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Restaurant Liability Insurance to Protect Your Investment

Posted by David Ross on Tue, Aug 06, 2019

Restaurant-Liability-InsuranceThere is no denying that we live in a litigious society, and restaurants are not immune to lawsuits. In fact, the very nature of the business often makes them more vulnerable to lawsuits. Don’t believe us?

The 1993 case of a woman suing McDonald’s (and winning $2.86 million) after spilling hot coffee on herself is still fresh in many business owners’ minds. But it doesn’t end there. Check out Eater’s article “The Five Pettiest Lawsuits Against Fast-Food Chains” where you’ll read about Starbucks getting sued for putting ice in iced drinks and Subway being sued for 11-inch sandwiches.

That’s not to say there aren’t genuinely legitimate lawsuits. Someone slips and falls on a spill that wasn’t cleaned up, or someone gets food poisoning from food that was improperly prepared at a restaurant.

The bottom line is that every restaurant is at risk of being sued. Which is why restaurant owners must take steps to 1) prevent those lawsuits and 2) protect themselves with the right Restaurant Liability Insurance in the event of a lawsuit.

How to Prevent Lawsuits

You may not be able to prevent every lawsuit – freak accidents do happen – but there is a lot you can do to prevent most of them. Here are six tips:

  1. Train your employees well including safety and customer service
  2. Create a culture of safety
  3. Maintain consistent processes and quality in your food prep
  4. Treat all employees with respect
  5. Hire a good attorney
  6. Insure your business properly

Liability Insurance to Protect Your Restaurant

General Liability Insurance

This type of insurance, required by most landlords and lenders, covers you when a customer is injured at your restaurant, when there is damage to a customer’s property, or if there are advertising issues such as slander, libel, and copyright infringement.

When a customer is injured – such as slipping, falling, and breaking a leg on your property - general liability insurance covers legal fees, medical expenses, and any judgments imposed against your restaurant. It does not protect your employees; that’s where Workers’ Comp Insurance comes in (see below).

When a customer’s property is damaged – such as a server spilling coffee on a customer’s laptop – general liability helps pay for legal fees, replacement costs, and out-of-court settlements.

When you cause an advertising injury, general liability insurance covers copyright infringement and defamation - both libel(written) and slander(spoken).

Liquor Liability

Serving alcohol increases a restaurants liability issues, and most General Liability Insurance Policies do not cover it, so if you sell alcohol at your establishment, you need to have Liquor Liability Insurance. Pennsylvania is one of 43 states with some type of dram shop law.

According to the Pennsylvania Liquor Control Board, “Generally, dram shop laws establish the liability of establishments arising out of the sale of alcohol to visibly intoxicated persons or minors who subsequently cause death or injury to third parties (those not having a relationship to the bar) as a result of alcohol-related car crashes and other accidents.”

In other words, if you serve alcohol to someone who then injures someone else or damages someone’s property, you could be held liable. Liquor Liability Insurance helps protect your restaurant from this type of liability.

Product Liability Insurance

Food poisoning is every restaurant owner’s worse nightmare. The fact is that you can train your staff how to handle food safely and have proper processes in place to avoid food contamination, but you can’t control how the food is handled before it arrives at your restaurant. Therefore, food poisoning can still occur, and customers can still sue you for it. Product Liability Insurance helps protect your restaurant from those lawsuits.

Workers’ Compensation Insurance

Workers’ Comp is required for most businesses in Pennsylvania that have employees. It covers medical expenses, lost wages, and disability or death benefits for an employee who is injured on the job. But did you know that WC also covers legal costs if the injured employee sues you over the injury?

When reviewing your insurance needs, make sure your restaurant is protected from all potential risk – including liability.

How to Get the Best Price on Restaurant Liability Insurance

The independent agents at American Insuring Group understand the specific needs of restaurants. We will compare the cost of your coverage with several competing companies to ensure that you get the best price for that coverage. Give us a call at (800) 947-1270 or (610) 775-3848 or connect with us online.

Tags: Restaurant Insurance, Liquor Liability Insurance, Commercial Insurance, Restaurant Liability Insurance

Filling Restaurant Insurance Gaps

Posted by David Ross on Sun, Jul 07, 2019

fill-restaurant-insurance-gaps-300Restaurant Insurance is available to protect your property, your employees, and your business. Some types of insurance are pretty standard and may even be required by law or by other entities such as lenders and landlords.

The following are standard types of insurance that most restaurant owners carry:

  • Property Insurance
covers your building and its contents if it is damaged by fire, storms, theft, etc. and is usually required by lenders.
  • Commercial general liability insurance
covers legal costs and any judgments you may be required to pay a plaintiff if you are found liable for bodily injury or damage to someone else’s property.
  • Workers’ compensation insurance
covers injury to employees and is required by law for most businesses with employees.

These insurances are great for protecting many of your assets; however, you may find that there are gaps in your coverage.  Fortunately, there are other types of insurance or additional coverages available that can help fill those gaps.

You may not need any of these additional coverages, but knowledge is power. If you want to avoid unpleasant surprises down the road, it is critical that you consider potential risks, determine if they are covered under your existing policies, and decide how (or if) you need additional coverage.  

An experienced agent who specializes in restaurant insurance – like those at American Insuring Group - can help you determine the best coverage for your specific needs.

Here are Additional Coverages You May Want to Consider for Your Restaurant

Liquor Liability

If you have a liquor license, you should have liquor liability insurance to protect your restaurant if a customer becomes intoxicated and causes injury or damage.

Commercial Automobile Insurance

If you use a vehicle to transport food or people, you will need commercial automobile insurance.

Employment Practices Liability

If an employee sues your restaurant for discrimination or harassment, it may not be covered by general liability insurance.

Life Insurance

If your death (and loss of income) would cause a financial hardship for your family, you should consider either term or permanent life insurance.

Commercial Umbrella Insurance

Umbrella Insurance provides coverage above the limits of your general liability, commercial auto, or employer’s liability on a WC policy.

Sewer Backup

Sometimes a sewer backup isn’t just a stinky nuisance; it can cause real damage to your restaurant and is typically not covered under property insurance.

Utility Interruption Coverage

The loss of utilities such as electric, gas, water, etc. could shut down your restaurant or even cause damage to your restaurant.

Equipment Breakdown

Restaurants rely on their equipment – ovens, freezers, food warmers, etc. - and equipment does break down and can cause damage.

Spoilage or Food Contamination Insurance

An interruption in utilities or an equipment breakdown could result in costly food spoilage.

Extra Expense

If your property is damaged, and you want to continue operating at another location while repairs are being made, you’re going to incur expenses such as equipment or property rentals. If you want those expenses covered, you’ll probably need to purchase extra expense coverage.

Fine Arts

If you have expensive paintings or other artwork in your restaurant, you may need to protect your investment from damage or theft with fine arts coverage.

Employee Theft

A typical property insurance policy does not cover theft by employees.

Peak Season

If your restaurant sees a high level of business during certain times of the year, you may want a higher limit for personal property insurance coverage during that time.

Specific Peril Insurance

If your liability policy doesn’t cover damage from natural disasters (some do, and some don’t), you may need specific peril insurance.

Business Interruption Insurance

If your restaurant sustains damage and you need to close for an extended period, business interruption insurance can cover your loss of income while repairs are made.

You don’t want to pay more for insurance than is necessary, but at the same time, you do want to make sure that your business assets are adequately covered. This is where an independent agent who specializes in restaurant insurance can help.

Need Help Ensuring That Your Restaurant’s Assets are Properly Covered?

The independent agents at American Insuring Group can help you determine the best coverage for your restaurant. They check and compare coverage from multiple insurance companies to make sure you’re getting the best price on quality coverage. Give us a call at (800) 947-1270 or (610) 775-3848 or find us online.

Tags: Restaurant Insurance, workers comp insurance, Commercial Insurance, Restaurant Liability Insurance, Commercial General Liability Insurance

Food Allergies and Restaurant Liability Insurance

Posted by David Ross on Sun, Jun 09, 2019

Food allergies can affect restaurant insurance costs.Are food allergies affecting the cost of your restaurant liability insurance? Maybe. 

If it seems as if more people suffer from food allergies, it’s because they are. According to Food Allergy Research & Education (FARE), food allergies in children increased by 50 percent between 1997 and 2011, and the number of children hospitalized due to food allergies tripled between the late 1990s and the mid-2000s. 

In the U.S., about 15 million people have food allergies, and food allergic reactions are responsible for approximately 30,000 emergency room visits and 150-200 deaths every year, according to the Environmental Health Specialists Network (EHS-Net). Over a thirteen-year period, nearly half of all fatal food allergy reactions were caused by food from restaurants or other food establishments. 

What if one of those reactions was a result of something that person ate at your restaurant? Are you liable? Again, maybe! 

So far, five states have enacted laws to make it safer for individuals with food allergies to eat at restaurants. While Pennsylvania is not one of those states, that doesn’t mean that you couldn’t find yourself on the wrong end of a lawsuit, which could affect not only your restaurant's liability insurance rates but also your restaurant’s reputation. 

What is a Food Allergy?

The Mayo Clinic defines a food allergy as “an immune system reaction that occurs soon after eating a certain food. Even a tiny amount of the allergy-causing food can trigger signs and symptoms such as digestive problems, hives, or swollen airways. In some people, a food allergy can cause severe symptoms or even a life-threatening reaction known as anaphylaxis.”

Symptoms can begin within a few minutes or up to two hours and can include one or more of the following:

  • Hives
  • Flushed skin or rash
  • Tingling or itchy sensation in the mouth
  • Face, tongue, or lip swelling
  • Vomiting and/or diarrhea
  • Abdominal cramps
  • Coughing or wheezing
  • Dizziness and/or lightheadedness
  • Swelling of the throat and vocal cords
  • Difficulty breathing
  • Loss of consciousness

According to the Food and Drug Administration (FDA), there are more than 160 foods that can cause an allergic reaction, but eight foods account for 90 percent of all food allergy reactions. Those eight major food allergens include the following:

  1. Milk
  2. Eggs
  3. Fish (e.g., bass, flounder, cod)
  4. Crustacean shellfish (e.g., crab, lobster, shrimp)
  5. Tree nuts (e.g., almonds, walnuts, pecans)
  6. Peanuts
  7. Wheat
  8. Soybeans

What do Restaurant Employees Know About Food Allergies?

A study conducted by the EHS-Net discovered that while most restaurant managers, workers, and servers were familiar with food allergies, there were significant gaps in that knowledge. This isn’t surprising since less than fifty percent of those interviewed had received food allergy training.

For the most part, restaurant employees could recognize the symptoms of an allergic reaction and knew to call 911 if a reaction occurred. 

However, one in ten were under the false assumption that someone with a food allergy could eat a small amount of an allergen without experiencing any adverse effects. The study also concluded that while most restaurants make ingredient lists available, many of them did not take other steps – such as avoiding cross food contamination – to reduce the risk of allergic reactions. 

What Your Restaurant Can Do to Ensure the Safety of Customers With Food Allergies

The EHS-Net recommends that restaurants do the following:

  • Train staff on food allergies including identifying major food allergens, how to prevent cross-contamination of allergens, and what to do if a customer has an allergic reaction
  • Have a designated person on duty at all times to handle food allergy questions and requests
  • Keep ingredient lists or recipes for menu items available for customers
  • Use dedicated areas and equipment to prep and cook meals for customers with food allergies
  • If this isn’t possible, clean prep areas and equipment before preparing meals for customers with food allergies 

If taking a few steps can help ensure the safety of your customers and help minimize the possibility of a lawsuit and the adverse effects that go with it, isn’t it worth the effort? Lowering your restaurant liability insurance is just icing on the cake.

We Specialize in Restaurant Insurance

If you want to save even more on your restaurant insurance, give one of the agents at American Insuring Group who specialize in restaurant insurance a call at (800) 947-1270 or (610) 775-3848 or connect with us online.

Tags: Restaurant Insurance, Commercial Insurance, Restaurant Liability Insurance, Restaurant Insurance Costs

Do You Need Restaurant Liability Insurance Coverage?

Posted by David Ross on Thu, Dec 29, 2016

Things to consider when purchasing Restaurant Liability Insurance in Philadelphia, Reading, Lancaster, Harrisburg, York, Allentown, Erie, Pittsburgh, PA and beyond.Imagine… One of your servers loses his grip on a hot cup of coffee and it lands on a patron’s lap. Or a woman slips on a wet spot in your restroom and breaks her ankle in two places.

As a restaurant owner, you’re probably already aware how quickly an accident can happen in your establishment. So it’s incumbent upon you to be prepared for the lawsuits and expenses that often accompany these type of mishaps. Without adequate restaurant insurance protection, your business assets could be seized to pay any claims for which you’re found liable. 

Even when the court does not rule in the patron’s favor, your restaurant will still be responsible for court costs and your attorney's fees to defend the case.

 

Getting the right insurance protection

Without the proper insurance coverage, incidents like these could bankrupt, or at least derail, your small business. Liability insurance safeguards your business from claims from others, including lawsuits. This insurance starts with a General Liability (GL) policy, but there are also plans to meet a restaurant’s specific needs. These include:

  • Liquor Liability if your business serves alcohol
  • Excess Liability to increase the liability limits on your policy
  • Assault and Battery Liability if a fight breaks out and there are injuries
  • Cyber Liability to address data breaches

Who needs this insurance?

Restaurant liability insurance is appropriate for a variety of hospitality businesses including:

  • Full-service restaurants
  • Fast-food restaurants
  • Bars and taverns
  • Sports bars
  • Night clubs
  • Delis
  • Pizzerias
  • Food trucks
  • Caterers

This list is not comprehensive, but it gives you an idea of the types of establishments that incur the risks associated with serving food and drinks to customers and clients.

What does general liability insurance cover?

Liability policies will usually include the following:

  • Financial awards to the plaintiff if you lose your case
  • Attorney’s fees for defending your business in court
  • Future medical payments for an injured party
  • Settlement costs if it makes sense to settle out of court

If a patron’s injury or illness results in death, your GL policy will cover the medical expenses, funeral expenses, and any court-awarded compensation. Just remember, when your employees are injured or become sick while working for you, they are not covered under your GL but by your Worker’s Compensation insurance.

Property damage claims coverage may be included

Keep in mind that your policy may also protect your food service business from liability due to injuries or property damages that happen at other locations. Think about a business that caters an event at which a food warmer malfunctions and the resulting fire causes property damage at the venue. Your policy would handle the costs and any lawsuits.

And don’t forget personal and advertising injury claims

When your restaurant uses advertising or any promotional literature, you need to take into consideration that you may be infringing on another restaurant’s brands or copyrights. A general liability policy that covers you if you copy the promotional literature of another business would make sense. It protects you from accusations that your advertising slandered or libeled another company or person and caused non-physical damage.

 

Be Prepared - Contact Us for All Your Restaurant Insurance Needs

Contact us for Restaurant Liability InsuranceNo matter how well prepared you think you are, your food service business is not immune to accidents. A Restaurant General Liability policy is a must to protect you against the unpredictability of mishaps, oversights, and lawsuits.

When shopping for coverage, contact American Insuring Group online or call us at (800) 947-1270 or (610) 775-3848 for help in finding the right policy to fit your restaurant business needs.

Tags: Restaurant Insurance, Restaurant Insurance Philadelphia PA, Restaurant Insurance Allentown PA, Restuarant Insurance Harrisburg PA, Restaurant Insurance Lancaster PA, Restaurant Insurance Reading PA, Restaurant Liability Insurance