Restaurant and bar insurance: what the law requires, what it does not, and what to check

In the UK only employers' liability (at least £5 million) is compulsory for most venues with staff. Everything else is a choice, and the bigger risk is usually a sum insured that no longer matches what it would cost to rebuild.

By Eliana Conti

Customer success

Monday, 10 August 2026 5 min read

Illustration of an open umbrella sheltering a doorway and a table laid for dinner, with rain falling outside

Insurance is the bill most owners renew on autopilot. It arrives once a year, it is rarely read in full, and the only time anyone studies it properly is the day something goes wrong. This post is about doing that reading a little earlier: what you must have, what you may want, and where the quiet gaps tend to sit.

The one policy the law insists on

If you employ people, you need Employers’ Liability (EL) insurance. GOV.UK is plain about it: you need it as soon as you become an employer, with cover of at least £5 million, from an authorised insurer. You can be fined £2,500 for every day you are not properly insured, and a further £1,000 if you do not display the certificate where employees can read it or will not show it to an inspector.

The rule comes from the Employers’ Liability (Compulsory Insurance) Act 1969. The HSE’s guide to the Act adds two details worth knowing. The £5 million minimum includes legal costs, and in practice most insurers offer at least £10 million. It also notes that the exemption for family employees does not extend to family businesses run as limited companies, so check your own position rather than assuming.

Business.gov.uk lists employers’ liability and motor insurance (if you use vehicles for the business) as the covers you are legally required to hold. For a pub or restaurant with a delivery bike or a van, that second line matters.

What is optional, and still worth a look

Public liability, which covers claims from customers and other third parties, is described by the HSE as generally voluntary. In a venue where people carry hot plates past strangers and wet floors meet busy evenings, most owners treat it as a given, and landlords, councils and event organisers often ask for proof of it. The same business.gov.uk page describes the other usual suspects:

Product liability, for claims that something you sold caused illness or injury. For a kitchen, that is food.
Business interruption, which protects income if a covered event such as a fire or flood stops you trading.
Cyber insurance, for data breaches and hacking, relevant if you hold customer details or take bookings online.
Property cover, buildings if you own them, contents and stock whoever does.

None of these is mandatory. Whether you need each one depends on what you would do if the worst happened and you had to pay for it yourself.

How premiums have moved

Be wary of anyone quoting a typical premium for a restaurant. Prices depend on fire risk, location, claims history, turnover and the sums insured, and we could not find an official hospitality-specific figure to give you.

What is sourced is the direction of travel in the wider market. Aon’s August 2026 analysis of commercial property claims says UK commercial property gross written premiums grew by nearly 8% over 2025, which it ties largely to rebuild-cost inflation. That is premium income across the market rather than the price of one policy, so treat it as a signal, not a quote. The same article says hospitality and leisure are still seeing elevated claims from vandalism, escape of water and fire in partially occupied or high street premises.

Aviva’s Broker Barometer 2026 describes a soft market, meaning insurers are competing for business, which can help at renewal. The catch is in the next finding.

The real exposure: being underinsured

Aviva’s review of commercial property covers written in 2025 found 67% were underinsured, with an average shortfall of 79% between the sum insured and the estimated rebuild cost. 68% of the brokers it surveyed reported more claims being declined or settled for less because of underinsurance. Aon says sources suggest nearly 80% of UK commercial properties could be underinsured, and that insurers are leaning more on average clauses (where a claim is cut in proportion to how far you were underinsured).

For a leaseholder the building may not be yours to insure, but the same logic applies to the fit-out, the kitchen equipment and the stock. A kitchen refit priced five years ago is not the kitchen you would be buying today.

What to check in your policy

Read your schedule with a pen and these questions:

Is the sum insured current? Ask for a reinstatement or replacement valuation rather than rolling last year’s number forward. Aon notes insurers are asking for up-to-date reinstatement cost assessments.
How long does business interruption last? Aon suggests a minimum 24-month indemnity period, because a sizeable loss is unlikely to be fully reinstated within 12 months. A kitchen fire that closes you for a year with a 12-month limit leaves no margin.
What triggers a payout? Business interruption pays for events the policy names. Read the list, then compare it with the closures you can actually imagine.
What protections does the insurer expect? Aon says insurers are setting tougher requirements on flood, storm and fire protection, and on vacancy and leak detection. If your policy lists conditions, such as maintained alarms or extraction cleaning, keep the records.
Is the EL certificate displayed, in date and at £5 million or more? This is the easy one, and the one with a daily fine attached.
Do the limits on public and product liability suit your busiest night? A single claim from a crowded Saturday is the case to price against.

A broker can do much of this for you, but only if you tell them what has changed: a new kitchen, an outdoor area, late opening, delivery, events.

What we could not verify

We could not find an official UK source for average premiums by venue type, so we have not printed one. If a broker quotes you a benchmark, ask where it comes from.