What Insurance Does a Colorado Restaurant Actually Need?
Running a restaurant in Colorado means managing more than day-to-day operations. Between weather exposure, liquor laws, workers’ compensation requirements, and lease obligations, restaurant insurance needs to be set up correctly from the start — and reviewed regularly as the business evolves.
While every restaurant is different, most Colorado restaurants share a common set of insurance needs that help protect the business, employees, and customers.
General Liability: A Requirement for Most Colorado Leases
General liability insurance is the foundation of restaurant coverage in Colorado. It helps protect against third-party claims involving bodily injury or property damage, such as slips, falls, or customer injuries.
Most Colorado landlords require general liability coverage as part of a commercial lease, and minimum limits are often spelled out in lease agreements. This coverage is essential, but it’s rarely enough on its own for food service operations.
Property Insurance: Protecting Buildings and Equipment
Property insurance helps cover damage to owned or leased spaces and business property such as:
Kitchen and refrigeration equipment
Furniture and fixtures
Inventory and food supplies
Point-of-sale systems
In Colorado, risks such as fire, water damage, and severe weather can cause sudden losses. Proper property coverage helps restaurants recover faster and reduce downtime after a covered event.
Workers’ Compensation: Required in Colorado
Colorado law requires most businesses with employees to carry workers’ compensation insurance. For restaurants, this coverage is especially important due to the physical nature of the work environment.
Workers’ compensation helps cover medical expenses and lost wages for employees injured on the job, while also protecting the business from certain lawsuits related to workplace injuries.
Liquor Liability: Critical for Colorado Restaurants Serving Alcohol
Restaurants that serve alcohol in Colorado often need liquor liability insurance to meet state, licensing, or landlord requirements. Colorado’s dram shop laws create potential liability when alcohol service contributes to injury or damage.
Liquor liability coverage is not included in standard general liability policies and must be added separately when alcohol is part of the operation.
Equipment Breakdown: A Common Gap
Equipment breakdown coverage helps protect against mechanical or electrical failure of critical systems, such as refrigeration units, ovens, and HVAC equipment.
In Colorado’s variable climate, equipment strain can be significant. This coverage helps address repair costs, lost inventory, and business interruption that aren’t always covered by standard property insurance.
Commercial Auto: Delivery and Catering Exposure
Restaurants offering delivery, catering, or off-site services may need commercial auto coverage. Personal auto policies often exclude business use, which can create coverage gaps if an accident occurs.
Even limited or seasonal delivery activity can change insurance requirements in Colorado.
Umbrella Liability: Extra Protection for High-Traffic Locations
Umbrella liability insurance provides additional protection above underlying policies like general liability, auto, and liquor liability. Colorado restaurants with high customer volume, alcohol service, or multiple locations often consider this coverage as part of a broader risk strategy.
Why Colorado Restaurants Should Review Coverage Regularly
Restaurant operations change — expanded seating, new delivery options, alcohol service, or equipment upgrades can all affect risk. Colorado insurance requirements can also shift based on licensing, contracts, or employment changes.
Regular reviews help ensure coverage remains aligned with how the restaurant operates today.
Final Thoughts
Restaurant insurance in Colorado isn’t about buying more coverage — it’s about having the right coverage for how your business operates and the regulations you’re subject to.
If you’re opening a restaurant, renewing a policy, or unsure whether your current coverage meets Colorado requirements, a review can help clarify what’s needed.
Contact us to review your Colorado restaurant insurance or discuss coverage options.
