What landlords asked our restaurant clients for
The most common request, by far: general liability of $1,000,000 per occurrence and $2,000,000 aggregate, the landlord named as an additional insured, and a certificate of insurance sent to the landlord or property manager. A standard restaurant liability policy or businessowners policy usually covers that as written.
A counter-service ramen and hibachi restaurant in Florida, four employees and no alcohol, had a landlord who required a $5,000,000 umbrella and would not lower it. That limit sits above the instant-issue umbrellas admitted carriers offer a restaurant that size, so it had to go to an excess and surplus lines market. We also asked whether the lease would accept the $5,000,000 in layers, for example $3,000,000 of liability plus a $2,000,000 umbrella.
A BBQ restaurant was told by its landlord, "you have to have building insurance." The quote already carried $75,000 for damage to the rented premises and $50,000 on the restaurant's own equipment and contents. The real question was which of two things the lease meant (see below).
A Florida restaurant with mostly outdoor dining and a bar needed the property company named as an additional insured. Added through a Managers or Lessors of Premises endorsement, it did not change the premium on that quote. The same review caught a liquor liability limit of $100,000; the revised quote carried $1,000,000.
The usual restaurant lease insurance list
Copy each item your lease names into a checklist, with the landlord's and property manager's exact legal names and mailing addresses. Not every lease asks for everything below, and some ask for more; the lease wording decides.
- General liability limits (commonly $1M per occurrence / $2M aggregate)
- Landlord and property manager named as additional insureds
- Damage to rented premises (fire legal liability) limit
- Your equipment, contents, and improvements you paid for
- Business income if a covered loss closes the restaurant
- Liquor liability limit, if you serve alcohol
- Umbrella or excess limit, if the lease names one
- Workers' comp, if you have employees
- Waiver of subrogation and primary, non-contributory wording, if requested
- Certificate deadline, cancellation notice, and renewal evidence
When the landlord says "building insurance"
Landlords mean one of two things. Usually it is coverage for damage you cause to the space you rent, such as a kitchen fire that spreads into the landlord's walls. That is the damage to rented premises limit on your liability policy, and a restaurant policy normally includes it.
Some leases go further and make the tenant insure the building itself, usually in single-tenant or triple-net leases. That is a property policy on the building, priced on its replacement cost, and it is a different quote. Read the insurance section of the lease, not a summary of it, before assuming which one applies.
When the lease limit is higher than the market will write
Some restaurant leases ask for umbrella limits well above the standard $1,000,000; the highest we have seen this year was $5,000,000. For a small restaurant, limits that high can fall outside the umbrella products that quote instantly, and alcohol makes it harder.
There are three ways through it: an excess and surplus lines umbrella, a layered structure that reaches the same total, or asking the landlord to accept a lower limit. Landlords sometimes ask for written evidence that the limit is hard to obtain before they will reconsider, so keep the declinations and quotes your broker collected.
Additional insured, certificate holder, and what it costs
A certificate summarizes insurance information; it does not itself amend the policy. Listing a landlord as a certificate holder does not make that landlord an additional insured. The policy and its endorsement do, most commonly a Managers or Lessors of Premises endorsement for a tenant's landlord.
Many restaurant policies add a landlord as an additional insured at little or no extra premium, and on the Florida quote above it cost nothing. It still depends on the carrier and the wording the lease asks for, so ask before you assume it's free.
Match coverage to possession and work dates
Many landlords want the certificate before they hand over keys, which can be weeks before opening. Build a timeline for taking keys, storing equipment, construction, training, and opening, and tell the broker the date you need coverage to start.
If the landlord asks for cancellation notice, waiver wording, or coverage that applies before other insurance, send the exact request to the broker. Have your legal adviser address anything the insurer cannot meet, and keep the agreed wording and final certificate in the same lease file.
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Use this guide for planning. Confirm requirements and current fees with the agencies serving your address. Coverage depends on the policy and insurer; this guide does not confirm that a particular operation is eligible.