Restaurant Insurance – Your Business Is A Niche Within a Niche

In my last blog I addressed the fact that as a restaurant owner, you owe it to yourself and your business to do a bit of research to be sure that you are dealing with a specialist. And the beauty of that is that you will often be able to hire that specialist for less money that you will spend if you let an agent who doesn’t specialize in restaurant insurance do the work for you. This week, I want to look at specialization in a more drilled down fashion. In this case I want to take a look at the specialization of the restaurant insurance policy or program itself.

It is clear to even the most casual observer that not all restaurants are created equal. In fact, that’s what so many of us love about eating out, we have many different choices to suit out time constraints, our moods, or even the level of impression we want to make on our dining partners. And as a restaurant owner, you work hard to play to your niche market, to give them exactly what they are looking for when they visit your establishment. So it should go with your restaurant insurance policy.

One trend in insurance over the years has been to consolidate all of the different types of coverages and protections into one big, packaged up, policy. This has made selling the policy a bit easier for the less sophisticated agent, I mean when you throw in everything but the kitchen sink, what’s not to like? But the truth is that there are costs associated with all of these add on coverages, and if you need them, then this package concept is great, you are spreading the costs of what you need across many different businesses that are purchasing protections in the package that they don’t need and will never use. But, look at it from the other direction and you don’t want to be the business that is buying things you don’t need and as such, subsidizing other businesses that do need those coverages.

This is why, beyond needing an agent who specializes in restaurants, you need one with a program that specializes in your specific type of restaurant. If you are running a fast food restaurant, you may not need a built in $25,000 limit for fine arts coverage that a fine dining restaurant might need. And if you are running a catering operation, will you need $25,000 of built in employee dishonesty protection that might be something a restaurant that handles lots of cash receipts might need? The examples here are seemingly limitless but the important point is that you should watch your policy carefully for add on coverages that you might never need but that you are paying for in your package. Likewise, you want to be sure as well that the types of protections that you do need are available and available in the limits that you need. A built in $5000 of spoilage coverage might be far too much for one restaurant and not near enough for another.

Take the time to look at the add in coverages that are on your current restaurant insurance policy and make sure you understand how each of them works, and be sure that the limit of coverage is the right amount for you.

At Clinard Insurance Group, located in Winston Salem, NC, we are a restaurant insurance specialist. We insure many different kinds of restaurants all across North Carolina and South Carolina. If we can help you with your restaurant insurance questions, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com. Remember, we have specialized insurance programs for 5 different kinds of restaurants. Check the list below and click on the links to see our specific niche within a niche restaurant insurance programs.

Fine Dining Restaurant Insurance

Casual Dining Restaurant Insurance

Fast Food Restaurant Insurance

Bar and Grill and Tavern Insurance

Catering Company Insurance

The source information for this blog can be found in full at the blog located at http://www.restaurantinsuranceguy.com/.

Restaurant Insurance – Equipment Breakdown Coverage Revisited

In the past I have blogged about equipment breakdown coverage for restaurants and I have discussed one of the more obvious reasons for needing it – breakdown of heating or air conditioning systems. However, with rapid technological changes in the restaurant industry, there are new areas of concern that give new weight to the value of carefully considering adding this protection to your restaurant insurance policy.

Specifically, I want you to think of the new technologies that you may have added to your restaurant in the past 5 years that you now rely on for smooth day to day operations. Which of these could you do without for an extended period of time? How much would it cost you to replace lost income due to the breakdown of this equipment? For instance, many restaurants now use sophisticated, computer based cash registers that integrate with point of sale software systems. What losses would you face if this system broke down? Could you stay open?

Another area of consideration for your equipment breakdown coverage is your commercial grade sound system if you have one, or your inventory scanner system or even your time clock and payroll system that might be run from your computerized register. If these systems go down, your restaurant could be crippled and the lost revenue while you struggle to get your systems running again could be substantial.

All of these new electronic systems are at risk for power surges and electrical arcing. Unbudgeted losses from breakdown of these systems can be significant enough that for some restaurants equipment breakdown coverage should no longer be considered an optional coverage but rather a critical one. Take a moment to check your restaurant insurance policy and see if you have equipment breakdown coverage. After the systems break, it will be too late to go back then and add the coverage.

Restaurants are a unique kind of business and they present unique insurance challenges. If you own a restaurant then you should take the time to seek out an insurance agent who specializes in restaurant insurance. Don’t trust your protection to a generalist. You will likely save money and be better protected if you find an agent who understands restaurants and insures dozens or even hundreds of them.

Clinard Insurance Group, located in Winston Salem, NC is an independent insurance agency that specializes in restaurant insurance. We write insurance for more than one hundred restaurants in North Carolina and South Carolina. Our understanding of how each restaurant is different from the others has led us to create 5 distinct restaurant insurance programs. We have a fine dining restaurant insurance program, a casual dining restaurant insurance program, a fast food restaurant insurance program, a bar and grill and tavern insurance program and a specialized insurance program for catering companies. If we can help you with your restaurant insurance needs, or if you simply need a professional second opinion on any restaurant insurance issues, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.

You can find the original source material for this article at www.RestaurantInsuranceGuy.com.

Restaurant Insurance Basics – Part 3 of 10 – Business Income Insurance

Part 3 in our 10 part series discusses Business Income insurance and how to use it to correctly protect your loss of income after insured disasters.

Business Income, sometimes referred to as business interruption insurance is often overlooked when the restaurant owner sets up his or her restaurant insurance program. This is because with most businessowners policies, this coverage is now included automatically. This is of course a great convenience for those who might overlook this protection in the first place. But this automatic protection does not remove the need for you to take the time to understand this coverage and make sure that it will respond in the way you expect after a large loss.

Before this coverage was simplified and added into the businessowners policy coverage, it was sold separately under the name business interruption coverage. If you still have a package policy as opposed to the businessowners form, then you will probably need to add this coverage by endorsement. Either way, there are several different elements to this protection and you should understand each clearly.

Before I tackle the different elements of business income protection, it is important to note that business income coverage is a consequential loss form. That means, the losses that you incur which are to be covered by this part of your insurance policy have to be the consequence of an insured peril in the first place. For instance, if a fire burns your building down, then the fire loss is covered by the businessowners policy and so therefore, the business income coverage will apply. If, on the other hand, you have a flood loss to your restaurant, then that type of loss is not covered by the businessowners policy so you will not have protection for your lost income.

To understand these elements of this protection, I will focus on the most common form of policy, the businessowners policy. Bear in mind that these are generalities and you should discuss your specific form with your agent if you have difficulty understanding it. First of all, business income is usually defined as net profit or loss before income taxes that would have been earned or incurred if no physical loss or damage had occurred. So, we are talking about lost profits here. But what else should be considered? Well, the form usually also includes normal continuing operating expenses. These are expenses that will continue on even when you are shut down and out of business. They might include rent, electricity, water etcetera and most importantly payroll. If you can’t pay your employees while you are shut down, you might lose them. Often though, the coverage for payroll can be limited in both time and scope. Many common forms only include payroll for 60 days past the date of the physical loss that triggered the business income coverage. In addition, most forms exclude payroll for owners, executives, department managers and employees under contract. Also, you should check your policy form carefully to see if any of the following are included or excluded in the definition of payroll: employee benefits, fica payments you pay, union dues you pay, and workers compensation premiums you pay.

One additional element of this protection deals with extra expense. Extra expenses are those that you must bear in order to get your restaurant back in business more quickly. You may have to expedite shipments or rent another location to get in business while your old one is repaired. You should put together a firm and clear disaster plan for what you would do if your restaurant is destroyed by fire and then be sure that your business income protection will respond in a way that works well for your plan.

I think that the business income section of your policy is a place that points out just how important it is for you to deal with an agent and company that specializes in insuring restaurants. There is too much to lose here and you can’t fix it very easily after the big loss has occurred. Take the time to make sure you have hired the professionals that you need to make sure you don’t lose your livelihood in an accident that is compounded by poor disaster and risk management planning.

At Clinard Insurance Group in Winston Salem, NC, we want all insurance consumers become better informed buyers. Insuring and helping restaurants all across North Carolina and South Carolina is our specialty. We even have ways to help you gain and keep more customers. For one example of that type of program, visit our partners page. We also know that not all restaurants are the same. That’s why we have created 5 different restaurant insurance programs so that you can choose a program more tailored to your needs. We have a fine dining insurance program, a casual dining restaurant insurance program, a fast food insurance program, a bar and grill and tavern insurance program and a special insurance program for caterers. If you need help or advice for your NC restaurant or your SC restaurant, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com. Don’t trust your livelihood to an agent that doesn’t specialize in restaurants. There is just no need to take that risk.

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

Restaurant Insurance Basics – Part 2 of 10 – Liability Insurance

This is the second in a 10 part series on the how to’s of insuring your restaurant. In this article we discuss liability insurance, what it is and what issues you should consider when purchasing your liability insurance.

Generally speaking your liability insurance will be a part of your package policy that also includes property insurance. For help on property insurance issues for your restaurant, check out part 1 of this series by clicking here.

Your liability insurance for your restaurant is generally divided into two kinds of protection. They are premises liability and products liability. Premises liability insurance provides protection for your restaurant for damages caused by accidents for which you can be held liable that happen on your premises. The easiest example of a premises liability claim would be a customer who slips on a wet floor and is injured as a result. Products liability insurance provides protection for your restaurant for injuries or property damages caused by the products that you make and sell; the food in your restaurant. A common example of a products liability claim would be a broken tooth when a customer bites down on some foreign matter in their entrée.

The liability section of your restaurant insurance policy should provide you with both premises and products liability. When you look at the limits of coverage provided by these different liability coverages you will usually see a per occurrence limit and a general aggregate limit. The per occurrence limit is the most that the insurance company will pay on your behalf for any one occurrence of that type. The general aggregate limit is the most that your insurance policy will pay in any one policy year. So, each claim that you have in a policy year will reduce the amount left on your general aggregate limit. Pay very close attention to these limits and make sure that you are comfortable with the limits on your policy. Generally I would advise you to purchase the highest liability limits that you can afford. The reason is that liability exposures, unlike property exposures, are unlimited. For example, if you own your restaurant building and it burns down, you know how much you will lose and what it will take to rebuild it. But with liability claims, you really can’t predict in advance how high the damages will go. For that reason the most prudent approach is to purchase the highest coverage limits that are available.

Liability insurance is rated based on a factor that helps anticipate your exposure to risk. Some seem like better predictors than others to me. Most common these days is to tie the liability rate to the property insurance costs, using a sliding scale or a flat amount for the different levels of liability coverage. This approach is most common in the businessowners policy form and is more about simplification than anything else. Other policy forms will have a rate per $1000 of gross sales to calculate your liability insurance premium. These types of formats will often require an audit at the end of the policy term to determine your actual gross sales for that time period. If you overestimated your gross sales, then you would be due a refund, if you underestimated them, then you would owe more money. If you have this type of policy form, be sure to read my blog on avoiding the audit trap.

Take the time to really think about your liability insurance limits and make sure that your policy is set up correctly so that it will respond the way you want it to in the event of an accident. If you are not using an agent who specializes in insuring restaurants, you should seriously consider doing so. Ask your agent if he or she insures at least 25 restaurants and if the answer is no, you may want to consider using an expert to protect your largest investment and your livelihood.

At Clinard Insurance Group in Winston Salem, NC, we want all insurance consumers become better informed buyers. Insuring and helping restaurants all across North Carolina and South Carolina is our specialty. We even have ways to help you gain and keep more customers. For one example of that type of program, visit our partners page. We also know that not all restaurants are the same. That’s why we have created 5 different restaurant insurance programs so that you can choose a program more tailored to your needs. We have a fine dining insurance program, a casual dining restaurant insurance program, a fast food insurance program, a bar and grill and tavern insurance program and a special insurance program for caterers. If you need help or advice for your NC restaurant or your SC restaurant, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com. Don’t trust your livelihood to an agent that doesn’t specialize in restaurants. There is just no need to take that risk.

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

Restaurant Insurance Basics - Part 1 Property Insurance

This article is the first in a 10 part series that will cover the basics of insuring your restaurant. Our goal here is to give you a bird’s eye view of the options and issues that you, as the restaurant owner, should consider as you go about evaluating your current insurance coverage or as you tackle the job of insuring your restaurant for the first time. Part 1 covers the property insurance needs that you will have.

Let’s start by touching on basics of the property that you need to insure. Some of this is obvious and some of it less so. The most obvious items here are the building, if you own it or are responsible for insuring it, and the contents in the building such as tools, equipment, inventory, dishes, tables etc. There are also a few less obvious property items to insure. The first of these would apply to restaurants who don’t need building coverage but who have invested in fixtures and remodeling that is permanently attached to the building. For these items you need tenant’s betterments and improvements coverage. Bear in mind that this coverage is added at the building insurance rate but will only apply to items that you actually did pay to install. If your lease requires you to insure the air conditioners on the roof but you didn’t actually pay to install them in the first place, your tenant’s improvements and betterments coverage will not help you out if they are hit by lightning and destroyed.

This brings me to another issue that is often overlooked by restaurant owners. It is very important that you take the time to read your lease carefully to see just what you are agreeing to in terms of insurance requirements. You may be required to insure things that don’t belong to you and this may force some extra work and research on your part as you set up your property insurance coverage. For more detailed help on this, read my blog about leases and their impact on restaurant owners’ insurance policies.

One of the sub categories of property coverage deals with the valuation of the items that you are covering. In general, there are 2 choices of valuations, actual cash value and replacement cost. Actual cash value is defines as replacement cost coverage minus depreciation. Replacement cost coverage is the cost that it will take to replace that item with a new one at the time of loss. Most policies are written on a replacement cost basis and in general that is what I would recommend. But there are some situations, for instance with older buildings, when you may want to consider using actual cash value as your valuation method. For more detailed information on this situation, read my blog here.

The valuation decision is an important one in that it will help you decide how much insurance to buy for the building and contents and betterments. You should always insure for the full value (either replacement value of actual cash value) of the item or items you are insuring. That is because most policy will have a coinsurance clause. Coinsurance is the tool that insurance companies use to make sure all of the policyholders carry full value. The reason that is important to them is that most losses are partial losses and some people would prefer to reduce their insurance costs by insuring for only part of the value of their assets. If this were to happen, then those who insure for full value would be heavily subsidizing those that purchased partial insurance. To remedy this problem, most all property insurance policies have a coinsurance clause. This clause imposes a penalty at the time of loss on those who did not carry full value insurance. The coinsurance clause is a bit complicated but important to understand so please read my blog about coinsurance here.

The last consideration that this article will cover regarding your restaurant insurance property coverage is your deductible. Your deductible is the amount of money that you will spend in the event of a loss, before the insurance money kicks in. Since insurance is best used for large, catastrophic losses, it is generally felt that you should carry the highest deductible you can comfortably pay without a huge disruption to your cash flow. Always evaluate the deductible you choose against the savings it provides on your insurance policy costs. You can evaluate it by considering how many years you would have to go without a loss to break even on the additional deductible costs versus the amount you are saving by moving up to that deductible level. But remember, when it comes to restaurant insurance, your deductible will apply to each and every loss all over again. This is not like health insurance which generally has a per year deductible.

Taking the time to evaluate all of your property exposures and carrying full value replacement cost protection on them will pay off in spades should you ever experience a property loss to your restaurant. Understanding your lease requirements and evaluating your deductible value will help you make sure you have the appropriate coverage and can afford the policy and the loss should it happen. In part 2 of this series we will take the time to study liability insurance and its implications for the restaurant owner.

At Clinard Insurance Group in Winston Salem, NC, we work hard to help insurance consumers become better informed buyers. We specialize in helping restaurants all across North Carolina and South Carolina with their restaurant insurance. We understand that not all restaurants are the same so we have designed 5 different restaurant insurance programs so that you can have a program more tailored to your needs. We have a fine dining insurance program, a casual dining restaurant insurance program, a fast food insurance program, a bar and grill and tavern insurance program and a special insurance program for caterers. If you need help or advice for your NC restaurant or your SC restaurant, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com. Don’t trust your livelihood to an agent that doesn’t specialize in restaurants. There is just no need to take that risk.

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