Running a restaurant is one of the most rewarding — and most demanding — businesses you can own. You are managing a kitchen, a dining room, a staff, and a constant flow of customers, all at the same time. And with that complexity comes real exposure.

A slip-and-fall in the dining room. A kitchen fire that shuts you down for weeks. A customer who claims they got sick from your food. An employee injured during a busy Friday night rush. Any one of these events can cost tens of thousands of dollars — or more — if you are not properly covered.

This guide breaks down the insurance coverages Texas restaurant owners actually need, in plain language.

General Liability Insurance

This is the foundation of any restaurant insurance program. General liability covers third-party bodily injury and property damage claims — meaning injuries or damage that happen to customers or other people on your premises.

Common claims include:

• A customer slips on a wet floor and breaks their wrist
• A server spills hot coffee on a guest
• A customer claims food poisoning after dining at your restaurant
• Your delivery driver damages a customer's property

General liability also covers the legal costs of defending these claims, even if the lawsuit turns out to be frivolous. For most Texas restaurants, a policy with at least $1 million per occurrence and $2 million aggregate is the standard starting point.

Liquor Liability Insurance

If your restaurant serves alcohol — even just beer and wine — you need liquor liability coverage. Texas has dram shop laws that can hold a restaurant legally responsible if an intoxicated customer causes harm to a third party after leaving your establishment.

That means if a customer drinks at your bar and then causes a car accident on the way home, you could be named in the lawsuit. Liquor liability covers those claims and is typically excluded from standard general liability policies.

This coverage is not optional if you hold a TABC license. It is a business necessity.

Commercial Property Insurance

Your building, your kitchen equipment, your furniture, your inventory — all of it represents a significant investment. Commercial property insurance protects those assets against fire, theft, vandalism, and certain weather events.

Pay close attention to what is and is not covered. Standard commercial property policies often exclude flood damage, which is a real concern in Central Texas. If your restaurant is in a flood-prone area, a separate flood policy through the National Flood Insurance Program (NFIP) or a private carrier is worth serious consideration.

Also make sure your policy covers:

• Kitchen equipment (ovens, fryers, refrigeration units)
• POS systems and computers
• Signage
• Outdoor furniture and fixtures
• Tenant improvements if you lease your space

Business Interruption Insurance

A kitchen fire, a burst pipe, a major storm — any of these can force you to close temporarily. Business interruption insurance replaces lost income and covers ongoing expenses (like rent and payroll) while your restaurant is being repaired or rebuilt.

This coverage is often bundled with commercial property insurance in a Business Owner's Policy (BOP), but the limits matter. Make sure your policy covers enough to sustain your operation through a realistic recovery period — for a restaurant, that can easily be three to six months.

Workers' Compensation Insurance

Texas is the only state that does not require most private employers to carry workers' compensation insurance. But for restaurants, going without it is a serious risk.

Restaurant work is physically demanding. Burns, cuts, slips, and repetitive strain injuries are common. If an employee is hurt on the job and you do not have workers' comp, you are personally exposed to the full cost of their medical care and lost wages — and potentially a lawsuit.

Workers' compensation covers:

• Medical expenses for work-related injuries and illnesses
• Lost wages while the employee recovers
• Rehabilitation costs
• Death benefits for the employee's family

Even if it is not legally required, most restaurant owners who understand the risk choose to carry it.

Commercial Auto Insurance

Do you offer delivery? Do employees use their personal vehicles to make supply runs? If any vehicle is used for business purposes, your personal auto policy will not cover accidents that happen during those trips.

Commercial auto insurance covers vehicles owned by the business. If employees use their own cars for deliveries or errands, you also need hired and non-owned auto coverage — this protects the business if an employee's personal vehicle is involved in an accident while on the clock.

Employment Practices Liability Insurance (EPLI)

Restaurants have high employee turnover and a diverse workforce, which creates exposure to employment-related claims. EPLI covers claims of:

• Wrongful termination
• Discrimination (age, race, gender, disability)
• Sexual harassment
• Wage and hour disputes

These claims are more common than most restaurant owners expect, and they can be expensive to defend even when the employer did nothing wrong. EPLI is especially important as your restaurant grows and you add more staff.

Food Contamination and Spoilage Coverage

A power outage that takes out your walk-in cooler. A supplier who delivers contaminated product. A health department closure due to a foodborne illness outbreak. These events can result in significant losses — both in spoiled inventory and in lost revenue during a closure.

Food contamination coverage (sometimes called product contamination or spoilage coverage) helps cover the cost of:

• Spoiled inventory
• Deep cleaning and decontamination
• Lost income during a forced closure
• Crisis management and PR costs in some policies

This is a specialty coverage that is not always included in standard restaurant policies, so ask your agent specifically about it.

Umbrella Insurance

Even with solid underlying coverage, a single catastrophic claim can exceed your policy limits. A commercial umbrella policy provides an additional layer of protection — typically $1 million to $5 million — that kicks in once your underlying policy limits are exhausted.

For restaurants that host large events, have a full bar, or operate in high-traffic locations, an umbrella policy is a smart investment.

How Much Does Restaurant Insurance Cost in Texas?

The cost of restaurant insurance varies based on several factors:

• Type of restaurant — A fast-casual lunch spot has different risk than a full-service steakhouse with a bar
• Annual revenue — Higher revenue generally means higher premiums
• Square footage and location — Larger spaces and urban locations typically cost more
• Number of employees — More staff means higher workers' comp exposure
• Claims history — Prior claims can increase your rates
• Alcohol sales percentage — The higher the percentage of revenue from alcohol, the higher the liquor liability premium

A small Texas restaurant might pay $3,000 to $6,000 per year for a basic package. A larger full-service restaurant with a bar could pay $10,000 or more annually. The right coverage at the right price comes from working with an agent who understands the food service industry.

Working with an Independent Agent

Restaurant insurance is not one-size-fits-all. The right program for a food truck is very different from what a fine dining restaurant needs. An independent insurance agent can shop multiple carriers to find coverage that fits your specific operation — and make sure you are not paying for coverage you do not need or missing coverage you do.

At Silva and Sons Insurance Services, we work with restaurant owners across Liberty Hill, Austin, Georgetown, Cedar Park, and the surrounding Texas Hill Country. We understand the risks you face and the carriers that specialize in food service businesses.

If you are opening a new restaurant, renewing your current policy, or just not sure whether you have the right coverage, we are happy to take a look. Reach out to us for a no-pressure review of your current program.