If you are in the restaurant business, you know it’s fast-paced and lively; however, you also know that anything can happen! Whether you are facing challenges of accidents (slip and fall), covered losses that may disrupt your day-to-day operation(s), or financial losses, you must be prepared to have the right insurance protection in place so when the unexpected scenario happens, you have the right insurance coverage for your restaurant. Last month I focused on the typical coverage options for restaurants and this month, the focus is on additional coverage options for you to safeguard your business and business reputation in the restaurant industry.
Below Are Some Additional Coverage Options to Safeguard Your Restaurant, but Not Limited to:
Employment Dishonest Coverage- Employee misbehavior can result in serious financial losses. For example, if you have an employee(s) that are stealing from you or committing fraudulent acts, you know that your business reputation is on the line, not to mention financial stability. In the restaurant industry, you depend on your staff to handle cash and customer transactions, computer data, and inventory so this type of protection is essential in the restaurant business. The definition of “dishonest acts” includes fraud, theft, embezzlement, forgery or any other situation that an employee does that results in a financial loss to you.
Some examples of dishonest acts include:
- An employee stealing cash, equipment, or inventory
- An employee altering records/transactions
- An employee stealing credit card information
The type of coverage typically applies to existing employees as well as employees no longer working there. You may not realize that employee dishonesty has been happening until months later when you notice something suspicious, or you begin to lose unexplained money. Once the restaurant becomes aware, a claim can be filed to regain the financial losses that have happened.
Hired and Non-Owned Auto Liability Insurance- HNOA is designed to protect your restaurant from liability (bodily injury and property damage) that may arise from the use of autos that are not owned by the restaurant, but still being used for the scope of business. If you use vehicles for catering, delivery and any other business purpose, you should highly consider this type of coverage. Hired auto liability insurance covers liability arising from the use of autos the business hires or rents for business dealings, which may include leased cars, rental cars, or vehicles acquired for explicit business duties.
Spoilage Insurance- If your restaurant uses a lot of fresh ingredients and perishable foods, you understand that food/ingredients can spoil. Spoilage insurance is designed to protect restaurants and other food industry-based businesses from encountering financial losses caused by the deterioration or spoilage of perishable goods.
Imagine if your restaurant experienced a sustained power outage and you just purchased an abundance of seafood, meat, and dairy products only to have them spoil. This insurance protection is crucial for restaurants, given the cost of losing perishable goods, not to mention maintaining the health and safety regulations for your diners.
Below are some common causes of spoilage, but not limited to:
- Natural Disasters/Other Losses- Accidents such as floods, fires, or severe weather scenarios can certainly compromise perishable goods and thus, disrupt business operations.
- Power Outages- If there is an extended power outage that shuts off your refrigeration system, you can expect those perishable items to spoil and unable to utilize.
- Equipment Failure- If your freezer or refrigeration system malfunctions, it can affect the freshness of your food/ingredients.
Losing perishable inventory can impact the financial standing of your business along with your business reputation. Your business ethics are based on maintaining safe and high-quality food to your customers.
The good news is that this protection typically covers the expenses of replacing the perishable goods and some policies may include “business interruption” costs to cover the lost income during the time period you had to halt business operations due to a covered loss.
Food Contamination Insurance- Imagine serving dinner to many customers and you find out that many of them got sick from contaminated food. This can result in serious consequences, both financial and personal. This type of insurance is designed to protect food establishments from losses associated with contamination of food products, which is crucial in the restaurant industry. Food contamination can result from many different scenarios from improper food handling, cross-contamination, poor staff hygiene, or bacterial outbreaks. This protection will typically pay to replace the contaminated food, replace lost income, and equipment clean-up, but keep in mind that if someone sues your business, it will not be covered under this type of coverage option.
Protect Your Alabama Business Reputation Today!
Having the right type of insurance protection is essential to the success of your Alabama restaurant. It’s imperative to focus on the outstanding dining experience for your customers and leave the insurance plan to us. Burkett & Associates understands the unique challenges to running a restaurant and we can take a proactive approach to securing the right insurance coverage tailored to your specific business needs. Don’t wait! Call us today at 256-704-7400.
