Independent restaurants are facing significant risks that could threaten their survival, according to a recent report. Published on March 13, 2025, the article highlights the challenges small eateries encounter, from kitchen fires to the rising threat of cybercrime. Many restaurant owners are unaware that they might not have adequate insurance to protect against these dangers.
Small restaurants operate on tight margins and have always had to worry about various risks, including fires, injuries, liability claims, and foodborne illnesses. Unlike larger chains, they often lack the financial resources to bounce back from major setbacks. Experts from Victor Insurance point out that many restaurant owners believe they are covered simply because they have a business owner’s policy (BOP). However, a standard BOP may not cover all the risks they face today.
Kate Trask, a Senior Product Manager at Victor Small Business, emphasizes that many small business owners mistakenly think cyberattacks are only a concern for large corporations. In reality, hackers often target smaller businesses, knowing they may have weaker defenses. If a hacker gains access to a restaurant’s system, they could steal customer information or hold the business ransom, leading to substantial financial losses.
Brokers have a crucial role in helping restaurant owners understand their insurance needs. Many owners do not realize they are underinsured or lack policies that could protect them from significant financial losses. Leslie Downs, a Strategic Partnerships Manager at Victor Small Business, stresses the importance of having workers’ compensation insurance, even if it’s not legally required in their state. The nature of restaurant work involves many risks, and protecting employees is essential.
Another common issue is that restaurant owners often fail to update their insurance as their business evolves. For example, a restaurant that started as a small café may later introduce deep-frying, which increases fire risk. If they begin using delivery services, they might need additional coverage to protect against accidents.
Cybercrime is emerging as a major threat for small restaurants. With the rise of online payments and reservations, these businesses have become easy targets for hackers. Ransomware attacks can paralyze operations, making it impossible to process payments or fulfill orders. Even simple phishing scams can lead to serious breaches, resulting in significant financial damage.
Many restaurant owners do not see cyber threats as a real risk. Without cyber liability insurance, they could face devastating costs if a breach occurs. Experts recommend that brokers take a hands-on approach to assess their clients’ needs. Visiting the restaurant, understanding its operations, and reviewing its online presence can help identify potential risks.
Annual policy reviews should be standard practice for brokers. By regularly examining coverage, brokers can spot gaps before they lead to costly claims. The article serves as a reminder that small restaurants must be proactive in protecting themselves from both physical and cyber threats to ensure their long-term success.