaning or replacing their soiled clothing. But suppose the guest decides to sue you for additional damages due to the trauma caused by the event, as well as ongoing pain and suffering. In that case, you’d need coverage to help pay for your legal defense and any financial payouts.
General liability insurance also covers advertising liability, slander, and libel claims against your pizza shop. Let’s say that while advertising your pizza shop in the local newspaper, you cause "financial injury” to a competitor by unintentionally copying their advertising ideas or infringing on a copyright or slogan. Your general liability coverage would protect you if you got sued for damages as a result.
Spoilage insurance for when food goes bad
Your business relies on the constant availability of fresh ingredients that are highly perishable. A power outage or refrigeration breakdown could lead to a serious financial loss for your pizza shop if any ingredients go bad. Contamination and spoilage coverage is part of your commercial property protection. It pays for specific losses if perishable foods or ingredients get spoiled or contaminated due to a refrigeration breakdown, utility interruption, or some type of foreign substance contamination on your premises.
If your local board of health or another agency forces you to close because of food contamination, your spoilage insurance may cover lost income during the shutdown period, as well as costs for cleaning contaminated equipment and disposing of and replacing spoiled food. Spoilage insurance doesn't protect you when you accidentally serve bad food and a customer becomes ill, whether the contamination occurred on your premises or was because of food purchased from a supplier. This kind of incident is covered under your general liability insurance.
Other Pizza Shop Insurance Coverage to Consider
Aside from major property and liability risks, pizza shop owners will likely need several other insurance policies to protect them from financial harm and unexpected events. Talk to your independent insurance agent about your pizza shop's need for the following types of additional coverage:
- Commercial auto insurance: If you use business-owned vehicles to deliver pizzas, you need commercial auto insurance to protect you from lawsuits related to accidents, as well as to help pay to repair or replace damaged or destroyed vehicles after vandalism, theft, or weather events. However, if your shop's delivery drivers use their personal vehicles, you need hired or non-owned auto liability insurance to pay for related risks.
- Crime insurance: Protects your pizza shop if an employee or a group of employees engage in theft, forgery, or fraud that damages your business.
- Workers’ compensation insurance: Protects your workers from the costs of work-related injuries and illnesses. This coverage pays for medical bills and lost wages for employees who suffer from cuts, burns, slip and fall injuries, repetitive motion injuries, or any other injuries or illnesses related to their work.
- Employment practices liability insurance: Protects you if a current or former employee sues you for discriminatory employment practices, harassment, wrongful termination, etc.
- Liquor liability insurance: Covers costs of lawsuits associated with intoxicated guests who go on to harm others in some way if they order liquor from your pizza shop.
An independent insurance agent can help you complete your pizza shop insurance package with every type of coverage you need most.
How Much Does Pizza Shop Insurance Cost?
The cost of pizza shop insurance depends on the policies you choose, the unique risks your restaurant faces, the value of your inventory and equipment, and other factors like your location, the number of employees, and the size of your establishment.
An independent insurance agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the right choice.
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The Benefits of Working with an Independent Insurance Agent
Independent insurance agents simplify the search to find the right pizza shop insurance. They shop and compare policies from multiple carriers. They’ll walk you through handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.