Small restaurants are facing significant risks that could threaten their survival. As the industry grows more complex, many of these establishments are finding themselves underinsured, leaving them vulnerable to various threats. This issue is highlighted in a recent article by Manal Ali, published on March 12, 2025, in partnership with Victor Insurance.
Independent restaurants have always had a lot on their plates—kitchen fires, workplace injuries, and the risk of foodborne illnesses. Unlike larger chains, they often lack the financial resources to recover from major disruptions. Many owners believe they are adequately covered with a business owner’s policy (BOP), which usually includes general liability and property insurance. However, experts warn that a standard BOP may not address all the risks these businesses face today.
Kate Trask, a Senior Product Manager at Victor Small Business, points out that small restaurants are often seen as easy targets for cybercriminals. She emphasizes that many owners mistakenly think cyberattacks only happen to big corporations. In reality, hackers are aware that small businesses may not have the same level of security, making them ripe for exploitation. A cyberattack could result in stolen credit card information or a locked-down point of sale (POS) system, leading to severe financial losses.
Leslie Downs, Strategic Partnerships Manager at Victor Small Business, stresses the importance of workers’ compensation insurance. Even if it’s not legally required in some states, restaurants should consider the high risk of injuries in their environments. She also notes that as businesses evolve, their insurance needs change. For example, a café that adds deep-frying to its menu may increase its fire risk and need to adjust its coverage accordingly.
The rise of digital payments and online services has made restaurants particularly susceptible to cyber threats. While physical risks remain a concern, cybercrime is rapidly becoming a top danger for small restaurants. Many owners do not realize the extent of this threat and may lack the necessary cyber liability insurance. This oversight could lead to enormous financial burdens if a breach occurs.
Brokers play a crucial role in helping restaurant owners understand their risks. Many small restaurant owners may not fully grasp their exposure to various threats. They often rely on brokers to educate them about potential vulnerabilities and ensure they have the right coverage. Downs suggests that brokers should visit local restaurants to assess their operations firsthand. This approach allows brokers to better understand the restaurant’s needs and recommend appropriate coverage.
Annual policy reviews are essential, according to Trask. Regular assessments can help identify gaps in coverage before they lead to costly claims. By taking a proactive approach, brokers can help protect small restaurants from the risks that could potentially shut them down.
As the restaurant industry continues to face challenges, it’s vital for owners to stay informed and ensure they have the right insurance coverage to safeguard their businesses.