Are outdoor dining spaces covered by insurance?

In the wake of the COVID-19 pandemic, California cities began allowing outdoor dining spaces in sidewalks, parking lanes, and other public spaces. Many restaurant and bar owners made significant investments in outdoor furniture, heat lamps, and in building parklets. In fact, some of our clients spent tens of thousands of dollars building outdoor dining spaces -- so much so that the word “parklet” has become part of our popular lexicon. 

Wang Insurance specializes in small business insurance -- particularly food and beverage -- and we want to help provide peace of mind during these trying times. What do your outdoor operations mean for your liability and property coverage?  

The good news is that most carriers are automatically extending coverage to appurtenant structures and seating within 100 to 1000 feet of the restaurant premises or location address on the policy. However, we recommend that you check with your broker, since coverage varies from carrier to carrier.

Most carriers have distance limitations (as previously mentioned), while others may have certain conditions before coverage is extended, such as high visibility tape or solid barriers. If your outdoor dining space is “off premises”, we may also need to speak to the underwriter to ask for a coverage extension or clarify how much is covered.

Even after verifying liability coverage, you may need to update your Business Personal Property (BPP) amount -- in other words, an estimated replacement value of the property in your business. If you’ve recently invested thousands (or tens of thousands) more in outdoor dining space (parklet construction, heat lamps, new seating, etc), you should update your BPP amount in your policy. That way, if you experience a covered loss, you will be eligible to recoup the updated amount from property damage to your parklet.