Insurance for Used vs. New Restaurant Equipment Sales

Whether you’re selling brand-new or pre-owned restaurant equipment, having the right insurance coverage is critical to protecting your business. The risks involved in selling used vs. new equipment differ, and not all insurance policies offer the same level of protection.
At Restaurant Pro Insurance, we specialize in customized restaurant business insurance solutions for restaurant equipment suppliers. If you’re selling, leasing, or servicing commercial kitchen equipment, here’s what you need to know about insuring used vs. new equipment sales—and how to protect yourself from costly claims.

Understanding the Risks of Selling New vs. Used Restaurant Equipment

New Restaurant Equipment: Fewer Risks, Higher Expectations

Selling brand-new restaurant equipment often comes with the following:

• Manufacturer warranties that cover defects and malfunctions.
• Lower liability risks since new equipment hasn’t been previously used.
• Higher upfront costs, meaning financial loss from damage or theft can be significant.
• Customer expectations for long-term reliability—meaning fewer disputes.

Used Restaurant Equipment: More Risks, More Potential Liability

Selling used or refurbished equipment comes with the following:

• Higher chances of wear and tear could lead to equipment failure after purchase.
• Increased liability risks—a restaurant may claim that your equipment caused a fire, injury, or business interruption.
• Limited or no manufacturer warranty means putting more responsibility on your business.
• Potential claims of misrepresentation—if a restaurant believes the equipment wasn’t sold as advertised.

Since new and used equipment comes with different risks, it is vital to have an insurance policy that specifically protects your business from potential claims.

Types of Insurance Every Restaurant Equipment Seller Needs

Whether you sell new or used equipment, you should have the right combination of insurance policies to protect your business from lawsuits, financial losses, and liability claims.

1. General Liability Insurance

• Covers third-party claims, such as:
• A customer getting injured in your showroom or warehouse.
• A restaurant suing you over faulty equipment that caused property damage.
• Legal fees and settlements if your business is found liable.

Higher risk for used equipment? Yes. Used equipment may have hidden defects that could lead to more product liability claims.

2. Product Liability Insurance

Covers claims related to defective, malfunctioning, or hazardous equipment that causes:

• Fires, electrical failures, or gas leaks.
• Injuries to restaurant staff due to faulty machinery.
• Business losses due to downtime from failed equipment.

Higher risk for used equipment? Yes. Since used food and beverage equipment may be more likely to fail, product liability coverage is essential for businesses selling second-hand restaurant gear.

3. Inland Marine Insurance

Protects restaurant equipment while it’s in transit to customers or from suppliers.

• Covers damage from accidents, theft, and loss during delivery.
• Important for companies that transport heavy commercial kitchen appliances.

Higher risk for used equipment? Same risk level. Both new and used equipment need coverage when in transit.

4. Commercial Property Insurance

Protects your warehouse, showroom, and inventory from:

• Fire, floods, storms, and other disasters.
• Theft, burglary, and vandalism.
• Accidental damage to inventory before sale.

Higher risk for used equipment? Yes. Many used equipment suppliers operate smaller, less secure warehouses rather than high-tech manufacturing facilities, increasing the risk of theft or fire damage.

5. Business Interruption Insurance

Protects your income if your business is forced to shut down due to:

• Fire or disaster damaging your facility.
• Lawsuits that put your operations on hold.
• Equipment failure that disrupts your ability to sell products.

Higher risk for used equipment? Yes. If you rely on a steady stream of second-hand inventory, any supply chain issue or legal dispute could halt your ability to operate.

6. Cyber Liability Insurance

If you sell restaurant equipment online, this protects against:

• Data breaches and hacking.
• Fraudulent transactions or payment disputes.
• Website downtime that leads to lost sales.

Higher risk for used equipment? Same risk level. Online retailers selling both new and used equipment need protection against cyber threats.

How to Reduce Liability When Selling Used Restaurant Equipment

If you sell pre-owned restaurant equipment, insurance is just one part of protecting your business. You should also take preventative measures to avoid costly disputes and lawsuits.

1. Offer Clear, Written Warranties or “As-Is” Agreements

• Be upfront about any equipment defects and condition issues.
• Use disclaimers that outline what is and isn’t covered after the sale.
• If selling “as-is,” have customers sign an acknowledgment that they understand the risks.

2. Keep Detailed Maintenance & Inspection Records

• Document repairs, refurbishments, and testing for used equipment.
• Provide condition reports when selling second-hand machinery.
• Maintain proof that equipment was functional at the time of sale.

3. Get Customers to Sign Liability Waivers

• Limit post-sale disputes by requiring liability waivers for equipment purchases.
• Clarify that improper use or lack of maintenance is not your responsibility.

4. Work with a Licensed Insurance Provider to Build the Right Coverage

• Don’t rely on generic restaurant insurance coverage—restaurant equipment sales have unique risks.
• Make sure your policy covers both new and used equipment sales.
• Talk to an expert who understands the restaurant supply industry.

Protect Your Business with the Right Insurance Plan from Restaurant Pro Insurance

Selling restaurant equipment—whether new or used—comes with inherent risks. From product failures to property damage claims, your business must be protected against lawsuits, accidents, and unexpected losses. If you sell new equipment, your risks are lower, but you still need general liability, product liability, and transit protection. If you sell used restaurant equipment, your risks increase—meaning you need more substantial product liability coverage, as-is disclaimers, and a customized insurance plan.

Restaurant Pro Insurance specializes in restaurant insurance solutions designed specifically for restaurant equipment suppliers and service providers. Reach out today and let us help you get the right coverage at the right price. From restaurant liability insurance to commercial auto coverage and beyond, we’ve got you covered.