Risk & Business Magazine Nesbit Agencies Spring 2017 | Page 27

RESTAURANT INSURANCE
BY: CHAD NESBIT
NESBIT AGENCIES
Essential Insurance For Restaurants
What You Need To Know
W
hen managing a
restaurant (or opening
a new one), owners
cannot escape the
fundamental reality
of business management: insurance is
required to protect your business and
yourself. Whether you are losing money
because faulty equipment is causing a
slowdown in the kitchen, or you have
property damage due to fire, smoke, or
water, or you have some other liability
issue regarding food or service, you need
to know that you are not only covered
by insurance but also protected with
insurance that is the correct type for your
situation.
Specific types of insurance can vary
depending on where your restaurant
is located, but the following policies
are broad and should be held by all
foodservice businesses:
•
General Liability – This coverage
is meant to protect you from
general liabilities in your restaurant.
Examples include slip-and-fall
incidents and individuals getting
sick after eating in your restaurant
(regardless of whether the food
actually caused the illness or not).
•
Liquor Liability – Many states
require that liquor liability be held
as part of the insurance of any
establishment that holds a liquor
license. This is meant to help cover
the business in the event of a drunk-
driving incident or other incidents
involving individuals consuming too
much alcohol.
• Property Insurance – This provides
general protection for the property
in the event of fire or certain other
events. Mortgage companies often
require this type of insurance
be held. It should be noted that
property insurance may or may
not cover natural disasters, such as
earthquakes, hurricanes, or flooding.
• Workers’ Compensation – This
covers your business in the event
of an employee being hurt at work.
States typically require this type of
insurance be carried by businesses
that have employees.
• Business Income/Interruption – This
coverage maintains your business
during a temporary shutdown.
• Spoilage – In the event of a loss
of power leading to the spoilage
of contents in freezers or walk-in
refrigerators, this type of policy
could be used to cover the cost of
replacing the spoiled food.
Selecting the right insurance and
choosing how much to get is not an
easy task, especially for owners and
managers who, rightfully so, have the
more pressing matter of running the day-
to-day operations of their restaurants.
Insurance agents have knowledge of
not only the restaurant industry in
general but also the local and state laws
which may pertain to your restaurant in
particular. As with all types of insurance,
it is better to be safe than sorry. Don’t
make your decisions based solely on the
cost of the insurance you are considering.
Cheaper is almost never better. +
Chad has over 23 years of experience
in the areas of risk management and
insurance program development. Chad
currently oversees the marketing at
Nesbit Agencies. Chad helps develop risk
management plans for many different
industries and companies of all sizes. In
addition to his agency responsibilities,
Chad also serves on various insurance
company advisory boards regionally as
well as nationally.
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