If you own a restaurant, bar, food truck or catering business, you are all too aware of the many hazards you face. From food spoilage to mechanical breakdowns to employees who get injured on the job, threats to your business’ financial stability are everywhere. Fortunately, The Carmoon Group offers a wide array of insurance plans to help you transfer your risk and keep your business going no matter what.
General Liability Insurance
Hospitality is a vibrant and exciting industry, but it is also fraught with risk. From slips and falls to food poisoning or assault and battery, your bar, restaurant or catering business is open to many different types of third-party claims. That’s why General Liability Insurance should be an integral part of your overall business plan.
What General Liability Insurance Covers
General Liability Insurance protects your business assets in the event a patron sustains an injury while visiting your establishment or taking part in a service you provide. For example, it will pay an injured patron’s medical expenses in the event of bodily injury resulting from many different types of incidents, such as
- Allergic reactions
- Slips and falls
- Assault and battery
- Scalds and burns
Additionally, general liability insurance will pay to repair or replace a customer’s personal property if it is damaged on your premises or while it is in your care. For example, if a patron at your restaurant slips and falls on a frayed rug and breaks his Rolex watch, the cost of repairing the $10,000 timepiece will fall on your insurance company, not you. What’s more, if the customer sues you for additional damages, your insurance will pay your attorney’s fees, court costs and any monetary settlement awarded by the court.
Personal and Advertising Injury
In addition to covering you for third-party bodily injury, medical expenses and personal property claims, General Liability Insurance provides coverage in the event you are sued for slander, libel, or other types of personal injury. For example, if your employee were to make defamatory claims about one of your competitors at a party and the competitor sued you for slander, your insurance would pick up the cost of defending the lawsuit as well as any monetary award..
General Liability insurance also covers you for copyright infringement or similar claims. So if you inadvertently misappropriate Joe’s Bar & Grill’s logo or slogan and use it as your own, your insurance will pay to defend you if you are sued and defray any damages awarded by the court.
Liquor Liability Insurance.
In many parts of the United States, a business that knowingly serves alcohol to an intoxicated patron can be held responsible for damages that person caused, either to himself or someone else. (These statutes are known as “dram shop” laws.) For example, if your bartender served a cocktail to a patron who was slurring his words and walking with difficulty, your business could be held liable if the patron wrecks his car on the way home. Additionally, if a third party is injured or even killed in the car wreck, you could be sued by the other party who was harmed.
In instances such as this, Liquor Liability insurance will cover your court costs, attorney’s fees and the amount of any monetary damages awarded by the court. It will also cover you in the event an intoxicated patron commits assault and battery against another person in your establishment — the most common cause of action against hospitality businesses in the United States.
Commercial Umbrella Insurance
Also known as excess liability insurance, Commercial Umbrella Insurance is an affordable way to expand your general liability coverage as well as several other policies you most likely own. It adds additional protection in $1 million increments, usually for just a few hundred dollars a year.
Commercial Umbrella insurance can be an invaluable extension of your hospitality business’ coverage and may even save your firm from financial ruin. Imagine if you catered a party for 200 people; your main course was contaminated with E.coli, and all of the attendees got sick. If every person filed a claim with your insurance company, the limits of your general liability coverage would likely be exhausted quickly, leaving you responsible for thousands of dollars in medical bills. What’s more, if the injured patrons decided to sue you, you could lose everything you have worked for if your general liability coverage was insufficient to pick up the tab.
Commercial Umbrella insurance will also increase your Business Automobile and the Employer Liability coverage under your Worker’s Compensation insurance policy at no additional cost.
Tip: In some states, you must have General Liability, Commercial Automobile and Worker’s Compensation insurance to qualify for an umbrella policy. Speak with your Carmoon Group agent to learn the laws and requirements in your state.
Commercial Property Insurance
If you are the owner of a hospitality business, you undoubtedly have devoted countless hours to making your business a success. You’ve perfected your menus, hired the right staff, invested in the best equipment, and slowly built up your clientele. Now that all of your efforts are finally paying off, you need to be prepared in the event disaster strikes.
Commercial property insurance protects your investment in the event your hospitality business is damaged or destroyed. It will help rebuild your business from the ground up and get you back on your feet after a natural disaster, fire or theft.
What Commercial Property Insurance Covers
Commercial property insurance covers your physical premises as well as your equipment, inventory and supplies in the event they are damaged or destroyed. It also covers any personal property located on the premises and property left by others in your care (for example, if personal items belonging to customers are damaged in a fire.) Depending on the coverage you select, it may also cover other items and issues, such as those noted below.
Business Interruption Insurance
No one anticipates a terrible disaster, but the truth is they happen all the time. Your business could be completely consumed in a structure fire or be leveled by a tornado or hurricane in the blink of an eye. What’s more, how you weather such a disaster depends to a great extent on the kind of insurance coverage you have in place.
Business interruption insurance will help pay to relocate your business and keep operations going in the aftermath of a covered event. It will also help you meet payroll and operational expenses, such as rent and utilities, until your business is back on its feet.
As the owner of a hospitality business, you rely on all sorts of equipment to store and prepare the food and beverages you serve. Grills, ovens, freezers and refrigerators are the backbone of your business, and if something breaks down, you are out of commission until its fixed. With Equipment Breakdown insurance, you get your broken equipment replaced quickly and keep your business on track.
As a food service professional, you can Imagine what would happen if a storm knocked out the power in your restaurant for several days, or all of the food in your pantry became contaminated in some way. With your inventory destroyed, you would not only have to replace everything you lost, you would have to close up shop until everything could be restored.
Usually written as an endorsement to your policy, Spoilage coverage compensates you for the cost of replacing perishable items lost due to a power failure or equipment malfunction or items lost to contamination. Some policies will also cover your lost income if you have to close your business for some period of time.
If you own a catering business or food delivery service, you may need off-premises coverage to protect items in transit or items belonging to others that are left in your care. If, example, you were at a venue and your electrical equipment malfunctioned and caused a fire, your off-premises coverage would pay to repair any damage that ensued. It will also cover your catering equipment and supplies, whether they are on your premises, being moved from place to place, or off-site at a venue.
The hospitality industry poses many risks to employees. Wait staff can be injured by tripping over customer’s belongings, or simply slip and fall while rushing through a busy shift. Chef’s often cut themselves while preparing food, and kitchen staff are sometimes burned by hot utensils, boiling water or grease. An employee might even be attacked by a hostile patron who had a bit too much to drink.
Any of these types of incidents can lead to a serious injury and time lost from work.
Workers compensation insurance is no-fault coverage that helps workers who are injured on the job. It pays the injured employee’s medical and rehabilitation expenses and a portion of his lost wages while he’s unable to work. It may also pay for job retraining in the event an injured worker can’t return to his previous role.
Worker’s compensation insurance also protects you, the employer, by providing a no-fault mechanism for injured workers to get the medical care and financial help they need. This eliminates, or at least diminishes, the incentive for an injured employee to sue you.
Employer Liability Insurance
Employer liability insurance protects your assets in the event an employee files a lawsuit alleging your negligence caused him to be injured on the job. Say, for example, your head chef is badly burned when the flame from a gas stove catches the sleeve of his shirt. He spends months in the hospital, endures terrible pain suffering, and is badly scarred for life.
Worker’s compensation insurance pays for the employee’s medical care. But he later alleges that his injuries would not have been as severe if the flames were extinguished promptly, which didn’t happen because the fire extinguisher in the kitchen didn’t work. He sues you for $500,000 in economic damages and pain and suffering.
In instances such as this, employer liability insurance will pay your defense costs and any monetary damages awarded by the courts. It will not, however, pay punitive damages if the court finds that you were willfully negligent or your behavior was criminal.