How much does restaurant insurance cost in Ontario?

Publicly reported figures suggest most small restaurants pay roughly $1,000 to $5,000 a year for a package policy. The ranges below build on that reference point. They are rough estimates for a basic package that typically combines general liability, property and contents and some business interruption. They are framed for Ontario businesses and vary widely by city, size and claims history. They are not quotes, and your price can fall outside them.

Business type	Estimated annual premium (basic package)
Café or coffee shop	$1,000 to $4,000
Retail bakery	$1,000 to $5,000
Quick-service or takeout	$1,500 to $5,000
Food truck (excluding commercial auto)	$1,000 to $4,000
Caterer	$1,000 to $5,000
Bed and breakfast	$1,500 to $5,000
Licensed full-service restaurant	$3,000 to $12,000, can be higher
Winery with tasting room	$3,000 to $12,000, can be higher
Brewery with taproom	$5,000 to $15,000, can be higher
Bar or pub	$5,000 to $20,000, can be higher
Nightclub or late-night venue	$10,000 to $30,000, can be higher
Hotel or motel	$10,000 to $50,000, can be much higher

All figures are estimates only. Larger operations, multi-location groups, properties you own rather than rent and businesses with past claims commonly pay more. Commercial auto for food trucks and delivery vehicles is priced separately.

Annual sales

Sales are the main measure of how much activity, and therefore how much risk, your business generates. More customers through the door means more chances for a slip, a burn or a foodborne illness claim. Expect your premium to rise as you grow.

How much of your revenue comes from alcohol

This is often the biggest single factor. A restaurant where alcohol is 15 percent of sales is viewed very differently from a bar where it is 70 percent. Insurers price liquor liability for licensed dining rooms and bars based on the share of alcohol sales, your hours and your type of licence. Server training records help.

How you cook and how you protect against fire

Deep fryers, open flames, charbroilers, wood-fired ovens and woks raise fire risk. A café with a panini press and a quick-service kitchen with four fryers are rated very differently. Insurers want to know that you have a certified fire suppression system over cooking surfaces, that hoods and ducts are cleaned on a regular schedule and that extinguishers are serviced. Missing or outdated suppression can raise the price or make a risk hard to place at all.

Claims history

Insurers usually look back several years. One small claim may not change much, but repeated claims, especially liability or fire claims, tend to raise premiums and narrow your options.

Location

Your city and even your street matter. Local crime rates, fire department response, winter weather, flood exposure and local claim trends all feed into the price. A downtown Toronto unit, a Niagara tasting room and a seasonal Muskoka restaurant are rated differently. Our overview of Ontario regions explains some of these factors.

Building age and construction

Older buildings with outdated wiring, plumbing or roofs cost more to insure. So do wood-frame buildings compared with masonry or fire-resistive construction. If you own the building, its replacement cost is a large part of the property premium.

Limits and deductibles

Higher limits cost more. Many restaurants carry $2 million in general liability, but landlords often ask for $2 million to $5 million, and bars and event venues may need more. A higher deductible lowers your premium but means you pay more out of pocket on each claim. Read about choosing a liability limit your landlord will accept.

Hours of operation

Late nights raise risk. A bar open until 2 a.m. sees more fights, more impaired guests and more incidents in the parking lot than a breakfast spot that closes at 3 p.m.

Optional coverages

Adding cover for failed ovens, coolers and compressors, spoilage, sewer backup, overland flood or cyber coverage increases the premium. Each can be worth it, depending on your operation.

Example: Two 60-seat restaurants in the same city each ask for a package. The first serves brunch and lunch, closes at 4 p.m., sells little alcohol and has a new suppression system. The second serves dinner, runs a busy bar until 1 a.m. and has a fryer line with an overdue hood cleaning. Even with similar sales, the second restaurant should expect a noticeably higher premium, mainly because of liquor sales, late hours and fire risk.

The ranges in the table only go so far. Each kind of operation has its own pressure points:

• Licensed sit-down restaurants pay for liquor service, full kitchens and seating, so they usually sit above cafés and takeout.
• Coverage for pubs and taprooms is driven heavily by liquor liability and late hours.
• Craft breweries with a tasting room combine manufacturing equipment, product liability and taproom liquor exposure.
• Hotels and motels are priced largely on property values, number of rooms and any restaurant or bar on site.
• Coffee shops and cafés tend to sit at the lower end, with espresso equipment and slip and fall as the main concerns.

• Keep fire protection current. Maintain your suppression system, keep hood cleaning records and service extinguishers on schedule.
• Document liquor service. Keep server training certificates on file, use an incident log and have a clear policy for cutting off guests.
• Manage slip and fall risk. Use non-slip mats, clean spills immediately and keep a winter maintenance log for entrances and walkways.
• Choose deductibles carefully. A higher deductible lowers the premium if you can comfortably cover it after a loss.
• Insure to the right values. Overstating values wastes money, and understating them can reduce what you are paid after a claim.
• Bundle coverages. A package policy is usually better value than buying each coverage separately.
• Keep us updated. Tell us about new equipment, renovations, updated wiring or roofs, and changes in sales.
• Shop at renewal. We can take your renewal to several insurers that write hospitality business rather than accepting one renewal offer.

Fill in the form on this page or call us at (416) 346-6886. One of our brokers will ask about your sales, cooking, liquor service and building, then take your application to insurers that suit your operation. We walk you through the differences in plain language, set up the policy you choose, and stay with you for certificates, changes, renewals and claims. The quote is free and there is no obligation.