January 26, 2015 in business income insurance, business liability, business property, insurance coverage, limited cooking restaurants, liquor liability, Restaurant Insurance, umbrella insurance, worker's compensation
Restaurant Insurance will usually fall into one of four different categories: fast food, limited cooking, casual (or family style) dining, and fine dining. Fast food restaurants usually prepare food quickly by frying, baking, and microwaving; some of the more popular chains in this category are KFC, Wendy’s, and McDonalds. Limited cooking restaurants prepare cold foods or use appliances such as microwaves, warming ovens, and toasters; Subway and Quiznos are two of the more popular chains in this category. Casual dining restaurants serve moderately priced meals to customers who are served while seated; these types of establishments include chains such as Olive Garden and Red Lobster. Fine dining restaurants serve quality foods that are prepared by trained chefs; Morton’s and Ruth’s Chris Steak House are two restaurants in this category.
Each one of these restaurant categories will require insurance coverage packages that are tailored to meet their own unique needs. Therefore, it would be advantageous for restaurant owners to be familiar with all of the options that are available so that the best decisions can be made.
One of the main types of insurance coverage needed by all restaurants is business liability insurance. This insurance covers injuries that may occur at a place of business and also covers legal expenses if a business owner is sued for negligence. Another form of this coverage is commonly known as employment practices liability insurance, which will provide coverage if a business is sued for discrimination or any other sort of employment-related offense. In addition, product and completed operations insurance is also needed in order to cover legal costs associated with flawed products. For instance, this coverage would protect restaurant owners from lawsuits from patrons who claim they have suffered from food poisoning.
If a restaurant serves alcohol, then it is required by most states that liquor liability insurance be purchased because the restaurant could be liable for injuries or damages that occur as a result of a patron who was served alcohol at the establishment. Since alcohol sales account for up to 33 percent of total sales (up to 50 percent for fine dining establishments), this type of insurance is vitally important. Liquor liability insurance would assist with the establishment’s legal expenses, court fees, and any damages that may be awarded.
Business Property and Business Income Insurance
Business property insurance is also needed in order to be financially protected from natural disasters. This kind of insurance protects the building, the sign, and all of the equipment inside. Business income insurance covers the loss of income that occurs when property is damaged to the extent that new income is reduced or no longer produced at all. In addition, there are additional forms of insurance packages that also protect the restaurant owner from identity theft, data breach, and computer fraud. It should also be realized that certain restaurants (such as Subway) require food contamination insurance. There are also options available to protect a restaurant owner from ammonia and refrigerant contamination.
Worker’s compensation is required in all states and covers expenses that are incurred when an employee suffers from a work-related injury. It should also be realized that most insurance firms also have loss control (or risk control) programs, which include both assessment and consultation services for their clients. These programs focus on workplace safety issues and are meant to help reduce the amount of accidents.
There are also some forms of insurance coverage that may not be necessary for all restaurants. If a restaurant either delivers or caters, then it must also have liability insurance for company vehicles; some insurance packages may also cover non-owned and hired vehicles. In addition, it is often wise to purchase some kind of umbrella insurance, which expands the limit of one’s current liability coverage and also provides coverage in additional areas that might not have adequate protection.
Therefore, when making decisions about which options are the best, it is prudent that an owner be aware of the what elements would be the most appropriate for their own particular situation. In this way, restaurant owners can have the greatest peace of mind that will allow them to focus on the many aspects involved with running a successful business.