Restaurant and Bar Insurance in Texas

What restaurant and bar insurance covers in Texas

Restaurant insurance in Texas is a package of policies covering the room, the equipment, the food, the staff and everyone served.

What a Texas restaurant carries:

• General liability for the guest who falls, and commercial property for the building, the fit-out and the kitchen equipment
• Business income, which replaces earnings while a closed kitchen is repaired
• Spoilage coverage for food lost when refrigeration or power fails
• Liquor liability, wherever alcohol is served
• Workers compensation, and commercial auto where the business delivers or caters

A business owners policy packages the liability and the property. The rest attach as endorsements or as separate policies.

Liquor liability and the Texas dram shop law

Texas Alcoholic Beverage Code §2.02(b) opens a statutory claim against an alcohol provider only where both elements hold: it was apparent to the provider that the person served was obviously intoxicated to the extent of presenting a clear danger to himself and others, and the intoxication was a proximate cause of the damages.

What that means for a Texas restaurant or bar:

• The claim is brought against the business, not only the drinker
• General liability excludes it for a business that serves alcohol, so liquor liability is bought separately
• Texas Alcoholic Beverage Code §106.14 keeps the employee’s act off the employer only where all three hold: the employer required its sellers to attend a commission-approved seller-training program, the employee attended it, and the employer did not directly or indirectly encourage the violation

Keep the training records. The safe harbor is proved with paperwork, and whether it reaches an incident belongs to the business and its own counsel.

Spoilage, equipment breakdown and the walk-in cooler

Spoilage coverage pays for food lost when refrigeration fails, and it is a common Texas restaurant claim.

How the coverage is put together:

• Spoilage answers the stock itself, usually with its own limit and deductible
• Equipment breakdown answers the compressor, the fryer or the electrical panel that failed
• Business income answers the days the kitchen stays closed during a repair
• Utility service interruption, an endorsement, answers a power failure that started off the premises

A summer outage empties a Texas walk-in cooler within hours. Check whether the form requires the failure to have happened on the premises, because a form commonly does unless the utility endorsement is added.

Workers compensation for a Texas restaurant

Workers compensation is elective for most private Texas employers under Texas Labor Code §406.002, which makes it a decision a restaurant owner has to make rather than a form to sign.

What the decision carries:

• An employer electing not to buy it is a non-subscriber and must notify the Texas Department of Insurance, Division of Workers’ Compensation under Texas Labor Code §406.004
• Texas Labor Code §406.005 requires the employer to tell each employee and to post the notice
• Texas Labor Code §406.033(a) removes three defenses from a non-subscriber sued by an injured employee, and §406.033(d) still makes that employee prove the employer was negligent

Kitchens produce burns, cuts and falls. Aulona Insurance Group places the coverage for owners who elect it, and the election belongs to the business and its own counsel.

What Aulona Insurance Group can place

Aulona Insurance Group places restaurant coverage for Texas food and beverage businesses statewide, through insurers the agency holds appointments with.

Classes the agency writes:

• Restaurants, full service and quick service
• Bakeries, coffee shops and caterers
• Bars and food trucks, with more underwriting questions

Inside the small-business program:

• Annual gross revenue under $5 million, and total W-2 payroll under $5 million
• Workers compensation runs through its own market and is not limited by the revenue and payroll figures above
• Loss history under $20,000, with no more than two incidents in the past three years
• No prior carrier cancellation and no bankruptcy filing

New restaurants are accepted. Luka Cenaj goes through the menu, the alcohol share and the hours on a recorded call.

Where Aulona Insurance Group is not the right fit

Aulona Insurance Group cannot place every Texas food and drink business, and the alcohol share usually decides it.

The food-service lines that have no market here:

• Night clubs, whatever the kitchen looks like, which is the exclusion a late-night bar runs into first
• Gas stations, including the food service attached to one
• A caterer or wholesaler moving non-durable goods as its main trade
• Marijuana and cannabis businesses, edibles included

Revenue, payroll, loss history, a prior cancellation and a bankruptcy filing are the size tests, and the section above states them.

What moves the price of a Texas restaurant policy

The premium on a Texas restaurant policy is set by the insurer, not by Aulona Insurance Group.

What a restaurant submission is priced on:

• Annual sales, and the share of those sales that is alcohol
• The building: age, construction, roof, the hood and duct system, and the county it sits in
• Payroll, which drives workers compensation, and the job classes inside it
• Claim history, where one large liquor claim outweighs several small property ones
• Hours of operation, and whether the kitchen serves past midnight

Aulona Insurance Group publishes no premium on this site and does not rank insurers by price.