Operating a restaurant in Hawaii presents challenges related to the clientele, the landscape, and state regulations. Maintaining adequate Hawaii business insurance is essential for businesses to meet these challenges and mitigate their risk in an evolving restaurant industry.
In this article, we explain the top seven coverages, and break down the best business insurance practices for restaurant owners. By following these practices, businesses can mitigate their specific risks while planning for the future.
General Liability Coverage
General liability coverage protects restaurants from incidents related to daily operations. It is the foundation of an effective insurance profile for businesses in Hawaiʻi, or any state. Robust general liability coverage should include protection against:
- Property damage
- Bodily injury
- Personal injury
- Medical expenses
- Legal expenses
This coverage helps businesses address common liabilities without jeopardizing their financial stability. The first priority for business owners in Hawaiʻi should be to acquire or optimize general liability coverage that meets the needs of their operation.
Property Insurance Coverage
Property insurance safeguards physical assets such as buildings and equipment from risks such as theft, fire, and natural disasters. It is often required for businesses to operate legally. This is especially significant for business owners in Hawaiʻi where natural events such as hurricanes and windstorms pose a threat to properties and other physical assets.
Many business owners purchase adequate coverage but fail to review their coverage needs after they relocate or change their operations. By adapting property insurance coverage to these new conditions, including different threat levels for theft and flooding as well as operational changes, businesses can avoid overpaying in premiums or in claims. For example, if a business chooses to open for an additional season, its property insurance coverage should change to reflect its increased risks.
Workers’ Compensation Insurance
Restaurants in Hawaiʻi are required by law to have workers compensation insurance to cover workers in case of an accident. This insurance also protects the employers from liability. Workers’ comp pays for medical expenses, legal costs, and lost wages in the event of a work-related injury.
Restaurant owners must maintain workers’ compensation coverage to legally operate in Hawaiʻi. However, this type of insurance provides another benefit. By establishing a clear channel of support and reimbursement in case of an accident, restaurant owners hold themselves accountable to their workers’ safety, promoting a safer and more transparent workplace.
Liquor Liability Coverage
Liquor liability coverage is essential for any restaurant that serves alcohol. This insurance protects businesses from claims resulting from incidents related to alcohol consumption, including property damage and bodily injury caused by a customer. Since these claims can involve serious car accidents and other high-value claims, this insurance should be a priority for businesses as they review their coverage.
Business Owner’s Policy
A business owner’s policy allows restaurant owners to combine general liability coverage, property insurance, and other endorsements into one policy. These policies can include industry-specific insurance services that help restaurants lower their risks, creating a lower total cost than buying each policy separately.
Business Interruption Insurance
Businesses in Hawaiʻi can close unexpectedly due to fire, theft, or natural disasters. This causes them to lose income and pay additional operating expenses, which can be a significant financial burden, especially for seasonal businesses. Restaurants benefit from business interruption insurance reimbursing these expenses after unforeseen events.
These costs can include directing operating expenses, repair costs, relocation costs, additional training costs, and more. This coverage is an essential part of running a business in Hawaiʻi where seasonal weather patterns can lead to damaged property and temporary closures.
Commercial Auto Insurance
Most restaurants operate commercial vehicles for deliveries, catering, and more. Commercial auto insurance protects vehicles and drivers from liabilities related to auto accidents. Even personal vehicles may require commercial auto insurance to cover incidents related to business operations.
Best Practices for Obtaining Adequate Insurance
When purchasing or updating business insurance in Hawaiʻi, restaurant owners should:
Assess their risk profiles, factoring in their location, weather, and services to get a broad idea of the coverage they need.- Update safety protocols, including training programs and property repairs, to minimize the risk of injuries for both employees and customers
- Conduct regular policy reviews to make sure the current coverage matches the restaurant’s current operations and risk profile.
- Keep accurate records of inventory, training practices, and maintenance to expedite the insurance claims process.
- Consult with a local agent for coverage that satisfies Hawaiʻi’s legal requirements and considers the business’s specific needs.
Contact Atlas Insurance for Comprehensive Business Insurance Packages
Restaurants in Hawaiʻi must secure adequate insurance coverage to reduce risk, recoup losses, and protect their assets. Adhering to these best practices can help restaurant owners protect their businesses and safeguard their assets from both unforeseen events and predictable risks.
Contact Atlas Insurance today to learn how our local agents can connect your business with comprehensive business insurance plans. For nearly 100 years, businesses in Hawaiʻi have relied on our insurance strategies to obtain the coverage they need.