Why Liability Pricing Relief Still Needs Caution in Restaurants

For hospitality businesses, the timing is relevant. Public and product liability are central parts of many restaurant insurance programmes because venues deal directly with customers, food service, foot traffic, suppliers and, often, alcohol. A single incident involving a slip, burn, food-related illness allegation or third-party property damage can take time to resolve, even where the venue has strong procedures and a defensible position.

The important message from the new analysis is that headline market conditions do not tell the full story. KPMG says loss ratios have improved across professional indemnity and public liability, but the drivers differ. Public liability outcomes have been more dependent on premium growth offsetting claims severity, and the report notes that public liability claims appear to be staying open for longer. That matters because a claim that remains unresolved can involve extended correspondence, legal costs, evidence gathering and uncertainty around the final outcome.

Restaurant owners reviewing cover during a softer market may wish to focus on substance rather than price alone. Areas worth checking include:

• whether the business description accurately reflects dine-in, takeaway, catering, delivery, events, alcohol service and any off-site trading;
• whether policy limits align with lease requirements, supplier contracts and realistic exposure levels;
• how exclusions apply to food contamination, allergens, imported products, contractors and outdoor dining areas;
• whether incident reporting, cleaning logs, staff training records and food safety documentation are strong enough to support a future claim.

The APRA database behind the analysis is designed to help the market understand trends in public and products liability and professional indemnity insurance, including premiums and claim costs. However, APRAs current published dataset only runs to December 2024, and the next update, expected later in 2026, may give a clearer view of more recent renewal and claims patterns.

For restaurants, the practical takeaway is balanced. Easing market conditions may create room to revisit restaurant insurance costs, limits and policy structure, but liability risk remains highly fact-specific. A cheaper renewal is useful only if the wording still matches how the venue actually trades and how claims may realistically emerge.