National Restaurant Association

Making sure you have the insurance you need is important. Do you have "business interruption" or "loss of income" coverage? This covers the restaurant for the profits it would have made if it had not had to close because of the disaster. This type of insurance can also enable a closed restaurant to continue to pay its key employees.

A similar type of insurance, called "extra expense," covers a restaurant for the extra money it might have to spend, beyond its ordinary operating expenses, to stay open despite having suffered damage from a disaster.

Generally, the property insurance carried by a restaurant covers the building, if owned by the restaurant, and all its contents, such as the restaurant's equipment and its stock.

But there are a couple of things that restaurateurs often overlook when it comes to buying insurance. One is to cover what the insurance industry calls "improvements and betterments "basically the remodeling and decoration restaurateurs do to turn a leased space into a unique restaurant. Another is to cover the value of any fine art a restaurant has on display.

You should also look at another type of coverage if you own the building your restaurant is housed in, especially if it is old. In the event that the building has to be rebuilt or repaired, "law and ordinance" insurance will cover any extra costs of meeting present-day building codes.

The key is to know exactly what you have in your restaurant and what you are willing to risk. For example, fine-dining restaurants often forget to include the value of their wine cellars.

One way restaurateurs can balance risk against saving money on the insurance premiums is to take a high deductible. Generally, deductibles range from $500 to $5,000, and the higher the deductible, the lower the cost of the insurance.