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What Restaurant Owners Should Know About Valet Insurance

November 10, 2017


Today's restaurants are always searching for ways to improve customer service and enhance your experience. In effort to attract a high-end clientele, those with limited parking or those looking to provide a white glove service to their patrons all benefit from providing a valet service.

According to Markets and Markets projections, valet service will be a $7 billion industry by 2018. With this in mind, you may start to notice more and more venues investing in valet service.

What you will learn: 


Before Investing, Know the Risks

Each year, thousands of accidents occur in parking lots, resulting in injuries to customers and pedestrians, as well as damages to parking structures. Investing in a valet service can help reduce some of those accidents. However, it comes with a few added risks itself. The good news is that valet insurance coverage can help reduce the out-of-pocket costs to your company.

There are two options to consider when investing in a valet service, both requiring different business insurance needs.

Your Valet Drivers Are Employees

Hiring your own employees to handle valet service is the more cost-effective solution, but it presents the most risk.

It is critical to choose safe drivers and provide adequate training beforehand. In this situation, your restaurant will need several types of coverage including General Liability and Garage Auto Insurance for damage that happens to your customers' cars while they are in your possession.

You should also consider the following policies:

  • Employee Dishonesty  - to cover lost or stolen items in a client’s vehicle, both of which would not be covered by a general liability or garagekeepers policy.
  • Workers Compensation  - to cover medical coverage for employees who sustain job-related injuries.

You Hire a Third-Party Company

Your second option would be to hire a professional valet service. While your organization would still maintains some responsibility here, with a contracted-out service, you reduce some of your risk.

Once risk that is severely reduced is any property damage caused by employees, and the contracting company would take fault. On the downside, this means you don't get as much control over who the company hires to service your customers.

In this situation, you still need to have insurance to protect your property – including any location that your valet service will use to park vehicles. Review your general liability policy to ensure it provides adequate coverage for how you plan to use that structure.

How Valet Insurance Helps

Here's a closer look at how valet insurance covers common risks:

  • General Liability Insurance: provides financial protection for your restaurant in the event that a customer's car is damaged by your hired valet. A driver hitting a pedestrian is an extreme example of a risk that would be covered by a GL policy.
  • Workers Compensation Insurance: If you employ the valet drivers and service providers, you will need to extend your existing workers compensation insurance to those individuals as well. This may change your level of risk. It will provide coverage for both medical and disability claims related to on-the-job injuries or illnesses.
  • Garage Auto Liability Insurance: As noted, this is an extension of your basic business insurance. It specifically covers any damage to the customer's vehicle while it is in your parking garage or on your lot. It  extends to damage such as collisions or theft when your establishment is responsible for maintaining the vehicle. Most policies state that it provides coverage for care, custody, and control while your valet employees are in possession of the vehicle.

Stay Mindful of Exclusions 

Keep in mind that like all other polices, valet insurance has exclusions and limitations. For example, valet insurance alone would not cover vandalism or theft if your drivers properly park and lock the vehicle.

In this case, the vehicle owner's coverage will pay for these losses. It does not include weather-related damage or theft of contents under the same policy. Read through the terms of your contract to understand policy limitations. A pro-active agent can help you identify and reduce such exposures. 

Valet parking is an exceptional service to offer your clients, especially if it encourages more patrons to frequent your establishment. If you're thinking of investing in the service, be sure to protect your business from the risks that it presents. 

SAHOURI Restaurant Insurance



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