Restaurants in Australia that employ staff generally need workers' compensation insurance for work-related injury or illness, subject to state and territory rules (Safe Work Australia). Other common covers include public and products liability insurance and a business pack, which may combine property, contents, theft and other sections in one policy.
The insurance a restaurant needs depends on legal obligations, business activities and any requirements set by councils, landlords or contracts. Cover depends on the policy and insurer you choose. Check the policy wording and its terms, conditions and exclusions to understand what is and isn't included.
Key takeaways
- Restaurants with employees generally need workers' compensation insurance. Registered vehicles also have compulsory third party (CTP) requirements.
- Councils, landlords and contracts may specify minimum public liability limits.
- A business pack can combine several covers, with optional sections such as machinery breakdown.
- Fridge failures may involve separate cover for machinery, spoiled stock and lost income.
What is restaurant insurance?
Restaurant insurance describes the combination of insurance policies a restaurant may arrange to protect against different business risks. Common covers include public and products liability insurance and a business pack.
Public liability insurance is designed to cover claims if someone is injured or their property is damaged in connection with your business.
Products liability insurance is designed to cover claims for injury or property damage caused by products your business makes, sells or supplies, including food. It is commonly bundled with public liability insurance. Each cover is subject to the policy terms, conditions and exclusions.
What insurance does a restaurant need in Australia by law?
Restaurants with employees generally need workers' compensation insurance. Restaurants that use registered motor vehicles must also meet the relevant compulsory third party personal injury insurance requirements.
According to business.gov.au, the insurance required by law depends on the business and its circumstances. Workers' compensation requirements are administered through state and territory schemes.
| State or territory | Workers' compensation regulator or authority |
|---|
| New South Wales | State Insurance Regulatory Authority (SIRA) |
| Victoria | WorkSafe Victoria |
| Queensland | WorkCover Queensland |
| South Australia | ReturnToWorkSA |
| Western Australia | WorkCover WA |
| Tasmania | WorkSafe Tasmania |
| Australian Capital Territory | WorkSafe ACT |
| Northern Territory | NT WorkSafe |
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Public liability insurance is not a general legal requirement for every restaurant in Australia. However, councils, landlords and other contracting parties may require it.
When do councils and landlords ask for public liability insurance?
Councils may require restaurants to hold public liability insurance before approving outdoor dining, footpath seating or other use of public space. They may also ask for a certificate of currency, which provides evidence of an active insurance policy.
The table below gives examples of council requirements recorded in October 2026. These are not nationwide minimums, and the applicable requirements should be checked directly with the relevant council.
| Who asks | Example requirement (as listed in October 2026) |
|---|
| North Sydney Council (NSW), outdoor dining | Not less than $10 million, or $20 million within State road areas, for the area you intend to use |
| City of Sydney (NSW), outdoor dining | "Applicant must disclose the new or extended outdoor dining to their public liability insurer" |
| Bundaberg Regional Council (Qld), footpath dining | Minimum $20,000,000 |
| City of Onkaparinga (SA), outdoor dining | $20 million |
| City of Unley (SA), outdoor dining | A minimum of $20 million |
| Your landlord, commercial lease | No set figure: check the insurance clause in your lease, which may also ask for glass cover |
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Council evidence requirements can also vary. Examples include:
A landlord may also set a minimum public liability limit in the commercial lease or require other cover, such as glass insurance. You can explore restaurant and cafe insurance or read more about public liability requirements in NSW.
What does public liability insurance cover for a restaurant?
Public liability insurance is designed to respond to claims involving third party injury or property damage connected with restaurant operations.
For example, a customer may slip on a wet floor or suffer an injury when staff accidentally spill a hot drink.
Products liability insurance may be relevant if a customer alleges that food supplied by the restaurant caused food poisoning or an allergic reaction. Cover is subject to the policy terms, conditions and exclusions. Product recall costs are commonly excluded under a product recall exclusion.
| Claim | Hypothetical claims example | Is this covered? |
|---|
| Customer Injury Claim |
A staff member spills a hot drink onto a customer while moving through a crowded service area. The customer alleges burns and ongoing discomfort, then seeks compensation for treatment costs and related financial loss. |
Public Liability insurance is designed to cover third party injury claims and defence costs arising from your business activities. |
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Important: This is a hypothetical claims example only. Cover depends on the policy terms, conditions, limits and exclusions. Speak to your insurance broker or the upcover team about whether a particular claim may be covered.
What can a business pack include for a restaurant?
A business pack combines several types of business insurance in one policy.
Depending on the insurer and options selected, it may include property and contents, theft, money, glass, business interruption and public and products liability insurance. Other sections, such as machinery breakdown and goods in transit, may be available as optional cover.
| Business pack section | What it may respond to |
|---|
| Property and contents | Insured damage to fit-out, stock and equipment |
| Theft | Stock or equipment stolen from your premises, commonly only with signs of forced or violent entry (theft from locked building) |
| Money | Cash takings lost to theft or hold-up, on site or on the way to the bank |
| Glass | Broken shopfront windows, doors and fixed glass signs |
| Machinery breakdown (option) | Sudden breakdown of insured machinery, such as fridges and combi ovens |
| Goods in transit (option) | Loss or damage to goods, such as produce, while being transported |
| Business interruption | Lost income or ongoing costs, such as rent, when an insured event stops you trading |
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Each section has its own terms, conditions, limits and exclusions. For example, business interruption cover commonly requires an insured event to trigger the relevant section. A closure that does not meet the policy's insured-event requirements may fall outside cover.
Restaurant business pack claims examples
A restaurant may experience several different losses, including fire damage to its kitchen, theft of cash takings or damage to ingredients during transport. The following hypothetical examples show where different business pack sections may be relevant.
| Claim | Hypothetical claims example | Is this covered? |
|---|
| Premises Damage Closure |
A grease fire starts on the cook line during service and damages part of the kitchen canopy, ceiling and nearby stock. The venue shuts while repairs are completed, and bookings and regular trade are interrupted across the week. |
Commercial Property Insurance may respond to repair or replacement costs for insured premises, contents and stock damaged by an insured event. Business Interruption Insurance may also respond to income losses and additional costs incurred during the period of closure. |
| Stolen Money |
After breakfast service, the team prepares cash takings for deposit while the venue resets for lunch. Before the deposit is completed, an unknown person enters the premises and steals the cash, creating an immediate shortfall in cash available for day to day operating expenses. |
Money Cover is a benefit commonly included under Business Pack Insurance. It is designed to cover loss of business money while at the premises, in transit, in a locked safe or strongroom, or in the custody of an authorised person. |
| Damaged Delivery Stock |
While collecting fresh produce and ingredients from a supplier, goods are damaged in transit on the way back to the venue. Part of the order is unusable on arrival and replacement stock needs to be sourced urgently to keep the menu running. |
Goods in Transit cover is a benefit available under some Commercial Property or Business Pack Insurance policies. It may respond to loss or damage to your stock or goods while being transported. |
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Important: These examples do not confirm cover for a particular claim. Availability depends on the policy, the sections selected and the applicable terms, conditions, limits and exclusions.
If an incident, complaint or circumstance could lead to a claim, consider notifying your insurer promptly in line with the policy's notification requirements. You do not necessarily need to wait for a formal demand.
You can start a claim through upcover. Admitting liability, incurring costs or agreeing to a settlement before notifying the insurer may affect the claim. The insurer determines whether cover applies.
What do public liability and business pack policies commonly exclude?
Exclusions vary by insurer and policy.
Public and products liability insurance
Common exclusions may include:
- Liability arising from registered motor vehicles, which is generally addressed by motor insurance and relevant CTP arrangements
- Claims arising from dishonest, fraudulent or wilful acts
Business pack insurance
Common exclusions may include:
- Gradual damage, wear and tear, rust, mould, vermin or depreciation
- Cyber incidents or data loss where cyber cover is not included
- Fraud or dishonesty by the insured, while employee dishonesty may be addressed by a separately selected section
Important: These lists are not exhaustive. Refer to the relevant business pack policy terms and speak to your insurance broker or the upcover team about exclusions.
What happens if your cool room or fridge breaks down?
A fridge or cool room breakdown may cause three separate losses: damage to the equipment, spoiled food and interrupted trading. Different policy sections may apply to each loss.
Some restaurant insurance policies offer machinery breakdown and spoiled stock cover, sometimes called deterioration of stock. These sections may have different triggers and exclusions.
| What is lost | Part of the policy to check | What to know |
|---|
| The fridge or cool room | Machinery breakdown section of a business pack | May respond to sudden breakdown of insured machinery; gradual deterioration is commonly excluded |
| The food inside | Spoiled stock cover, where offered | A supply network outage may be treated differently from an on-site breakdown |
| Trade lost during repairs | Business interruption section of a business pack | May respond where the policy extends business interruption to breakdown |
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A sudden mechanical breakdown may be treated differently from gradual deterioration or an electricity network outage. Check whether the relevant sections are included and whether business interruption cover extends to machinery breakdown.
What other insurance might a restaurant consider?
Depending on its operations, a restaurant may consider commercial motor, cyber and management liability insurance.
Commercial motor insurance is designed to cover vehicles used for business, such as delivery vans. A private motor policy may not respond to regular business or delivery use.
Cyber insurance is designed to cover certain costs and claims following cyber attacks or data breaches. It may be relevant to restaurants using online bookings, electronic payments and point-of-sale systems.
Management liability insurance is designed to help protect a business and its directors, officers and managers against certain claims arising from business management. A crime or fidelity section may respond to specified financial losses from employee theft, fraud or forgery.
Each policy is subject to its terms, conditions and exclusions.
What insurance does a restaurant need for its particular setup?
The type of restaurant you operate may affect the risks and insurance requirements. For example, a leased restaurant may face different contractual obligations from a restaurant providing off-site catering or running its own delivery vehicles.
| Your setup | Questions to ask |
|---|
| Leased premises | What limit does the lease set, and who insures the glass? |
| Licensed or BYO | Has your insurer been told about a move from BYO to a liquor licence? |
| Takeaway and delivery | Who insures the delivery vehicle for business use? |
| Off-site catering | Does your public and products liability insurance extend to off-site events? |
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Your public and products liability policy should accurately describe the business activities for which cover is sought. If your restaurant starts offering catering, delivery or another service, consider reviewing the policy schedule with your insurer or broker.
For related businesses, see bars and pubs insurance, bakery and patisserie insurance and market stall insurance.
How much does restaurant insurance cost?
Restaurant insurance costs depend on the business, the cover selected and the insurer's assessment.
Factors that may affect the premium include:
- Business activities and industry classification
- Annual revenue and business size
- The type and value of property and equipment insured
- Coverage limits and optional sections
- Licensing, lease and contractual requirements
- Risk controls, underwriting information and claims history
A restaurant with commercial kitchen equipment, delivery operations and outdoor seating may have different insurance requirements from a small takeaway business. For more detail, read the restaurant and cafe insurance cost guide.
How upcover can help
upcover arranges business pack and public and products liability insurance for restaurants and cafes. It works with more than 80 insurance partners and can arrange quotes from a range of insurers.
- 70,000+ businesses covered across Australia
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Get a quote for your restaurant or cafe.
Frequently asked questions
Is public liability insurance compulsory for restaurants in Australia?
Public liability insurance is generally not compulsory for restaurants under Australian law. However, councils, landlords and contracts may require it. For example, the City of Unley outdoor cafe licence listed a public liability requirement in October 2026.
How much public liability insurance does a restaurant need?
The limit may depend on your council's permit conditions, commercial lease and other contracts. For example, the City of Perth outdoor dining permit listed a $20 million requirement in October 2026. Check the current requirements before deciding on a limit.
Does restaurant insurance cover food poisoning claims?
Products liability insurance is designed to respond to certain claims arising from injury or damage caused by food supplied by a restaurant, including food poisoning allegations. Cover depends on the relevant policy terms, conditions and exclusions.
Does restaurant insurance cover food that spoils in a power outage?
Some business insurance policies offer spoiled stock cover following insured breakdowns. However, an electricity network outage may be treated differently from an equipment failure at the premises. Check the policy's spoiled stock and machinery breakdown sections.
Are delivery drivers covered by restaurant insurance?
Delivery vehicles may be insured under commercial motor insurance. Whether a driver's personal motor policy responds to delivery use depends on its terms. Restaurants should check the insurance arrangements for employees, contractors and delivery vehicles.
Written by upcover's editorial team.
This article provides general information only and does not take into account your objectives, financial situation or needs. It is not legal advice. Workers' compensation schemes, council permit conditions and lease terms vary between states, territories, councils and landlords and can change, so confirm what applies with the relevant regulator, your council and your lease. Insurance availability and cover are subject to underwriting and the terms, conditions, limits and exclusions of the relevant policy. Read the policy wording and its terms and conditions before deciding. For commercial motor vehicle insurance, also read the Product Disclosure Statement (PDS), Target Market Determination (TMD) and Financial Services Guide (FSG). upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.
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