The building (if owned), kitchen equipment, furniture, fixtures, inventory, and signage against fire, theft, vandalism, and certain weather. Often bundled with business interruption for lost income.
Reviewed by a licensed commercial insurance agent. Last updated .
Commercial property insurance protects your physical assets — building, kitchen equipment, fixtures, inventory, and signage — against covered perils like fire, theft, and vandalism. Many policies add business interruption to replace lost income during a covered shutdown. It does not cover equipment that fails from internal breakdown, or liability claims.
What it covers
The building (if owned), kitchen equipment, furniture, fixtures, inventory, and signage against fire, theft, vandalism, and certain weather. Often bundled with business interruption for lost income.
Who needs it
Every restaurant with physical assets, owned or leased. Owners insure the structure; tenants insure their equipment, build-out, and contents. Frequently required by landlords and by SBA or equipment lenders.
Typical cost
Industry estimates put standalone restaurant property near $150/month, but most restaurants buy it inside a BOP, which bundles it more cheaply. Equipment-breakdown coverage runs roughly $150–$500/yr as an endorsement (industry estimates, not a carrier median).
Varies by state?
Not materially — rates vary by location, not by statute.
What standard property will not do
Standard property covers damage from an outside peril like fire or theft — not a compressor, walk-in cooler, or HVAC unit that fails from internal mechanical or electrical breakdown. That needs separate equipment-breakdown coverage, which usually also pays for the food that spoils during the outage. Flood and earthquake are also standard exclusions and require their own policies.
Business interruption is what saves you after a fire
The coverage that actually keeps a restaurant alive after a fire is business interruption — it replaces lost income during the rebuild, but only for perils the policy covers. Watch two details: replacement cost versus actual cash value on used kitchen equipment (ACV pays depreciated value, leaving a gap), and the waiting period before income coverage begins.
Tenants still need their own coverage
A landlord’s policy covers the shell, not your build-out. Tenants need property coverage for their own tenant improvements and betterments and their contents — the hood, the walk-in, the millwork you paid to install.
What owners don’t expect
•Internal equipment breakdown is excluded from standard property — buy equipment-breakdown coverage separately.
•Business interruption, not the property limit itself, is what replaces income after a covered shutdown.
•Flood and earthquake are standard exclusions requiring separate policies.
•Replacement cost vs. actual cash value on used equipment can be the difference between whole and out-of-pocket.
•A tenant’s policy must cover improvements and betterments; the landlord only insures the building shell.
Common questions
Does restaurant property insurance cover a broken walk-in cooler?
Only if the damage came from a covered peril like fire or theft. A cooler, compressor, or HVAC unit that fails from internal mechanical or electrical breakdown is excluded from standard property coverage. That needs separate equipment-breakdown coverage, which usually also pays for the food that spoils during the outage.
Equipment breakdown is inexpensive relative to what a failed walk-in costs in lost inventory and downtime, which is why it is one of the most commonly added endorsements.
How much is commercial property insurance for a restaurant?
Industry estimates put standalone restaurant property near $150 per month, but most restaurants buy property inside a business owner’s policy, where bundling it with liability is more cost-effective. Equipment-breakdown coverage typically adds roughly $150 to $500 a year as an endorsement. These are industry estimates rather than a single carrier median.
Because property rates depend heavily on location, construction, and catastrophe exposure, a quote for your specific building is the only reliable number — the ranges above are for setting expectations.
Does restaurant insurance cover lost income if I close after a fire?
Only if you carry business interruption coverage, which is often included in or added to a property policy or BOP, and only for a peril the policy covers. It replaces lost income during the restoration period after something like a fire. Check the waiting period before coverage begins and whether floods or pandemics are excluded.
Business interruption is frequently what actually saves a restaurant after a major loss — the building can be rebuilt, but payroll and rent do not pause while it is. Confirm it is on your policy, not assumed.
Is flood damage covered by restaurant property insurance?
Generally no. Flood and earthquake are standard exclusions on commercial property policies and require separate coverage, such as an NFIP flood policy or a specialty endorsement. If your location is in or near a flood zone, this is a gap worth closing deliberately rather than discovering after a storm.
Lenders often require flood coverage in mapped flood zones anyway. Ask your agent to check your flood-zone designation when the property policy is written.
Cost examples are illustrative national figures gathered from public filings and industry surveys. They are not quotes. Your actual premium depends on your state, carrier, revenue, payroll, location, and coverage selections. Restaurant Insurance Authority is an insurance marketing and referral service, not an insurer or licensed agency. We connect business owners with licensed independent commercial-lines agents who specialize in food and beverage. Questions? Call (855) 480-1410.
Talk to an agent who insures food & beverage every day
A licensed commercial-lines agent who specializes in restaurants and bars will review your coverage, close the gaps that catch owners, and show you what a program actually costs — before anything is bound.