What Coverage Do You Need for Restaurants and Food Service Business? August 2019

If you own a restaurant or have thought about opening a restaurant, as with any business it takes allot of time and energy, not to mention blood, sweat, and tears, and allot of perseverance in getting it up and running. There are some unique risks involved when it comes to insuring a restaurant. Workers can or will get injured, patrons could get sick, cooling systems may break down, and the list goes on. It’s important to make sure you are adequately protected with business insurance in the event something major happens.  Setbacks due to fire, theft or other unexpected life events may be hard to recover from, especially before you’re turning a profit.

The greatest chance of success in the food-service business is to make sure your restaurant can handle a financial loss due to things beyond your control.  Here are some tips.

Basic Coverage’s

Business Owner’s Policy provides insurance for your property, liability and loss of income due to a loss on your business.

  1. Property: Provides coverage for your building (owned or rented, additions or additions in progress and outdoor fixtures). Covers your business personal property for damage or loss, kitchen equipment and inventory, including perishable foods. Commercial property insurance provides reimbursement if a fire damages your kitchen, even if a fire started in another building.  It provides coverage for vandalism, theft, and certain types of weather-related damage, such as burst pipes and hail damage.   
  1. Liability:Protects against lawsuits related to a customer’s injury or damage to a customer’s property that happened at your place of business. General liability insurance can help pay for medical expenses, pay for repair or replacement of customer’s property if damaged and help pay for court costs, attorney’s fees, and other legal expense if a customer holds you liable.  General liability provides coverage against advertising injuries, including defamation (libel and slander) and accusations of copyright infringement.  
  1. Business interruption: In the event of a loss this coverage will help make up for lost income and pay other related expenses to help you reopen. It covers loss of income due to a fire or other catastrophe that disrupts the operation of your business. It can also include extra expense of operating out of a temporary location.

Other Coverage’s

  1. Liquor liability:If your bar or restaurant serves alcohol you may be required to purchased liquor liability insurance, it can be added to a business owners’ policy.  This coverage protects your business in the event an intoxicated customer injures another customer’s property or causing injury to someone due to consuming too much alcohol at your business.  
  1. Commercial auto insurance:Can cover expenses related to accidents involving a business-owned vehicle. It provides coverage for vehicle theft and vandalism.  If your restaurant provides delivery service on a regular basis, make sure you have a commercial auto policy in place.
  1. Worker’s Compensation:This policy is required in most states for business with one or more employees.  It provides coverage for medical expense and partial lost wages if an employee is injured on the job.
  1. Food spoilage and contamination: Whether it’s due to a malfunctioning refrigerator or a power outage, damage to your stored food can be a big financial loss to your business.  This type of coverage will help you recover from the damage.  It provides coverage to help reimburse the cost of replacing spoiled frozen or refrigerated food, or shelved perishables.  Food contaminated by a supplier or improper handling may also need to be thrown away.  Food contamination coverage helps with replacement costs, along with associated cost such as cleaning or advertising to restore your reputation.  Food spoilage and contamination coverage can both be added to commercial property insurance on your BOP.

What is Umbrella Insurance – April 2019

What is Umbrella Insurance?

Umbrella insurance is an additional liability insurance that will protect you financially in the event you are sued for a large amount of money.  It provides additional coverage if you are faced with costs due to a liability claim.  Umbrella policies provide coverage in excess of your auto, homeowners, boat, or business and can be applied to all if you have these policies bundled. Umbrella insurance will step in when your primary insurance coverage isn’t enough.

What does umbrella cover?

An umbrella policy provides two types of coverage:  liability and defense costs.  Umbrella policies will cover an excess of what your primary insurance excludes and/or additional coverage beyond the limits set in your other insurance.  It provides coverage for a variety of situations if your held responsible for bodily injury, property damage, or personal injury.  An umbrella policy will help pay for these liability-related costs.

What does Umbrella insurance not cover?

Umbrella policies do not cover physical property damage.  It does not cover damage to your own home or vehicle; for e.g. someone steals everything in your house, or a hailstorm totals your car; an umbrella policy will not step in as coverage.  This would fall under your homeowners or auto insurance coverage.

What does personal umbrella insurance cover?

  1. Defense cost – If you are sued your umbrella insurance coverage steps in to pay for lawyer fees and processing expenses that will help defend yourself in court. Any remainder umbrella coverage not used for defense cost may help pay for any associated liability expense you owe.
  2. Teen Drivers – Did you know the crash risk is 3x higher for 16-19-year old, and teens account for about 8-10% of fatal crashes every year. This creates high risk and high liability.  Having umbrella insurance coverage boosts your auto liability limit to protect against these increase risks.  Teen drivers typically raise your insurance premiums.  Having an umbrella policy is a great way to provide additional coverage at a lower cost, rather than adding the extra line of liability on your primary auto insurance.
  3.  Intoxicated party attendee – You host a party or a BBQ cookout at your house. One of your guests drinks too much and is intoxicated.  Your guest leaves your party and, on his/her drive home causes an accident.  Depending on your state, you may be partially liable for his/her expenses.  A lawyer could make the claim you over served him and did not cut him off, you did not stop him from leaving by taking his keys, offering him to stay the night, or offer to call a taxi/cab. People don’t realize one of the most surprising and expensive liability claims they find themselves in is indirect liability.  Umbrella insurance coverage can help protect against this when homeowners’ insurance likely won’t.
  4. Dog bites – Do you own a dog? You walk your dog and another dog spooks him.  Both dogs get into a fight, and your dog bites that dog.  Your dog also bites the other dogs’ owner while in the mist of pulling the dogs apart. This would cause bodily injury to both the owner and the dog.  If your dog bites first or attacks person your will be responsible for medical expense, lost wages and even pain and suffering.  This may not be covered by homeowner’s insurance, especially if you have a dog that is on the excluded dog list, such as a Chow, German Shepherd, Pitbull, Rottweiler, Akita and there are a few more.  Umbrella insurance coverage could step in to pay for the costs.
  5. Pain and suffering – You have an accident and are found at-fault for the incident. You could be sued for “pain and suffering.”  Pain and suffering is one of the costliest liability expenses.  It could lead to hundreds of thousands if not millions of dollars in some cases.  Umbrella insurance coverage can help cover these costs; the minimum umbrella limit is $1 million.