Restaurant Insurance – Understanding The Basics

If you are considering opening an eating establishment, then one of the hurdles you will have handle is purchasing restaurant business insurance. You will need to know what types of insurance policies you might need and how they will affect your business. This article approaches this problem from an overview perspective and covers really the basic outline of the types of insurance policies that you should consider. For more details on any of these types of policies, you may want to read more of my restaurant blogs at www.RestaurantInsuranceGuy.com.

Property Insurance – You will need to consider coverage for your building and your contents. If you don’t own the building, check your lease to be sure that your landlord is requiring you to carry coverage on the building. Also, if you are a tenant, be sure to carry a high enough limit to replace all of your contents in a total loss. Also, don’t forget to include enough building coverage for the improvements and betterments that you make to the building itself in order to decorate the restaurant as yours.

Liability Insurance – You will need protection for your company for premises liability in case someone is injured on your premises. A good example of this would be someone who slips on a wet spot and is injured in your restaurant. In addition, you will need products liability for injury caused by the product you sell, that is the food. This would protect you if someone breaks a tooth on a meal or claims food poisoning as a result of eating at your establishment.

Business Interruption Insurance – This coverage will provide your lost income and ongoing expenses that occur while your business is out of business due to a covered loss such as fire or tornado. It is very important to have this protection to make sure that once you rebuild, you are still able to stay in business.

Mechanical Breakdown Coverage – What happens if your air conditioner stops working in the middle of July? No one will visit your restaurant and suppose it takes 5 days to order the part and get the air conditioner repaired. How will you deal with the loss of earnings that occurred during this time? This protection solves that problem. For more detailed information on mechanical breakdown coverage visit my blog by clicking here.

Liquor Liability – If you sell alcoholic beverages then this protection is a must. You can be sued by a third party if they are injured by one of your patrons who may have imbibed an adult beverage while visiting your establishment. These claims can be huge and can come out of nowhere so it is very important that you don’t overlook this protection.

Automobile Insurance – This is a no brainer if you purchase a vehicle in the company name. But even if you don’t you need this coverage. At the very least you need non-owned auto protection in case you ask one of your employees to run an errand for you and they have an accident while on that errand.

Workers Compensation – In NC the rules say that you don’t have to purchase a workers compensation policy if you have 3 or less employees. But what most don’t realize is that you are still on the hook for paying all claims yourself if you don’t purchase a policy. For more help with workers compensation rules and audit tips, be sure to visit my general blog at www.InsuranceAnswerGuy.com.

Life Insurance – You may need additional life insurance to cover the money that you had to borrow to set up your business, or you may want to fund a buy out in the case of your death with a key man life insurance policy.

Disability Insurance – don’t forget to protect yourself in the event you become disabled and cannot work for a period of time.

Many of these coverages can be combined into one package policy so that you won’t have 10 or 15 different policies to keep up with. The best way to handle your insurance needs is to seek out an insurance agent that specializes in restaurants, one who knows the ins and outs of insuring restaurants and already insures 100 or more of them. At Clinard Insurance Group, in Winston Salem, NC, we specialize in restaurants and write them in both NC and SC. We understand that not every restaurant is the same and so to avoid making you a square peg jammed into a round hole, we have designed 5 different insurance programs for different types of restaurants. We have a program for casual dining restaurants, one for fine dining restaurants, one for fast food insurance, one for the bar and grill or tavern insurance and one for catering insurance. If you would like help with your restaurant insurance, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.

The source information for this article was pulled from articles found at www.RestaurantInsuranceGuy.com.

Restaurant Insurance – If You Have a Vintage Building, Consider This Approach

If you are a restaurant owner who also owns the building where your restaurant is housed, then you should take the time to consider exactly how the coinsurance clause on your property insurance policy works and what it means for you. To gain a better understanding of the coinsurance clause itself, please read my blog called, Coinsurance for Restaurants. In addition, if the building that you own is an older one, then you may find that the coinsurance clause is punishing you in a big way. In that case you may be looking for an alternative. That alternative can be a policy with a functional replacement cost clause.

As my earlier blog indicated, your coinsurance clause is based on the replacement cost of your building. But with older buildings there are many issues that skew the replacement cost of the building far too high. Simply stated, the functional replacement cost clause allows the building to be replaced with similar property that performs the same function but is less costly.

Functional replacement cost provides a combination of three separate coverages. They are:

Building limit of insurance – This covers the value of the building that you are going to replace at the time of the loss.

Demolition Cost -- This covers the cost to demolish and clear the site of the undamaged portion of the building which is caused by enforcement of ordinances.

Cost To Reconstruct In Compliance With Ordinance Or Law -- Generally speaking, you must repair or replace the building for this coverage to apply.

So who should use the functional replacement cost clause? This form is recommended when any of the following situations exist:

You own the building but in the event of a loss, you would only want to replace a portion of the building. Or, your building contains materials or design that is costly and difficult to replace. For instance, your building may have plaster walls but would happily replace them with dry wall after a loss. Another example would be if you would want to change the entire construction type of your building after a loss, perhaps replacing a masonry noncombustible building with a frame one.

What are the advantages of using this form in these cases? First of all, you can usually purchase a lower limit of insurance without putting yourself in jeopardy of the dreaded coinsurance clause. Secondly, total and partial losses can be settled on a replacement cost basis without a deduction from your claim for depreciation. Third, ordinance or law coverage for increased construction or repair costs is included in the form.

At Clinard Insurance Group, in Winston Salem, NC we specialize in helping restaurant owners of all types of restaurants with their insurance needs. We want all of our clients to be informed insurance consumers and to understand exactly what they are buying. To make this process a bit easier, we have developed 5 different restaurant insurance programs so that you aren’t a square peg forced into a round hole. We know that all restaurants are different and that is why we have develop specialized restaurant insurance programs for fine dining, casual dining, fast food, bar & grill and even catering. To see all of our restaurant insurance programs, visit us online at www.TheRestaurantInsuranceStore.com or call us, toll free at 877-687-7557.

The source information for this article was pulled from articles found at The Restaurant Answer Guy blog site.