7 Ways a Business Owners Policy is Different for Restaurants
Every restaurant should have a property and liability insurance policy—what’s often referred to as a business owners policy or BOP. This type of policy can provide coverage for incidents like damage to the building that a restaurant owns or leases and the contents of that building, customer injuries such as slip-and-fall accidents, and even business income and expenses for restarting operations if there is a business disruption related to a covered event.
“Most restaurant owners are familiar with this type of insurance,” says Blake Fuchtman, Product Manager at biBERK (part of Warren Buffett’s Berkshire Hathaway Insurance Group). “They understand that it covers incidents that are common in the restaurant industry like fire, burglary, food poisoning incidents, and more. What some don’t know, however, is that there are multiple ‘add-ons’ that can and should be added to a business owners policy to provide protection for other critical risks that restaurants face.”
An add-on to a base insurance policy changes the terms of that policy. It may also be called an “endorsement” or a “rider.” Restaurants that don’t have the necessary BOP add-ons leave themselves open to serious financial ramifications from loss and legal liability. On the other hand, a restaurant owner who has worked with its insurer to select the add-ons needed for comprehensive coverage can operate their business with confidence that they won’t be hit with a devastating financial burden from an unexpected incident.
BOP Add-Ons You Should Consider
If you have a business owners policy for your restaurant, you should consider adding these seven add-ons if they aren’t on the policy already:
- Liquor liability. We live in a litigious society and some of the costliest insurance claims for restaurants involve liability. If you serve alcohol, there are a variety of related risks you face including lawsuits over serving inebriated customers or minors. A liquor liability add-on helps protect you from those kinds of risks.
- Non-owned auto liability. If your employees use their own vehicles to make deliveries to customers, their personal auto insurance may not cover liability associated with on-the-job accidents, and your business could be brought into lawsuits. A non-owned auto liability add-on can provide coverage for this type of incident.
- Employment-related practices liability. This add-on protects your business in the event that an employee sues you over inappropriate workplace behavior like wrongful termination, harassment, or discrimination.
- Equipment breakdown. A power surge damages your refrigerator, rendering it inoperable. In this kind of scenario, an equipment breakdown add-on can help pay for equipment repair or replacement, lost income while equipment is out of commission, and costs related to the time and labor required to make repairs.
- Food spoilage. An equipment breakdown, power outage, or other incident that affects your refrigerator or freezer can result in the loss of food stored there. A food spoilage add-on can provide compensation for those items.
- Cyber liability. As a business that handles sensitive information about employees and customers, you’re required to protect that data. A cyber liability add-on to your BOP helps protect your business in the event of fraud from a data breach. It can help pay for informational materials and services provided to affected individuals after a breach, such as notification, IT and legal reviews of the incident, a help line, credit report monitoring, and identity restoration case management.
- Custom building improvements. This add-on can help cover the cost if enhancements you’ve made to your building are damaged by a covered incident. For example, if you install an expensive bar, the cost to repair or replace it may be covered. These kinds of enhancements are sometimes called “tenant improvements and betterments.” If you lease your space, they may be covered by the building owner’s insurance, but you shouldn’t assume that. Instead, you should talk with the owner and your insurance company to get clarity on the coverage you need.
Complete Coverage and Powerful Peace of Mind
“There’s no end to the list of operational issues that demand a restaurant owner’s attention. So, it’s no surprise that they don’t often stop to consider their insurance needs and whether they are being fully met,” adds Fuchtman. “At biBERK, we understand how valuable an owner’s time is. That’s why we strive to ask fewer but more insightful questions than many insurance providers so that we can quickly and efficiently determine the risks a restaurant is exposed to. Then we provide coverage tailored to their needs in a matter of minutes through a streamlined application process and at savings of up to 20% over other companies.”
When a crisis strikes and you don’t have insurance, it’s too late to get coverage. Unfortunately, in that scenario, your business must cover the cost of recovering from the incident. And the reality is that the financial hit from a loss or legal liability from one incident can be more than some restaurants can bear. Taking the time to consider the add-ons you need on your business owners policy before an event occurs is not only an investment in protecting your restaurant, it delivers powerful peace of mind as well.