Eating And Drinking Establishments Insurance FAQ

• At the minimum, restaurants, bars and food service businesses need general liability insurance.
• If they have employees they will need workers compensation in most states.
• If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto.
• There are also other specialty coverages and endorsements that might be needed based on their operations.

Package policies are the most convenient way to combine coverages. Some eating and drinking establishments are eligible for coverage under a businessowners policy. All are eligible for a commercial package policy and can use its flexibility to meet their specific coverage needs.

Types Of Eating And Drinking Establishments Package Policies:

• Businessowners Policy (BOP)
• Commercial Package Policy (CPP)

Restaurant kitchen equipment, inventory and dining room fixtures are common exposures for most eating and drinking places. Many of these establishments do not own the buildings they occupy but have long-term leases and have invested money in various improvements and betterments, including cooking equipment, dining room decorations and permanent fixtures.

A thorough property inventory helps to determine the items that can be classified as building and those items that must be classified as business personal property.

Improvements and betterments that can be separated from business personal property can be rated as building which can gain a competitive advantage.

Two primary potential loss exposures that must be covered are fire, because of cooking operations, and theft, due to the presence of liquor and other valuable inventory on the premises.

Time element coverage is important and should not be overlooked. A peak season endorsement is important if the operation has any periods of higher sales activity compared to normal activity.

Types Of Property Coverages:

• Building
• Business Personal Property
• Personal Property of Others
• Improvements and Betterments

Eating or drinking places must be open-minded and receptive to change or be ready to close their doors. Because of the constant demand by customers for something different, the inland marine coverages should be reviewed periodically as the possible means for providing coverage if the insured begins offering services at off-site locations, for computerized cooking equipment, and for the fine arts added to enhance the building decor, to name a few.

Types Of Inland Marine Coverages:

• Accounts Receivable Coverage
• Bailee Customers Coverage
• Commercial Articles Floaters
• Difference in Conditions (DIC) Coverage
• Electronic Data Processing Equipment Coverage
• Fine Arts Coverage
• Scheduled Property Coverage
• Signs Coverage
• Theatrical Property Coverage
• Transportation Coverage
• Valuable Papers and Records Coverage

Employee theft is a constant concern at eating and drinking places because of the attractive nature of the inventory. The types of crime coverage needed depend on the way the establishment operates and the covered causes of loss form that applies to the property coverages.

If operations such as catering are conducted at off-site locations, consider using the clients' property coverage form.

Types Of Crime Coverages:

• Computer and Funds Transfer Fraud Coverage
• Employee Theft Coverage
• Forgery or Alteration Coverage
• Inside The Premises-Theft of Money and Securities Coverage
• Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
• Money Orders and Counterfeit Money Coverage
• Outside The Premises Coverage

Eating and drinking establishments normally must provide a bond to secure the necessary license and permit required to operate. In addition, if the business is obligated by contract to supply food and/or drinks to a government entity, it will be required to supply a contract-performance of service or supply bond.

Types Of Surety Coverages:

• Contract-Performance of Service or Supply Bonds
• License and Permit Bonds

Slips and falls, along with customer illness due to being served tainted food or drink, are the primary liability exposures. The commercial general liability (CGL) is used to provide coverage for these exposures.

It is important to note that liquor liability coverage is excluded under the CGL form if a risk is in the business of serving alcoholic beverages. Many establishments in this category should therefore consider purchasing a separate liquor liability coverage form.

Types Of Liability Coverages:

• Commercial General Liability (CGL) Coverage
• Employee Benefits Liability Coverage
• Employment-Related Practices Coverage
• Liquor Liability Coverage
• Owners and Contractors Protective (OCP) Liability Coverage
• Railroad Protective Liability Coverage
• Special Events Liability Coverage

Eating and drinking establishments normally do not have a commercial fleet exposure unless they deliver or they cater off-site events. The insured may need garagekeepers coverage if valet parking operations are performed on the premises that could result in damage to patrons' vehicles.

Types Of Business Auto Coverages:

• Auto Medical Payments
• Business Auto Coverage
• Collision Coverage
• Comprehensive Coverage
• Garagekeepers Coverage
• Hired & Non-owned Auto Coverage (HNOA)
• Uninsured/Underinsured Motorists Coverage

Most employers are required by state statute to provide coverage for on-the-job injuries sustained by their employees through a workers compensation policy. This coverage is particularly important to most eating and drinking establishments because of the frequency of burns, cuts, and slip and falls.

If the establishment is located on a wharf, pier or watercraft, the Longshore and Harbor Workers' Compensation Act endorsement should be added to the policy.

Types Of Workers Comp Coverages:

• Longshore and Harbor Workers' Compensation Act Coverage
• Stop-Gap or Employers Liability Coverage
• Workers Compensation and Employers Liability Coverage

Whenever and wherever a crowd exposure is found, the potential for a catastrophic loss exists. Because of this, an excess or umbrella liability policy should be considered by most eating and drinking places. Higher limits should be considered by any establishment serving alcoholic beverages.

Types Of Excess Liability Coverages:

• Excess Liability Coverage
• Retroactive Excess Liability Coverage
• Umbrella Coverage

Eating and drinking places may have exposures they have never considered or even thought about. This list is a sample of coverages that some clients should consider when a coverage inventory reveals an exposure.

Types Of Specialty Coverages:

• Business Legal Expense Coverage
• Cyber Liability Coverage
• Directors and Officers Liability Coverage
• Environmental Impairment Liability Coverage
• Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
• Identity Theft Insurance Coverage
• Risk Retention Group Liability Coverage
• Tax Liability Coverage
• Weather Coverage