Restaurant Insurance – Have You Read Your Lease?

Not every restaurant owner owns his or her building. And not every lease is the same. But if you have not taken the time to make sure that your lease requirements match up with your restaurant insurance policy, then you may be leaving yourself open to an uncovered claim and as a result, potential downtime or a huge hit to your cash flow.

Consider the case of James, the owner of a small family restaurant. James signed his lease with his landlord but did not really study it carefully. One of the stipulations in his lease was that he was responsible for all repairs to the heating and air conditioning units on the roof. Two years into the lease, lightning strikes the roof units and destroys them. The cost to replace them is $24,000.

Here’s the problem. James has a businessowners policy which covers the contents of his restaurant - so everything not attached to the building. In addition, James did think ahead and had his agent add coverage for betterments and improvements to this policy. This betterments coverage is for items that are part of the building, which the tenant added – could be paint on the walls or even attached booths for the diners. The problem for James is that he didn’t add the rooftop air conditioning units to the building so technically they don’t fall under the tenants betterments and improvements coverage.

So how could James have protected himself? Well, for those air conditioning units he would need to add building coverage to his policy. The problem is, there is a coinsurance clause on the building coverage that would reduce his claim payment. (For more help with coinsurance clauses, read my blog about it by clicking here.) The answer is that James should have added an Agreed Value Building coverage endorsement to his policy to cover the HVAC equipment. This Agreed Value form should be written with no coinsurance penalty.

There’s one more area of concern in James’ claim that needs to be addressed. Without the air conditioning units he is going to be in trouble keeping his restaurant open. He needs mechanical breakdown coverage to protect him from the loss of earnings he will suffer while he is waiting on his HVAC system to be repaired. To read my blog about mechanical breakdown coverage, click here. To see a short video about mechanical breakdown coverage, click here.

This real world example shows how important it is to take the time to review your lease and make sure that your restaurant insurance policy seamlessly integrates with that lease. When choosing a restaurant insurance policy it is very important that you select an agent that specializes in restaurant insurance. At Clinard Insurance Group, in Winston Salem, NC, we do just that. We write insurance for over 100 restaurants all across NC and SC. We understand that each restaurant is different and that they don’t all need the exact same coverages. For that reason we have developed 5 different restaurant insurance programs to help you find the program that best suits your needs. We have a Fine Dining Restaurant Insurance Program, a Casual Dining Restaurant Insurance Program, A Bar and Grill Insurance Program, A Fast Food Restaurant Insurance Program and a Catering Insurance Program. Visit us on the web at www.TheRestaurantInsuranceStore.com or call us toll free at 877-687-7557 and find out how we can help you find the coverage you want and a price that will astound you.

The source information for this blog was taken from blog articles which can be found at www.RestaurantInsuranceGuy.com.

Business Income Insurance for Restaurants

Running your restaurant business involves risk of course and you can look around you and see the things you need to insure in case of a large loss like a fire. Dishes, equipment, furniture, supplies, all of these seem obvious. But there are also some hidden, less obvious things for which you should insure. This article will help you understand one of the tools for covering these hidden assets and liabilities – The Business Income Insurance Form.

These days, most restaurant owners have a package policy called a businessowners insurance policy as the centerpiece of their insurance program. This policy can cover the building, your contents, any improvements and betterments that you have made to the building as well as more esoteric items like employee theft and employment practices liability insurance. One of the coverages that is often included in this packaged policy is Business Income Insurance.

Business Income insurance coverage is triggered when you have a covered loss that is large enough to close down your operations for some period of time. During this time of shut down, you will have ongoing expenses that will continue even though you are not bringing in revenue. This can vary from rent to monthly fees on equipment leases and marketing products as well the profits that you lose by being out of business. In addition, there are also extra expenses that you will incur in order to try and expedite the process of getting back into business more quickly. These can be temporary rental of a new location, overnight shipping costs etc.

Sadly, few restaurant owners take the time to understand before a loss is how this built in Business Income coverage will affect their employees. Policies vary of course but the most common language in North Carolina business owners policies for restaurants will allow you to continue to pay for employee payroll as long as you can put these people to work in some capacity, even if that is helping you get back in business quicker. If keeping your employees available to you after you have been out of business for 4 or 5 months is important, then you should tailor your Business Income protection to make sure that ongoing payroll expense is included. In some cases this may mean that the businessowners policy is not the right form and you may need a true commercial package policy that will allow a more customized business income plan.

Last of all, I would be remiss in this discuss if I didn’t mention to you the importance of putting together a disaster plan before the disaster strikes. Take the time to think about what types of things could put you out of business temporarily and how you would deal with that particular situation from a non insurance standpoint. Take the time review what is available to you in terms of disaster recovery plans and do a bit of pre-disaster study of some of the companies out there that specialize in restaurant disaster recovery and restoration programs.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping restaurants across North Carolina and South Carolina with their restaurant insurance programs. We go a step further with our Partners Page which helps our clients find new customers from our customer base. We understand that not all restaurants are the same and they don’t all need a one size fits all insurance plan. For that reason we have established 5 different restaurant insurance programs; the fine dining insurance program, the casual dining restaurant insurance program, the fast food insurance program, the bar and grill insurance program and a specialized program for caterers. If we can help you with your NC or your SC restaurant insurance needs, please visit us on the web at www.TheRestaurantInsuranceStore.com or call us, toll free, at 877-687-7557.

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

Restaurant Insurance – Employee Theft, The Silent Profit Killer

As the owner of a restaurant you have many things to worry about. Where are the clients coming from? Am I putting out the best product I can? Does my targeted demographic fit my marketing plan? Where do I find quality employees? And on and on it goes. But I find that very few restaurant owners take the time to study carefully how to prevent and protect their business from employee theft.

Employee theft takes on many faces, from free meals while the boss isn’t looking to taking home food for family members and giving out free food to friends. These are annoying and a drain on profits, but each restaurant owner has the responsibility to make sure that each employee understands the rules and the guidelines and that these rules are followed without exception. There are many resources to help you prevent employee theft and spot employee theft and I will tackle this in more detail in a future blog. This blog is about setting up a last line of defense that will protect your restaurant from destruction should you have a serious and determined thief on your payroll.

Most restaurant insurance programs have an option to include a minimum amount of protection on the businessowners policy for employee dishonesty coverage. This is an excellent way to build in last resort protection for your restaurant. But don’t just gloss over this add on coverage. Take the time to think carefully about what you stand to lose and how you would deal with it. In most cases, you can purchase high limits of coverage here. My insurance agency was attacked in the late 1990’s by one of our employees who made away with over $10,000 before we caught here. I have a neighbor who lost $300,000 over a very short time frame when one of his employees found a quick and easy way to steal from him and his partners. The point here is that if you might need higher limits, be willing to buy them. At the very least, think carefully through the process.

Another thing to consider with employee dishonesty coverage on your restaurant insurance policy is that in most cases the company will not pay off unless you prosecute the thief. For some employers this is a hard thing to instigate so don’t buy the coverage if you aren’t going to be able to go through what you have to do to make the claim legitimate. Also, your deductible will also apply but bear in mind that in most cases if the insurance company decides to prosecute and if they are able to collect any money from your employee, then your deductible will be reimbursed first.

At Clinard Insurance Group, located in Winston Salem, NC, we specialize in helping restaurant owners all across North Carolina and South Carolina with their restaurant insurance needs. It doesn’t matter if your restaurant is in a metropolitan area like Raleigh, Durham, Charlotte or Greensboro, or if you are located in a small town like Kernersville or Oxford NC, we have the knowledge and the tools to help you keep your restaurant insurance costs low. And we go a step further by implementing our Partners Program to help drive new customers to your establishment to help you grow your top line revenue as well. In addition, we know that not all restaurants are the same so we have developed specialized programs for the different types of restaurants out there. We have a Fine Dining Restaurant insurance program, a Casual Dining Restaurant insurance program, a Fast Food Restaurant insurance program, a Bar and Grill insurance program, and a Caterer insurance program. For more help with your NC or your SC restaurant, please call us, toll free, at 877-687-7557 or visit us online at www.TheRestaurantInsuranceStore.com.

The source information for this article can be found in its entirety http://www.restaurantinsuranceguy.com/