Ghost Kitchens in Canada: Risks, Insurance Coverage & Risk Management Tips

👻 Ghost Kitchens in Canada: Hidden Kitchens, Visible Risks 🍽️🇨🇦

The rise of ghost kitchens—delivery-only restaurants without dine-in service—is transforming Canada’s food industry. These operations offer low overhead and greater flexibility, but they also present unique insurance and liability challenges that many operators may overlook.

🔍 What Are the Risks?
While ghost kitchens might appear low-risk at first glance, they face many of the same hazards as traditional food establishments:

🔥 Property & Equipment Damage

• Fire hazards from cooking equipment.
• Breakdown of essential equipment (e.g., commercial fridges, ovens).
• Shared kitchen spaces, which can create confusion over responsibility.

📦 Business Interruption

• A fire in a shared kitchen can disrupt multiple brands simultaneously.
• Glitches or outages on delivery platforms can lead to lost revenue.

👨‍🍳 Liability Exposures

• Risks from foodborne illness or contamination.
• Slip-and-fall accidents involving staff or delivery drivers.
• Errors in food handling or allergen labeling.

🏢 Are You Covered?
Traditional restaurant insurance policies may not provide sufficient coverage for ghost kitchens. Potential gaps include:

• Commercial general liability (CGL).
• Equipment breakdown.
• Cyber liability (for online orders and delivery platforms).
• Business interruption due to third-party services or shared spaces.

✅ Risk Management Tips

• Carefully review your lease or shared kitchen agreement.
• Obtain a commercial policy tailored to your ghost kitchen model.
• Consider additional coverage for cyber risks, product liability, and contingent business interruption.
• Fully disclose all operations and delivery dependencies to your insurer.

🍔 Ghost kitchens may not have a physical storefront, but the risks they face are very real. Ensure your insurance is as robust as your business model.

If you’re launching or scaling a delivery-only food brand in Canada, let’s talk.

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