When it comes to property claims made by restaurants, it isn’t a matter of if a claim will be filed, it’s a matter of when.
Research has shown that around 40% of small business owners in America will file a claim within the first decade of operating. And restaurants make up a huge chunk of this, owing largely to a higher risk of occupational hazards and damages.
Anyone working within the restaurant industry needs to be fully aware of the most common restaurant insurance claims, so you can make sure you’re adequately protected.
1. The Most Common Restaurant Insurance Claim: Fire Damage
Perhaps unsurprisingly, one of the most common types of insurance claims relates to fire damage. Combine open flames with the intense pressure of working on a busy Friday night and you’ve got a recipe for disaster.
It is vital that all employees have comprehensive fire safety training to reduce the likelihood of accidents. In addition, all equipment should be regularly cleaned and safety checked to prevent it from burning down your restaurant when you close up for the night.
2. Staff and Patron Injuries
Other common restaurant insurance claims involve injuries to either restaurant employees or patrons.
Every accident is a potential lawsuit waiting to happen, so it is essential to be insured against these eventualities.
An accident doesn’t have to just mean a customer getting hot soup poured on their lap. It could result from someone tripping on the uneven sidewalk outside your place of business. It could also mean an employee losing a finger when operating kitchen equipment.
And the danger doesn’t stop when your customers drive away in their car. Without the right liquor liability coverage, you could be on the hook if a drunk patron crashes their car on the way home.
3. Food Spoilage
Every good restaurateur knows that spoiled and contaminated food have no place in the kitchen. But what happens if a hurricane knocks out the power to your restaurant for three days and you have to throw everything out? Or your latest delivery of ground meat is tainted with E. coli?
Food spoilage and contamination coverage can help reimburse you for the costs of replacing all that food (and cleaning all your equipment) so you can get back to business. It may even cover medical tests or vaccines for your employees.
Theft is another common experience faced by restaurant owners. And it doesn’t always come in the form of an armed robbery or a dine-and-dash. A very common form of theft actually comes from employees themselves, who may steal from the cash register or skim some stock from the kitchen.
Make sure your insurance policy has specific coverage for this type of theft, as it is a lot more common than you think. In addition to this, make sure to install surveillance cameras throughout your place of business.
5. Data Breach
When you think of restaurants, most people tend to think of food, not numbers. But cyber criminals aren’t most people.
Odds are, the more business you do, the more credit card numbers you have. And—especially if you’re a small Mom-and-Pop operation—thieves and hackers are willing to bet that you don’t have high-tech security measures in place, making you the perfect target for a cyberattack.
Data breach is a lot more common than you think and remediation costs can be enough to put you out of business.
We Cover Common Restaurant Insurance Claims
An ounce of prevention is worth a pound of cure, but you can’t prevent damage and/or loss every time. Sooner or later, you’ll have to make one of these common restaurant insurance claims.
The question you have to ask yourself is, “Am I covered?”
A Business Owner’s Policy is crucial for any business, but it doesn’t offer comprehensive coverage. To truly protect your business, you’ll need to have a network of policies that cover multiple risks:
- General liability insurance
- Property insurance
- Business interruption coverage
- Liquor liability insurance
- Food contamination insurance
- Employee theft insurance
- Workers’ compensation insurance
- Employment Practices Liability Insurance (EPLI)
- Commercial auto and fleet coverage
- Data breach/Cyber liability coverage
Make Sure You’re Protected
At any given moment, all businesses are only one mistake away from having to close their doors for good. But with the right insurance coverage, you can be compensated for that loss so you can keep feeding customers and paying employees for a long time to come.
The right types of restaurant insurance can provide a safety net when (not if) you need to make an insurance claim. But the last thing you want is for your claim to be denied because you don’t have the proper coverage.
Call Harry Levine Insurance for a free commercial insurance quote to make sure there are no gaps in your insurance coverage. We’ve been one of Orlando’s premiere insurance agencies for more than 30 years and have written thousands of commercial policies for restaurants just like yours.