In every restaurant insurance policy there are core coverages that cover the most important aspects of your restaurant, bar, or brewery. Without these coverages in place it could financially devastate your business. Worse yet it could financially devastate you and your family as well. These coverages are the meat and potatoes of your restaurant insurance policy.
Restaurant Insurance: Focus on the Meat & Potatoes, Not the Desserts.
Most restaurants and bars can qualify for a restaurant insurance policy that’s called a BOP, short for Business Owners Policy. BOP’s not only offer the meat and potatoes but they offer the desert as well. The dessert offers some nice coverages at minimal cost. These coverages are great to have but often times restaurant owners can focus on all these “dessert” coverages a little too much, leaving themselves exposed to the greatest dangers.
The Meat & Potatoes: Liability & Property Coverage
- General Liability: The general liability of your restaurant insurance policy is what protects you if someone where to get injured at your restaurant or even felt like they were verbally attacked. It covers the damages they had and if they decided to go after you legally as well. General Liability claims are most often the largest claims and can destroy everything you have worked so hard for up to this point, leaving the future of your business and your own financial stability in question if not insured properly.
- Liquor Liability/ Dram Shop: Very similar to your General Liability except one key thing. It is intended to cover any situations that arise in relation to alcohol. For example, if a person you served was involved in a crash injuring other people, they could hire a lawyer and sue every bar that the intoxicated patron was at. Even if you only served that person one drink early in the evening, you can still expect to be sued. Liquor Liability is intended to cover you, the establishment, and the server for any legal fees, settlements, and damages.
- Property Coverage: This coverage is actually divided into two basic parts. Your building and your content that the business owns. If you rent the building chances are you don’t need to insure the building unless you have a triple net lease. There are several different ways to insure your property whether it’s at replacement cost, ACV (Actual Cash Value), Agreed Value, or Stated Amount. All work differently so be sure to understand what you are getting when you insure your property.
The Dessert: Additional “Nice to Have” Coverages
Nice to have coverages can consist of Food Spoilage, Equipment Breakdown, Lock Replacement, Employee Theft, Electronic Data, and many other types. All nice things to have but let me ask you this, did you know you had coverage for Lock Replacement? Or coverage on your accounts receivable? Chances are, if you have a BOP you have these two coverages, but you’ll never make a claim on either one of these two because you never knew you had it. Your agent can tell you, you have these coverages at policy renewal every year and you’ll still forget you had them. Carriers throw these coverages in a restaurant insurance BOP at an extremely low premium because they know the chances of actually receiving a claim are slim to none.
My point is, these “dessert” coverages are nice to have but don’t sacrifice your daily nutritional value (meat & potatoes) because all these dessert coverages look so pretty. They will not provide near the value you receive from your property and liability coverages in your restaurant insurance.
Feeling stuffed? Remember this if nothing else:
Be sure you have a minimum of $1,000,000/$2,000,000 in General Liability, $1,000,000 per occurrence on your Liquor Liability/Dram Shop (Be sure Assault & Battery is included), and make sure your building and contents are insured properly (Replacement Cost is ideal here depending on the situation). For dessert you have to ask yourself, how much is it worth to you? Only you know what price point those types of coverages are worth. It can vary from one person to the next. If it were me and I could cut dessert and save $600 in premium, I’d do it every time. But I’m a meat and potatoes kinda guy.
If you are a restaurant owner in Illinois call us or send us a message today for a complimentary policy review and rate comparison. We are more than happy to help!