The Primary Types of Insurance Coverage Needed by Restaurants

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.


Business Liability

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.


Liquor Liability

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

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.


Additional Options

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.




More insider info on another one of our team members

January 8, 2015 in Uncategorized

Personnel File Jessica 1 277x300 More insider info on another one of our team members

T Hallock

January 5, 2015 in Testimonials

“With my daughter being a new driver, finding the affordable insurance was stressful and expensive, but with Williams Agency they saved me so much money. They are first class all the way.”

T. Hallock  Kane, Pa

A little inside info. on one of our team members

November 26, 2014 in Uncategorized

Personnel File kristen 277x300 A little inside info. on one of our team members

LICA has shown Excavating Contractors how to earn dividends on their insurance premiums

August 14, 2014 in business owner's insurance, contractor's errors and omissions, insurance, insurance dividends, lower costs on insurance, Pa LICA, united fire group

It is amazing how the government will say that the cost of living has not increased substantially. This is because they do not take into account three of the most expensive consumer products when calculating the rates: food, gas and non-core CPI measures. Instead of calculating the CPI by including home prices, housing costs are calculated by rental rates. For sure, it is complicated. But complicated or not, all contractors know that bids must be low in order to secure contracts and prices for goods and services are increasing. This is quite evident in the cost of fuel which can fluctuate from one week to the next depending on turmoil overseas and natural disasters here at home. A contractor can make an educated bid today but costs may increase next week and the whole project can be in the red.


Pennsylvania has chosen to give back to contractors by allowing insurance dividends to be paid on contractors’ policies. Some states have already had this program in place. It is not unusual to see a dividend of 16% and this is real money that the contractor can add back to the bottom line.


What this also means is that an excavating contractor can actually get the insurance he needs rather than what he can afford at one given time. We all know that general liability insurance is mandatory across the board. Some GC’s and property owners require a minimum amount of liability and the excavating contractor who has won the bid has just so much time to provide proof of insurance. If there is an excavating contractor who has jobs going simultaneously, it is advantageous to have a policy that covers all new work as it comes in – rather than having to write one policy for each job.


There are coverages that an excavating contractor may not know is available or that his insurance agent has not been proactive in describing. PALICA has a link on their website shows the benefits of becoming a member in addition to the dividend program and lower costs on insurance. It also give you a link to an agent with United Fire Group which underwrites every type of insurance for the excavating contractor.


Samples of the additional coverages that are available include:


Business Owner’s Insurance: For the excavating contractor this combines property, liability and crime protection. It includes a variety of enhancements that offer protection for many aspects of your business such as data processing, security breach and identity theft services, employee dishonesty, money and securities. Equipment breakdown covers the cost to repair or replace mechanical, electrical or pressure systems that suffer a breakdown.


Contractor’s Errors and Omissions: Customers depend on their jobs being completed on time and on budget. But, no matter how careful you are, mistakes can happen. You need the coverage to protect your business from losses caused by defective materials or faulty workmanship. These types of losses can have a devastating impact on your production, profitability and reputation.

The (E&O) offers unique coverage to protect you against four important coverage exclusions in a standard general liability policy: Product Exclusion, Work Exclusion, Professional Liability and Product Recall Exclusion.