What insurance is legally required for a restaurant?

Workers’ compensation once the state’s employee threshold is crossed, and commercial auto minimums for business-owned vehicles. General liability, property, and liquor liability are required contractually — by leases, liquor licensing realities, lenders, and franchise agreements — rather than by statute in most states.

Is general liability insurance required by law for restaurants?

Generally no — but nearly every commercial lease requires it with the landlord as additional insured, making it effectively mandatory for restaurants renting space.

Restaurant Insurance Requirements: What’s Actually Mandatory

By Provident Financial Group, a licensed independent insurance agency · Updated September 28, 2026 · How we write and review content

“What insurance is a restaurant actually required to carry?” The honest answer has four layers — state law, your lease, your liquor license, and your lender — and confusing them is how owners end up either under-covered or over-sold. Here’s each layer, clearly. Get multiple quotes within minutes.

US Restaurant Insure connects food service business owners with Provident Financial Group for restaurant insurance guidance. Find answers in our restaurant insurance FAQs.

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Layer 1: What state law requires

Workers’ compensation is the true legal mandate — required in every state we serve once you cross that state’s employee threshold (from the first employee in states like New Jersey and California, at higher headcounts in states like Florida and Georgia). Beyond comp, most states require unemployment insurance and, if you run vehicles, commercial auto at state minimums. Your state’s specifics: see our state pages, e.g. New Jersey, Florida, Texas.

Layer 2: What your lease requires

Nearly every commercial lease mandates general liability — the near-universal ask is $1M per occurrence with the landlord as additional insured — plus property coverage for your improvements. Not law, but you can’t occupy without it: the certificate of insurance is the enforcement mechanism.

Layer 3: What your liquor license expects

If you serve alcohol, liquor liability enters — by statute in a few states (South Carolina mandates $1M for many late-serving establishments), by dram shop reality everywhere else. Our liability guide links every state’s dram shop rules.

Layer 4: What lenders and contracts add

SBA and equipment lenders require property coverage protecting collateral; franchise agreements impose the FDD’s full insurance section (checklist here); delivery platforms and event organizers require liability proof. Each contract you sign is an insurance requirement in disguise — read them together and the “required” package practically writes itself.

Which insurance policy typically responds to eight common restaurant claims, from slip-and-fall to data breach

Frequently asked questions

Is general liability legally required for restaurants?

Not by state statute — but virtually every commercial lease, franchise agreement, and vendor contract requires it, making it mandatory in practice for any restaurant that rents space or signs contracts.

What’s the only insurance restaurants are required by law to carry?

Workers’ compensation, once you cross your state’s employee threshold — plus commercial auto minimums if the business owns vehicles. Everything else is contractual: leases, licenses, lenders, and franchisors supply the rest of the “requirements.”

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Restaurant insurance requirements by state at a glance (2026)

The table below summarizes the legal requirements that most often shape a restaurant’s insurance program in each state where Provident Financial Group is licensed: when workers’ compensation becomes mandatory, where it can be bought, the minimum auto liability limits for any vehicle the business owns (bodily injury per person / per accident / property damage, in thousands of dollars), and whether state law requires licensees to carry liquor liability. Each state name links to our full state guide, which cites the statutes and agency pages behind these entries. For alcohol rules in more detail, see liquor liability and dram shop laws by state.

State	Workers’ comp required for	Where comp is bought	Auto liability minimums (thousands of dollars)	Liquor liability required by state law?
Arizona	Employers with regularly employed workers	Private carriers or self-insurance	25/50/15	No
California	1+ employees	Private carriers or State Compensation Insurance Fund	30/60/15	No (server training mandatory)
Connecticut	1+ employees (no threshold)	Private carriers or self-insurance	25/50/25	No
Delaware	1+ employees	Private carriers	25/50/10	No
Florida	4+ employees (non-construction)	Private carriers	No BI required for standard vehicles; 10 PD plus PIP	No
Georgia	3+ employees, part-time included	Private carriers	25/50/25	No
Indiana	Covered employers, no minimum count found	Private carriers or self-insurance	25/50/25	No
Kansas	Gross annual payroll over $20,000	Private carriers or group self-insurance pools	25/50/25	No
Kentucky	1+ employees	Private carriers or KEMI	25/50/25	No
Maryland	1+ employees	Private carriers or Chesapeake Employers	30/60/15	No (local boards may add conditions)
Massachusetts	1+ employees, no family exemption	Private carriers or self-insurance	25/50/30	Yes: proof of liquor legal liability coverage
Michigan	3+ employees, or 1+ working 35 hrs/week for 13 weeks	Private carriers or self-insurance	50/100/10	Yes: proof of financial responsibility
Nevada	1+ employees	Private carriers or self-insurance	25/50/20	No
New Jersey	Virtually all employers, no threshold	Private carriers or self-insurance	35/70/25 (from Jan 1, 2026)	No
New York	All employees, part-time and family included	Private carriers or NYSIF	25/50/10	No
North Carolina	3+ employees	Private carriers or self-insurance	50/100/50	No
Ohio	1+ employees	Ohio BWC only (monopolistic state fund)	25/50/25	No
Pennsylvania	1+ employees, part-time and family included	Private carriers or SWIF	15/30/5	No
South Carolina	4+ employees (payroll exemption applies)	Private carriers or self-insurance	25/50/25	Yes: licensees selling after 5 p.m.
Texas	Optional for most private employers	Private carriers or Texas Mutual; non-subscription allowed	30/60/25	No
Vermont	1+ employees	Private carriers or assigned risk plan	25/50/10	Yes: licensees must carry it (minimums set by rule)
Virginia	3+ employees	Private carriers	50/100/25	No
Washington, DC	Anyone employed for pay, no threshold	Private carriers or self-insurance	25/50/10	No

Legal minimums are only the starting point. Landlords, lenders, franchisors and event venues usually set their own requirements, often higher, and those contract terms are what most restaurants are actually measured against. Requirements change, so confirm current rules with the state agency before relying on them.