“All you need is love. But a little chocolate now and then doesn’t hurt.”
— Charles M. Schulz
5:18 a.m. MT, 7:18 a.m. ET, coconut oil infused coffee in hand; my fireplace is burning, time to do a little mind dump.
I had a fantastic day yesterday connecting with clients and friends. I work with a few newer small business owners; the idea that the youth of today have lost their work ethic is a myth. I work with many young men and women who bust their ass every day.
Our company started targeting specific verticals in 3 areas, and I’ve been asked to write a little About the insurance needs of these verticals. I’m not a fan of “insurance writing,” but occasionally will drop some risk management wisdom. If you are a regular reader of my work, you might want to skip today’s blog; I’ll return tomorrow with some inspiration.
One of the first risks I ever put on the books was a restaurant. It was a small account, but early in my career, I learned the risk management needs of a restaurant were very specific. I also learned there were different ways to rate a restaurant that allowed for a more controlled cost basis.
We have multiple restaurant insurance programs at our firm. My favorites rate the liability portion of the program by square feet. This is very helpful for restaurants that sell high-end wine. Traditional insurance programs rate by sales and if you have some higher end products, your insurance premiums go up with your sales. Rating on square footage eliminates the carriers ability to audit your liability; it locks in your general liability rate.
Speaking of wine, if a restaurant sells any booze, they need to make sure they have liquor liability. If someone leaves after consuming too much, there will be a lawsuit and the restaurant will be named in the said lawsuit.
Restaurants serve food and food is perishable, an authentic restaurant program will include coverage for spoilage. If your walk-in cooler goes down, your food will die, and so you can think of spoilage coverage as Life Insurance for your food.
EPLI or employment practices liability insurance is critical as well. We now call this the #metoo coverage. Romance seems to spring up from time to time in the intimate quarters of food service, and when a relationship goes wrong, some employees turn to the management for an “unsafe work environment.” Many of these cases are dismissed, but they must be defended, and that is where #metoo coverage is so essential.
Restaurants take credit cards, and many points of sale systems have holes that can allow intelligent thieves to steal credit cards as they are being scanned. This is much less a risk today than in the past, but making sure you have some cyber insurance is a key when creating a risk management program for a restaurant.
Workers compensation is another area of risk management that needs some attention. We had a loss a couple of years ago where a man poured a large pot of boiling soup on his foot, needless to say as the skin began melting off his foot, the claim expense began to rise. Without work comp, our client would have had to pay a six-figure medical bill.
Cameras are essential to help manage risk. The cost of video surveillance has dropped dramatically, if you own a restaurant, invest in a camera system that can allow you to monitor your locations from your phone.
If you own a restaurant, your risk management program is one of your most essential tools to protect your investment. Do not try and cut corners, engage with a firm that understands your risks. You should spend your time on serving your clients and let risk management professionals manage your risk.
Our firm has been around since the earth began cooling. We have insured multiple restaurant types and exposures. We have a keen understanding of what a restaurant needs but also what they do not need.
If you are not sure what your insurance program covers, we have a simple risk management process that can help you identify gaps in your current program and also what it might cost to cover those gaps. Most insurance programs we review have some form of under and even over insurance. We pride ourselves on matching the exposure with the correct limit. Once we create a plan, our customer service staff works to make sure that when and if there is a question, the question is answered promptly.
If you own a restaurant, have a family member that owns a restaurant, or know a restaurant owner, advise them to talk to our firm. We’re happy shiny people that understand the exposures and might create a program that helps keep them in business after a significant loss.