At a glance: 4 common types of cover for restaurants
| Cover | Required by law? | What it mainly covers |
|---|---|---|
| Employees' Compensation insurance | ✅ Legally required | Statutory compensation and common law liability when staff are injured at work (burns, cuts, slips, etc.) |
| Public liability insurance | Not compulsory, common practice | Claims from customers or third parties injured on the premises, food poisoning, etc. |
| Property + Business Interruption | Not compulsory, worth considering | Loss of fit-out, kitchen equipment and stock, plus lost income while closed |
| Group medical insurance | Not compulsory, an employee benefit | Staff outpatient / hospitalisation cover; helps with hiring and retention |
1. Employees' Compensation: the one cover the law requires
Under section 40 of the Employees' Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), no employer shall employ any employee unless there is in force a policy of insurance covering the employer's liabilities under the laws (including the common law) — irrespective of the length of the employment contract or working hours, full-time or part-time employment. This is the most common blind spot for restaurants: part-time waiters for the lunch and dinner rush, weekend casual helpers and dishwashers all need to be covered. See our part-time and casual staff guide for details.
The law also sets a minimum amount of insurance cover (per event):
- Not more than 200 employees: not less than HK$100 million
- More than 200 employees: not less than HK$200 million
Failing to secure employees' compensation insurance is an offence: on conviction, the maximum penalty is a fine of HK$100,000 and imprisonment for two years, and a surcharge may also be payable under the Employees' Compensation Assistance Ordinance (Cap. 365). Kitchens come with hot oil, knives and wet floors, so the work injury risk is real — for how cover and premiums work, see our Employees' Compensation guide.
2. Public liability: cover for when customers walk in
Public liability insurance is not required by law, but it is common practice for a restaurant with customers coming through the door every day — a customer slipping on a wet floor, getting scalded by spilled soup, or claiming compensation after feeling unwell from a meal are all third-party liability. Two things are worth checking when choosing a policy:
- Food and drink poisoning — confirm whether the policy covers it; don't assume it does;
- Lease requirements — before signing the lease, check whether the landlord requires tenants to take out public liability cover and a specified sum insured, and have it arranged before opening.
If you also do takeaway, sell bottled sauces or pre-packaged food, product liability is worth thinking about too — see our product liability guide; for choosing a public liability sum insured, see our public liability guide.
3. Property + Business Interruption: fit-out and closure risks
A restaurant's fit-out, ventilation, fridges and cooking equipment are often the biggest spend when opening. Property insurance covers loss of these physical assets; business interruption insurance covers the loss of gross profit and continuing expenses while you're closed because of an insured event (such as fire or flooding). The two are usually considered together, because for a restaurant, the lost income from a few weeks' closure can hurt more than the repairs themselves. Note that not every reason for closure is covered — closures without physical damage, for example, depend on the policy wording. See does BI cover typhoon closures? and our Property + BI guide.
4. Group medical: a tool for hiring and keeping staff
Hiring in F&B has never been easy. Group medical isn't required by law, but many owners use it as an employee benefit to attract and retain chefs and front-of-house staff. Even a small headcount may be eligible — see our group medical guide.
Pre-opening checklist: let's tick through it together
① Employees' Compensation cover is in force before your first employee (including part-timers and casual staff) starts; ② check what insurance your lease requires; ③ confirm your public liability policy covers food and drink poisoning; ④ include your fit-out and kitchen equipment in the property sum insured — for works-period risks during renovation, see our renovation CAR guide; ⑤ update headcount and payroll details at every renewal.
Sources: Employees' Compensation Ordinance (Cap. 282), section 40; Employees' Compensation Assistance Ordinance (Cap. 365); Labour Department, "The Employees' Compensation Ordinance, Cap. 282" FAQ.