Are Outdoor Dining Spaces Covered by Insurance?

With the onset of the COVID-19 pandemic, many California cities permitted outdoor dining spaces on sidewalks, parking lanes, and other public areas. As a result, numerous restaurant and bar owners made substantial investments in outdoor furniture, heat lamps, and the construction of parklets. Some of our clients have spent tens of thousands of dollars on these outdoor spaces, making “parklet” a common term in today’s restaurant landscape.

At Wang Insurance, we specialize in small business insurance, particularly for the food and beverage industry. We’re here to help you navigate your insurance needs and provide peace of mind, especially when it comes to your outdoor dining spaces. So, what do these outdoor operations mean for your liability and property coverage?

Liability and Property Coverage for Outdoor Dining

The good news is that most insurance carriers are automatically extending coverage to appurtenant structures and seating located within 100 to 1,000 feet of your restaurant or the address listed on your policy. However, coverage details can vary depending on your carrier, so it’s important to verify this with your broker.

Some carriers have distance limitations, while others may impose specific conditions for coverage, such as the use of high-visibility tape or solid barriers around the outdoor dining area. If your parklet or dining area is considered “off premises,” it may be necessary to consult with your underwriter to request a coverage extension or clarify the extent of the coverage.

Updating Your Business Personal Property (BPP) Coverage

Even after ensuring that your liability coverage extends to your outdoor dining space, it’s essential to review and update your Business Personal Property (BPP) coverage. BPP represents the estimated replacement value of the property used in your business. If you’ve recently invested significant amounts in your outdoor space—such as building parklets, adding heat lamps, or purchasing new seating—it’s crucial to update the BPP amount in your policy.

By updating your BPP coverage, you can ensure that, in the event of a covered loss, you’ll be able to recover the full value of your investments, including damage to your parklet or other outdoor structures.

At Wang Insurance, we’re committed to helping you protect your business. Contact us today to discuss your outdoor dining coverage and ensure you’re fully covered.