Restaurant and cafe claims are dominated by kitchen fires and water damage from upstairs neighbours. The closure cost is usually larger than the property damage. Stock spoilage from refrigeration failure is a category in its own right. Here is what matters in restaurant and cafe claims and what your policy probably says.
Most common restaurant claims
Patterns we see week after week:
- Kitchen fires. Extraction failures, unattended cooking, deep-fryer flashovers. Often the largest single cause of restaurant losses.
- Water damage from upstairs. Apartment overflows, leaks from upstairs neighbours, blocked drains in mixed-use buildings.
- Refrigeration failures. Loss of stock when chilled or frozen storage fails outside trading hours.
- Storm and flood. Especially in coastal towns and city-centre flood zones.
- Public liability. Slip and fall incidents, food safety incidents.
Kitchen fire claims
The standard kitchen fire claim engages buildings, contents, and business interruption together. Typical scope:
- Strip-out of damaged kitchen and surrounding areas
- Smoke decontamination throughout the dining areas
- Replacement of stainless steel kitchen equipment
- Re-fit to current HSE and building regulation standards
- Re-decoration of front-of-house
- Stock replacement
- Loss of trading during reinstatement
For the fire-claim specifics, see fire damage claims.
Refrigeration failure claims
A separate section of cover on most commercial policies handles loss of refrigerated stock. Coverage usually requires:
- The failure was sudden, not gradual
- Reasonable steps were taken to mitigate (rapid use of standby refrigeration, etc.)
- The cause was not a power outage outside the policy’s wider business interruption cover
Stock claims of this kind sit alongside the broader stock damage claim framework.
Water damage from upstairs neighbours
This is the most common claim type for cafes and restaurants in mixed-use buildings. The claim is against your own property insurance (escape of water peril) regardless of whose unit the water came from. Recovery against the upstairs neighbour or their insurer is a separate process the loss adjuster typically pursues on the insurer’s behalf afterwards (subrogation).
For the immediate claim, the focus is documenting the damage, securing the trading area, and getting business interruption running.
Business interruption: the closure-cost reality
Restaurant BI claims are particularly important because the daily lost trading on a busy restaurant can be 1,500 to 5,000 euro or more. A four-week closure is a 28,000 to 140,000 euro BI claim before any property damage is considered.
The BI quantum needs:
- Two to three years of management accounts
- Daily and weekly trading patterns
- Seasonal variation evidence
- Continued payroll obligations
- Marketing relaunch costs
We work with forensic accountants on every commercial BI brief.
When to call a loss assessor
For any restaurant or cafe claim above 15,000 euro of property damage or where any closure period applies, the BI side alone usually justifies professional handling. The combined buildings + contents + stock + BI claim typically delivers settlements that comfortably outweigh the fee.
The summary
Restaurant and cafe claims are dominated by kitchen fires and water damage. BI is the largest line item on most. Get the closure period right and the lost margin claimed properly.
Written by the team at N.J. Carroll & Associates, insurance loss assessors and quantity surveyors, established 1988.
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