You’ve worked hard perfecting your recipes, hiring the right people, finding the perfect location, and creating a successful business.
So why wouldn’t you do everything you can to protect all that sweat equity, including getting the proper insurance for your restaurant, bar, or nightclub?
Perhaps it’s because while most restaurant owners know they need insurance to protect their business, it’s easy to make bad decisions based on a lack of information, thereby exposing your restaurant and your personal assets to risk.
Here are 4 common misconceptions about restaurant insurance:
Misconception #1. You Can’t Get Blood From a Stone
You may think that if you don’t have a lot of money that you simply cannot get sued. The truth is that no matter how big or small your business is or how much money you have, if a settlement against you is awarded, the courts will do everything they can to collect that money. They may seize your equipment, your bank account, and sometimes your personal assets.
“While formal business structures like an LLC are an important first step toward safeguarding your personal assets, there’s a common misconception that incorporating will automatically protect you from all personal liability,” according to Huffington Post. “However, there are still several situations where you can be personally liable.”
One example the Huffington Post offers is, “If your actions injure someone, you can still be personally liable. This is because an LLC or corporation can protect you from personal liability for contractual lawsuits, but not against tort lawsuits. This is the reason that most professionals such as doctors take out a good professional liability insurance policy.”
Misconception #2. Nobody WIll Sue Me
We live in a very litigious society. No matter how careful you are, there is always a chance of being sued. Even if it’s a bogus claim that is dismissed, legal fees may be more than your business can afford. According to Rocket Lawyer, “The threat of a lawsuit is very real: over 100 million cases are filed in US state courts every year.”
Misconception #3. Insurance is Just Too Expensive
Do you have enough in savings to cover your restaurant if a customer or employee sues you? Probably not! A lawsuit can be costly. “Hiscox claims data for small and mid-sized businesses (under 500 employees) indicate that one in five will face employment charges with an average cost to defend of $125,000, which includes expenses such as attorney’s fees and settlement costs,” according to the Insurance Journal. “For those that did have insurance coverage, the average deductible cost was only $35,000, compared to the $90,000 balance paid out by their insurance company.”
Ask any restaurant owner who has been sued and did not have the right insurance, and they’ll tell you that the cost of insurance is worth the protection. Ask any restaurant owner who has been sued and had the right insurance, and they’ll tell you that the cost of insurance is worth the peace of mind.
Misconception #4. I Only Hire a Few Employees, so I don’t need Workers’ Compensation Insurance
Each state has its own laws about which employers are required to provide Workers’ Compensation insurance to their employees. According to the Pennsylvania Department of Labor & Industry, “Workers' compensation coverage is mandatory for most employers under Pennsylvania law. Employers who do not have workers' compensation coverage may be subject to lawsuits by employees and to criminal prosecution by the Commonwealth.”
Protect Your Future with Affordable PA Restaurant Insurance
Don’t put your restaurant at risk. Trust the experienced Independent Insurance Agents at American Insuring Group to separate fact from fiction. You'll be confident knowing your restaurant is protected with affordable, high quality restaurant insurance.
Get started by calling us at (800) 947-1270 or (610) 775-3848, or contact us online.
