A ghost kitchen — aka virtual kitchen, cloud kitchen, or dark kitchen — is a food business that runs on a delivery-only model with no dine-in area or storefront. These unique businesses need a combination of liability coverages to properly protect against claims, including general, product, and cyber liability.
They’re also getting more and more popular, with the market value estimated to reach over $223 billion USD by 2033.
Running a ghost kitchen, but not sure what type of coverage you need? We’ve got your back. This guide will help you understand the most common coverages for ghost kitchens, how to tell if you need them, and how you can get them online from Food Liability Insurance Program (FLIP).
Is My Business Considered a Ghost Kitchen?
Because ghost kitchens are a relatively new concept, here’s a quick checklist to help you assess whether your business counts as one before you start shopping for insurance.
Check all that apply to your business:
✔️ You are a delivery/pickup only business with no dining area or customer-facing storefront
✔️ You run your business out of a shared commercial kitchen or commissary
✔️ You take orders primarily through delivery apps like DoorDash or Uber Eats
✔️ Your kitchen space is used by multiple other brands or businesses
✔️ You consider your business a virtual restaurant (e.g., you have a full menu and concept but aren’t tied to a storefront)
If two or more of these statements apply to your business, it’s probably a ghost kitchen.
What Insurance Does a Ghost Kitchen Need?
The type of insurance you need depends on your business model, but some coverages are standard for all ghost kitchens. We’ll start by looking at the must-haves before moving on to others that may suit your business.
| Coverage Type | Do You Need It? | What It Helps Protect Against | Starting Cost With FLIP |
|---|---|---|---|
|
General Liability |
Required — most commissary/commercial kitchen leases mandate it |
Third-party injuries and property damage on or from your operation |
Included in base policy from $25.92/mo. (bundled with product liability) |
|
Product Liability |
Required — same lease requirement; core food business risk |
Foodborne illness and unlabeled allergen claims tied to your food |
Included in base policy from $25.92/mo. (bundled with general liability) |
|
Cyber Liability |
Strongly recommended — near essential for a delivery-only, tech-dependent model |
Data breaches, ransomware, and stolen customer/payment data |
+$8.25/mo. (add-on) |
|
Tools & Equipment (Inland Marine) |
Situational — if you transport gear between locations |
Repair/replacement of mobile equipment you move, own, or rent |
Starting at +$11.17/mo. (add-on) |
|
Workers Compensation |
Required by law (most states) — if you have employees |
Employee medical costs, lost wages, disability, and death benefits |
Custom quote |
|
Commercial Auto |
Situational — if you or your staff drive for the business |
Damage/liability involving owned, leased, rented, or personal work vehicles |
Custom quote |
Required Insurance for Ghost Kitchens
While these types of insurance are not usually required by law, it’s very common for commercial kitchens (aka shared kitchens or commissaries) to contractually require them in rental agreements.
Commercial kitchen owners will have their own policy, but that coverage doesn’t typically apply to any damages or injuries you’re responsible for. The kitchen manager wants you to have your own coverage, so if you do cause a fire or forget to label an allergen, you’re financially prepared to handle that.
General Liability
Virtually all businesses need general liability insurance, and ghost kitchens are no exception. You may have heard this called “slip-and-fall” insurance before because it’s designed to cover injuries to other people (third-party injuries) on your premises.
It can also cover damage your business causes to someone else’s property (third-party property damage). If you accidentally damage your rented kitchen space, general liability insurance could help cover some (or all) of the repair costs.