Types of Insurance You Need For Your Restaurant
By Lorri Mealey, About.com
One area in the restaurant business you do not want to skimp is insurance. Insurance can protect you and your business for a myriad of problems, from broken equipment to liability lawsuits. Depending on where you live, you will need certain types of insurance for your restaurant. You will also need to carry certain types of insurance to satisfy your bank loans and mortgage.
The most common types of restaurant insurance available include:
• Property Insurance- – Protects your property in case of fire or other events. It may not cover natural disasters, such as floods or earthquakes (see below for a policy that does.) If you have any kind of mortgage on your business and/or equipment, then you should carry a property insurance policy.
• General Liability – This is the umbrella policy that protects you in the event someone slips and falls in your restaurant, gets sick after eating there (whether it was your fault or not). This is a must have in today’s sometime sue-happy world.
• Liquor Liability – Most states require that any establishment holding a liquor license carry liquor liability as part of their insurance. It helps protect you if a customer has too much to drink and drives and hurts themselves or someone else.
• Automobile Liability – If you have a company vehicle, this is a good insurance to have. It may be covered in your general liability, but always check with your insurance agent first.
• Workers Compensation – Protects you if an employee is hurt at work. Most states require that all employers carry some type of workers comp.
• Unemployment Insurance – Is for your employees who no longer work for you until they find employment.
• Life Insurance – Depending on your mortgage and financing you may need to carry a hefty life insurance policy to satisfy your lender. It is also a good idea to have life insurance, in case something does happen to you and your family isn’t left with a restaurant they don’t know how to run and bills they can’t pay.
There is insurance for just about any object, action or person out there. Here are some other types of insurance you can purchase for your restaurant. But keep in mind, these extras will cost you as much or more than whatever it is you are insuring.
• Loss of Business Insurance – If you lose sales through a specific cause, this type of policy can recoup some of the income. Keep in mind the premiums and deductible may make you break even, depending on how much you lose.
• Food Contamination Insurance - If you lose power, because of fallen power lines or a storm, and the entire contents of your walk-in and freezer spoil, this policy would pay to replace the food.
• Specific Peril Insurance – This covers many natural disasters that general liability insurance doesn’t. Events like earthquakes, floods or power outages due to either, may be covered under this insurance.
Use a trusted insurance agent when buying insurance when you are opening a new restaurant. They will know the local and state laws pertaining to how much insurance you need and can help you decide how much more you want to carry.
Tuesday, September 2, 2008
Friday, August 22, 2008
~RESTAURANT HAZARDS~
No matter how careful you and your employees are, your business may still experience an unforeseen injury to a customer on your property, from a meal you prepared or possibly an employee who has imbibed a little too much. You may also experience a robbery. This section describes some common and not so common hazards found in restaurants which may cause your business a financial loss.
Consider each hazard and determine if you have reduced your potential to loss by implementing safe operating practices and providing appropriate training to your employees.
The principal hazard in most restaurants is fire. A restaurant fire has the potential of a total loss to the building and contents, significant business income loss, and injury or loss of life. Common causes of a restaurant fire include:
Consider each hazard and determine if you have reduced your potential to loss by implementing safe operating practices and providing appropriate training to your employees.
The principal hazard in most restaurants is fire. A restaurant fire has the potential of a total loss to the building and contents, significant business income loss, and injury or loss of life. Common causes of a restaurant fire include:
- Grease buildup leading to kitchen fires
- Inadequate or infrequent cleaning of hoods, ducts, filters, deep fat fryers and fans
- Absence of automatic and manual fuel cutoff valves
- Improperly extinguished cigarettes and candles
- Inadequate wiring or other electrical defects
- Overheated motors in refrigeration and air conditioning units
GENERAL LIABILITY
General Liability exposures include the potential for serious injury or death to large number of people on the premises in the event of a fire, as well as serious slip and fall injuries. Additional common hazards include:
- Stairways without adequate railings
- Change in elevation without a posted notice
- Defective or broken furniture
- Burns from hot plates or spilled beverages
- Cuts from broken glass or chipped dishware
- Inadequate or poorly marked/lit emergency exits
- Worn or torn floor coverings, foods and liquids spilled on floors
- Inadequate lighting on steps or in passageways Poorly maintained parking lot (inadequate
- lighting, potholes, debris), accumulation of ice and snow
PRODUCTS LIABILITY
Product liability losses are common in a restaurant environment. They are generally not serious, but frequency can become a problem if good food sanitation practices are not implemented and followed. Good controls are necessary to limit frequency and prevent a potentially severe loss. Some common exposures are:
- Foreign objects in food
- Food poisoning as a result of spoilage, contamination or deterioration of food
- Improper temperature in food storage facilities
- Expired shelf life on products
- Improper use of pest control and cleaning chemicals
- Inadequate supply of hot water for dishwashing Inadequate housekeeping practices
LIQUOR LIABILITY
Restaurants that serve alcohol must have appropriate controls in place to limit exposures to liquor liability claims. It encompasses that liability arising from the selling, serving, or distribution of alcoholic beverages. The extent of the restaurant operator's liability varies based on state laws. Contributing exposures are:
- Serving liquor to minors
- Serving liquor to intoxicated persons
CRIME EXPOSURES
Exposure to crime includes burglary, robbery and theft, including employee theft and dishonesty. Some contributing factors are:
- Large amounts of cash on premises
- Lax management attitude toward crime prevention
- Careless hiring practices or supervision
- High employee turnover and/or former employees with keys to the restaurant
- Careless accounting practices and checking account reconciliation
Tuesday, August 19, 2008
How to Deal With Drunk Customers
By Lorri Mealey, About.com
If you are planning on serving liquor at your new restaurant, than you should be familiar with all the laws and responsibilities that come with it. While liquor laws vary from state to state, in most cases if a person is involved in an accident while drunk you, as the owner of the establishment that served them, may be held liable as well.
The best way to avoid any potential lawsuits stemming from drunkenness is to not serve a customer who appears inebriated. Of course, some people can hold their liquor very well, and your staff may not realize the patron is drunk until it is too late. If you are faced with a customer who has had too much to drink, here are some tips for handling them:
• STOP serving them immediately. If the customer has wandered in from another bar or restaurant, you can refuse to serve them. They may claim you’re acting illegal, but your not. You are acting responsible.
• Offer the customer some coffee and some food, as an alternative to a drink.
• Call a cab or another ride home for the customer. Do not let them drive!
• If a customer becomes belligerent or angry, escort them outside of the restaurant and call the police, who can look after the customer, until he or she is safe and sober.
Remember, protecting your assests is the number one priority! You must make sure that every one of your employees understand the severity of this issue. Many establishments get sued every day in the results of over serving a patron. To most bartenders, a healthy tip is more important than saying "no". But the bottom line is that you need to protect yourself and your business!
A good idea would be to have an incodent report log for situations just to cover this area. Something with a description of what the customer was wearing, his actions, as well as the precautions your employees took.
I was at a small local place with a friend of mine this past Saturday evening and there was a fairly larger gentleman bellied up to the bar that looked to be extremely intoxicated. I motioned the bartender over and suggested he no longer serve this fellow, he sort of just nodded, but proceeded to pour this guy shot after shot. The guy was buying everybody drinks, leaving a large tip for every order. The next thing I know, his chair falls backwards into everybody else. He can't get up on his own strength and it takes two large employees to literally drag him out to the sidewalk. This could potentially be a big problem for the owner of this place if this gentleman hit his head or was to injure himself in any way...or worse, if he drove home. Over serving is a very important topic for you to cover with your employees, a topic that could save you a lot of hassle.
If you are planning on serving liquor at your new restaurant, than you should be familiar with all the laws and responsibilities that come with it. While liquor laws vary from state to state, in most cases if a person is involved in an accident while drunk you, as the owner of the establishment that served them, may be held liable as well.
The best way to avoid any potential lawsuits stemming from drunkenness is to not serve a customer who appears inebriated. Of course, some people can hold their liquor very well, and your staff may not realize the patron is drunk until it is too late. If you are faced with a customer who has had too much to drink, here are some tips for handling them:
• STOP serving them immediately. If the customer has wandered in from another bar or restaurant, you can refuse to serve them. They may claim you’re acting illegal, but your not. You are acting responsible.
• Offer the customer some coffee and some food, as an alternative to a drink.
• Call a cab or another ride home for the customer. Do not let them drive!
• If a customer becomes belligerent or angry, escort them outside of the restaurant and call the police, who can look after the customer, until he or she is safe and sober.
Remember, protecting your assests is the number one priority! You must make sure that every one of your employees understand the severity of this issue. Many establishments get sued every day in the results of over serving a patron. To most bartenders, a healthy tip is more important than saying "no". But the bottom line is that you need to protect yourself and your business!
A good idea would be to have an incodent report log for situations just to cover this area. Something with a description of what the customer was wearing, his actions, as well as the precautions your employees took.
I was at a small local place with a friend of mine this past Saturday evening and there was a fairly larger gentleman bellied up to the bar that looked to be extremely intoxicated. I motioned the bartender over and suggested he no longer serve this fellow, he sort of just nodded, but proceeded to pour this guy shot after shot. The guy was buying everybody drinks, leaving a large tip for every order. The next thing I know, his chair falls backwards into everybody else. He can't get up on his own strength and it takes two large employees to literally drag him out to the sidewalk. This could potentially be a big problem for the owner of this place if this gentleman hit his head or was to injure himself in any way...or worse, if he drove home. Over serving is a very important topic for you to cover with your employees, a topic that could save you a lot of hassle.
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