Restaurants and bars require a custom tailored insurance policy to manage the risks unique to their industry. Liquor liability (dram shop) insurance is not the only coverage unique to restaurants; food spoilage, power outage, food contamination, refrigerator breakdown, sign, light poles, satellite dishes/antennas and all other outdoor property needs to be listed.
If the health department forces a shutdown due to a small fire or other cause, there can even be insurance for food and alcohol that the health department says must be thrown out even though it is not contaminated. Furthermore, insurance providing money to advertise to bring customers back after a reputation harming shutdown is available.
Restaurants and bars that cook food with a flame or fryer must have a hood ventilation system over the cooking areas (ansul system) and these systems must be cleaned and the fire extinguishing serviced by a licensed contractor at least every six months according to fire code . Not only does fire code require the servicing but, the insurance policy requires it too. A little known endorsement called the PF-9 protective safeguards endorsement makes it a requirement of the bar or restaurant to comply with fire code, if the restaurant does not follow the servicing schedule and a fire occurs, there will be no coverage for the loss. From IRMI:
“A property insurance endorsement that makes it a condition of coverage that the protective safeguards cited in the endorsement (such as an automatic sprinkler system or night watch guard) be in operation at all times except when the insurer has been notified of the impairment in protection. Failure to maintain the protective safeguards in good working order or failure to notify the insurer of even a temporary impairment in protection suspends coverage until the protection is restored. ”