Can Restaurant Insurance Help if a Water Main Breaks?

All of a sudden, there's no water pressure in your restaurant. You cannot run water to prep food, wash hands, run bathrooms or clean up. Your equipment, which may rely on steam heating, may not be working either. It's all because of a water main break located outside of your restaurant. You had no way of knowing there was a risk, and the city didn't either.

Who is responsible for this risk? Will your business insurance help to cover your losses from being unable to operate? If you have the right restaurant insurance, you may have some of the help you need.

Business Interruption Insurance

A key component of your restaurant insurance should be business interruption insurance. This type of policy helps compensate you for losses sustained because you cannot operate your business due to an unavoidable risk. A water main break may be one of those risks. This type of insurance can help you to pay your vendors, pay your employees, cover your spoiled food or inventory and help you with other financial loss you suffer because your business cannot operate. It's an excellent tool in times of need; but is it enough?

Do You Need Additional Coverage?

You may wish to extend your business insurance further than this. Some companies offer extra protection through utility interruption insurance. This type of policy can help in the event of water main breaks and other utility line breakdowns. It may cover direct damage associated to your property as a result of the interruption, such as parking lot cave-ins from water line breakage, and it can extend basic business interruption insurance to meet longer term needs.

As a restaurant, you know that the hours you are open are vital. Take a look at your existing restaurant insurance policy. Find out what it covers and how much of a limit that policy offers. If you do not have protection from utility interruptions, it may be a good time to look for more comprehensive coverage that meets your needs. Your insurance should help you recover from all risks associated with operating your business.