What is Contents Coverage?

Contents Coverage, also known as Business Personal Property coverage, is a type of commercial property insurance that protects the movable property and equipment your restaurant owns. This includes all your kitchen equipment (ovens, grills, refrigerators, freezers, fryers, mixers), furniture (tables, chairs, booths, bar stools), point-of-sale systems, computers, dishes, glassware, flatware, linens, decor, inventory (food and beverages), and supplies. Contents coverage pays to repair or replace these items if they are damaged, destroyed, or stolen due to a covered peril such as fire, theft, vandalism, or water damage. Unlike building coverage (which covers the structure itself), contents coverage protects everything inside the restaurant that you could theoretically pick up and move to a different location.

What you need to know

Contents coverage is one of the most commonly undervalued components of restaurant insurance. Many owners base their coverage on rough estimates or outdated equipment values, only to discover after a loss that they’re severely underinsured and can’t afford to fully replace what was lost.

What contents coverage protects

Your policy should cover all movable business property:

• Kitchen equipment—all cooking, refrigeration, food prep, and dishwashing equipment
• Dining room furniture—tables, chairs, booths, bar stools, host stands
• Point-of-sale systems—registers, computers, tablets, card readers, printers
• Dishes and serviceware—plates, bowls, cups, glasses, flatware, serving pieces
• Linens and soft goods—tablecloths, napkins, aprons, kitchen towels
• Decor and fixtures—artwork, lighting fixtures, signage, decorative elements
• Food and beverage inventory—all items in storage, prep, or ready to serve
• Office equipment—computers, printers, filing cabinets, safes
• Cleaning supplies and smallwares—everything needed for daily operations

Common underinsurance scenarios

Restaurant owners frequently discover coverage gaps after losses:

• Basing coverage on purchase price instead of current replacement cost
• Not updating coverage as equipment is added or replaced with more expensive models
• Forgetting accumulated smallwares—thousands of dollars in accumulated plates, glasses, utensils
• Underestimating furniture value—custom booths and quality tables cost far more than owners remember
• Ignoring inventory value fluctuations—holiday inventory levels much higher than baseline
• Excluding recently purchased items—new equipment not yet added to policy

Replacement cost vs. actual cash value

Your coverage type dramatically affects claim payouts:

• Replacement cost coverage—pays full cost to replace items new, without depreciation
• Actual cash value coverage—pays replacement cost minus depreciation (often 30-50% less)
• Most restaurant contents depreciate rapidly—used equipment worth far less than replacement cost
• ACV coverage leaves you underinsured—a 5-year-old fryer may be worth $2,000 (ACV) but cost $8,000 to replace

Critical warning: Most restaurant owners are underinsured on contents by 30-50% or more. A kitchen fire that destroys $300,000 in equipment and contents will only generate a $150,000-$200,000 payout if you only carry $200,000 in contents coverage based on outdated values. You’ll pay $100,000-$150,000 out of pocket to replace everything—money most restaurants don’t have. Without a detailed contents inventory and accurate replacement cost coverage, you’re gambling with your business’s survival.

Why it matters for Restaurant Owners

The contents of your restaurant represent a massive financial investment that is essential to your daily operations. A fully equipped commercial kitchen alone can cost $100,000 to $500,000 or more, and that doesn’t include your dining room furniture, point-of-sale system, inventory, or decorative elements that create your restaurant’s atmosphere. If a fire destroys your restaurant or thieves break in and steal your equipment, you could lose everything overnight.

The true cost of inadequate contents coverage

Without proper coverage, a total loss means:

• $100,000-$500,000 to re-equip a commercial kitchen with ranges, ovens, fryers, refrigeration, prep equipment
• $25,000-$100,000 for dining room furniture depending on size and quality
• $10,000-$30,000 for POS systems and technology infrastructure
• $15,000-$50,000 for dishes, glassware, flatware for a full-service restaurant
• $5,000-$30,000 in food and beverage inventory depending on operation size
• Total contents value often $200,000-$750,000+ for typical restaurants

The reality: A grease fire destroys your kitchen. Your contents coverage shows $150,000 in limits based on what you told your agent five years ago. Your actual replacement cost is $380,000. Insurance pays $150,000. You’re personally responsible for $230,000 to re-equip your kitchen—money you don’t have. Without adequate coverage, you close permanently.

Protecting your contents coverage

Ensure comprehensive protection with:

• Replacement cost coverage—not actual cash value which pays depreciated amounts
• Accurate coverage limits—based on detailed inventory of current replacement costs
• Annual coverage reviews—update limits as you add equipment or prices increase
• Detailed contents inventory—photos, serial numbers, purchase dates, replacement costs documented
• Scheduled equipment endorsements—high-value items listed separately with agreed values
• Inflation guard endorsement—automatically increases limits annually for cost inflation

Essential inventory practices

• Complete equipment list—every piece of kitchen equipment with make, model, serial number
• Furniture count and value—exact count of tables, chairs, booths with replacement costs
• Photographic documentation—photos of all equipment, dining room, inventory, decor
• Purchase receipts retained—proof of value for insurance claims
• Annual inventory updates—review and update total contents value yearly
• Digital backup—inventory stored off-site or in cloud for access after loss

Without contents coverage, you would have to pay out of pocket to replace every piece of equipment, every table and chair, every plate and glass—potentially hundreds of thousands of dollars. Most restaurant owners could not afford to replace their contents without insurance, which means a single covered loss could force them to close permanently. Contents coverage ensures you have the financial resources to rebuild your inventory and re-equip your restaurant so you can reopen and continue serving customers.