Restaurant Disasters and How to Avoid Them
Avoid Your Restaurant’s Financial Disaster with the Right Protection.
Trying to sneak by without restaurant insurance exposes your establishment to grave risks. Can you really afford not to have adequate coverage? You never know when an accident will strike, or when an employee will get hurt on the job. Not having the right coverage can cost you and your family your restaurant as well as your home, savings, retirement, the education of your children, and everything else you’ve worked so hard to achieve.
What If…
- Your chef misses an ingredient on the menu and your customer, who has a severe allergy to nuts, has to go to the hospital?
- You come to work to find your restaurant robbed. The desk has been rifled through, and files are missing. Business checks, personnel files, and business contacts… all gone. Now what?
- A customer breaks their tooth on something that worked its way into one of your restaurant’s appetizers. Are you liable?
- One of your line cooks needs surgery and months of physical therapy to correct their tendonitis.
- You arrive at work to find that all the expensive kitchen equipment has been stolen.
- One of your waiters is talking to a friend, and a client overhears them calling your competitor an “idiot,” joking that they have been known to date underage girls. Your competitor promptly sues you for defamation.
- A customer slips on a freshly washed floor and breaks her ankle.
- One of your employees has been stealing restaurant supplies.
Unfortunately, bad things happen to even the most conscientious restaurant owners. That’s why insurance is here to protect you. Getting insurance isn’t just the responsible thing to do. Getting insurance is what earns you your peace of mind.
Many restaurant owners pay too little and end up with coverage that isn’t adequate. A whole other set of restaurant owners pay too much on their insurance. The best way to avoid either group and ending up with the insurance you need is by talking to an independent insurance agent. They can put together a professional, no-obligation insurance proposal for you.
Risks to Your Business
You never know when things like fires, flooding, lawsuits, accidents, food-borne illness, theft, or loss of records will stop your restaurant in it’s tracks. But it’s key that you protect it for when things like this DO happen. It’s better to be prepared than to be pummeled by large bills afterwards.
With all the things to keep track of with your restaurant, you shouldn’t have to add the worry of “What If…” With the right coverage, you can sleep easy knowing you’re protected.
If Something Happens…
Do you have the right coverage, at the right amounts, to make sure you can reopen your restaurant to customers quickly? There are very important questions to ask of yourself and your insurance agent:
- Do I have workers’ compensation coverage or disability?
- If a natural disaster were to strike my business, will I be able to set up and continue operations in another location?
- Do I have coverage for income loss if my restaurant is unexpectedly closed?
- If my grocery supplier has problems delivering, and as a result, my restaurant can’t prepare a large portion of the menu, do I have coverage for the interruption of business?
- If my restaurant goes up in flames, do I have enough coverage to demolition AND completely rebuild, refurnish and restock my restaurant?
- Will my insurance cover the revenues I’ll lose?
- Does my insurance help me pay bills if my usual revenue stream is gone?
- Will it reimburse me for the expenses I incur in getting my restaurant back up to speed?
- If complaints about food poisoning start coming in, will my insurance protect me? Was it an ingredient? Maybe the problem came from the supplier? Was it the storage? Was it hygeine? Was it prepared improperly? How long will I have to be shut down, and how much will spoil, before I can open my doors to business again? What happens in the meantime?
- Do I have Commercial Auto coverage on my delivery vehicles?
- What if our computers get a bug and our customer lists, special event contacts, or table reservations are lost?
- Can the information be recovered, and will insurance cover the cost to do so?
- If one of my employees gets hurt, do I have disability coverage to pay part of their salary if they can no longer work?
- Am I protected from claims or actions taken in conjunction with my website?
- What happens if the losses from a claim go over my policy limits? Should I get umbrella insurance to protect me?
- If my employee sues me for discrimination, will I be covered? Does my Employee Practices Liability Insurance (EPLI) cover it?
Insurance is all about the worst-case scenarios. You need to be prepared for problems of every size, so that if something happens, you, your restaurant, and your employees won’t be left out to dry.
Anything less than full coverage isn’t adequate protection.
Consult with a knowledgeable restaurant insurance agent before purchasing any policies. If you are just launching your restaurant, make sure you have adequate coverage before you open your doors. And don’t fall into the trap of getting too comfortable.
Many restaurant owners purchase their policy and never look at it again. This is dangerous - if details of your restaurant change, your policy needs to reflect the changes so that, in case something happens, your claim won’t be denied.
Set a date on your calendar a couple months before your renewal to review your policy with your insurance agent.
Two-Step Restaurant Protection Program
1. Draw up a disaster recovery plan for your restaurant
Insurance can’t cover everything, and each coverage has its limitations. So you need a plan that allows you to get your restaurant back up and running as quickly as possible. If you feel you don’t have the expertise to design this plan, there are plenty of professionals out there who can do it for you.
For this recovery plan to be effective, you need to do the following:
Make duplicate records of both computerized and written documents.
Identify your restaurant’s critical business activities and the resources needed to support them.
Plan for the worst-case scenario. Do research before a disaster strikes:
- Alternative facilities
- Equipment and supplies
Set up an emergency response plan and train your employees how to carry it out. Consider:
- Alternative power sources
- Alternative communication systems
- Evacuation routes
- Fire safety procedures
- Supplies such as first-aid kits and flashlights
Compile lists of important phone numbers and addresses (lists should be kept off-premises), including:
- Local and state emergency management agencies
- Major clients
- Calendar of special events or catering jobs – with contact information
- Suppliers
- Financial institutions
- Insurance agent
- Insurance claims representatives
- Phone numbers and addresses for your staff.
Implement a communications strategy to prevent the loss of clients. The strategy should enable your clients to contact your restaurant at its new, temporary location.
2. Get a independent business insurance agent to look at the your restaurant’s risks
Cookie-cutter solutions don’t work for restaurant insurance programs. No two restaurants are the same, even two that are in the same business or franchise. You need to have your restaurant looked at individually, and you need an expert to assess your restaurant and the specific risks it faces. They will help you put together a comprehensive restaurant insurance plan to protect you.
Additionally, you should have as many options available to you as possible for your restaurant insurance program. This is best achieved (and with the fewest headaches) by using an independent insurance agent. They can ensure you get the comprehensive coverage at the best price available to you by:
- Shopping around for you;
- Knowing which markets will work the best for your business;
- Having an awareness of which companies have good claims services, and;
- Negotiating with companies on your behalf.
At Balcos Insurance, inc., we’re happy to get you the information you need to help create a successful restaurant insurance protection program. We’ll take care of your risk analysis at no cost, with no obligation to buy. We know that we provide services and prices that are highly competitive, and even provide resources that few (if any) other restaurant insurance agents provide.
As independent agents and having been professionals in the restaurant and hospitality insurance industry for over 20 years, we have been able to develop restaurant insurance programs and relationships with the right companies to get you the best protection program we can offer.
Our efforts have even been recognized by the Washington Restaurant Assosication, who has made us their endorsed commercial insurance provider.
We want to help you find the best restaurant insurance solution.
Protect your business – and your future – and call us for a free evaluation today.
(877) 783 – 0335
© 2008, Mark S. Balcos. The reader assumes all responsibilities for his/her own actions in regards to any items discussed in this report. Adherence to all applicable laws and regulations, federal, state and local, governing the use of any product or service described in this report in the US or any other jurisdiction is the sole responsibility of the reader. The publisher and author assume no responsibility or liability whatsoever on the behalf of the reader of these materials. The reader is encouraged to consult directly with his/her insurance professional.
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