Planning to Expand? What You Need to Know About Insurance
Expanding your restaurant is an exciting opportunity, but every step forward introduces new risks that can quietly put your business in danger. Many owners focus on the obvious operational and financial challenges while overlooking how expansion affects insurance and liability. The truth is, if your insurance plan was built for one location, it might not be enough to protect your growing business.
Every New Location Creates New Exposures
Growth changes your entire risk profile. More locations mean more opportunities for property damage, customer injuries, liquor liability claims, and employment-related lawsuits. New jurisdictions bring different local regulations, permit requirements, health codes, and alcohol service laws. Even small differences, like adding outdoor seating or live entertainment, can create new types of liability.
Do You Need Separate Policies for New Locations?
In many cases, you can add new locations to your existing insurance policies. General liability, property, workers’ compensation, liquor liability, and even umbrella coverage can often be extended to cover multiple locations under one policy. But this is not automatic. Each new location must be added to your policy’s schedule of locations and underwritten based on its specific exposures.
Some insurers may approve the additional locations easily, while others might require higher premiums, special endorsements, or even separate policies depending on how different the risks are. For example, a new location in a different state, with longer bar hours or new services like catering or delivery, might trigger new underwriting questions.
This is where many restaurant owners get caught off guard. It feels like a simple administrative step to “add the location,” but in reality, your risk profile is changing, and your insurance program needs to evolve with it.
Your Policy Limits May Not Be Enough
Even when you can add new locations to existing policies, you still need to review your limits. Property values, business interruption coverage, equipment protection, and liability limits must be recalculated. If you’re adding a larger space or higher sales volume, your current limits may fall short without an adjustment. Shared limits across locations can leave you exposed if multiple claims happen at the same time.
The Good News: These Risks Are Manageable
Insurance risks during expansion are not a reason to stop growing. But you need to address them early. A thorough insurance review can identify gaps before they turn into costly surprises. Working with experts who understand restaurant risk gives you clarity and confidence to grow while protecting everything you have already built.
Get Expert Advice Before You Expand
Do not try to navigate this alone. Insurance professionals who specialize in restaurant growth can help you structure your coverage properly, avoid costly mistakes, and protect your investment.
Ready to learn more?
Join us at our Ask an Expert event this October to connect with industry professionals who can help you navigate the challenges of expansion.
