All You Need To Know About Restaurant Insurance

All You Need To Know About Restaurant Insurance

Hello! Thank you for taking the time to learn more about Restaurant Insurance. My name is John M. Brown, and I am the owner of FarmerBrown.Com We are one of the largest and oldest independent insurance brokers online, specializing in helping restaurateurs with all their insurance needs.

Along with the author of this eBook, Thomas M. Hester, we have over 50 years of combined experience in helping restaurants succeed and grow their businesses. If you read the following material, you will find many keys to success that successful restaurateurs follow. The material is easy to read and contains real-world, useful advice from industry experts with years of experience. It will give you the knowledge to avoid pitfalls that many restaurateurs make.

Restaurant insurance is a complex topic, but we will try to break it down into easily digestible points that you can understand. With an understanding of this complex subject, you will be able to make informed decisions that will allow your business to flourish.

After reading this eBook, you will have the proper tools to ensure that you are making the right decisions concerning your insurance needs. As a general rule, insurance is the largest insurance expenditure that a restaurant will have. Therefore, it is in your best interest to educate yourself on the subject. The information contained in the following pages may save your business thousands of dollars. Even the best insurance agent will not know your business as well as you do. That is why educated input, provided to a knowledgeable agent, will get you the best insurance solutions.

Thank you for your time and consideration. I guarantee that you will find this information useful. I look forward to assisting you with any restaurant insurance needs you may have.

Owner, FarmerBrown.com

Table of contents

1. Do You Need Commercial Auto Insurance?
2. What Vehicles Are Covered By Restaurant Commercial Auto Insurance?
3. What Does Commercial Auto Insurance Cover?
4. How Much Does Commercial Auto Insurance Cost?
5. How Do Commercial Car Insurance Deductibles Work?
6. What is Hired and Non-Owned Auto Coverage?
7. Is Commercial Auto Insurance Expensive?
8. How Much Liability Coverage Do You Need?
9. Who Needs Commercial Auto Insurance?
10. Affordable Commercial Auto Insurance For Business
11. Things to Know Before Purchasing Your Commercial Auto Insurance.
12. What to Ask Your Insurer Before Getting Your Commercial Auto Insurance
13. How Can I Lower My Commercial Auto Premium?
14. Restaurant Valet Insurance
15. You outsource the valet parking to a valet company
16. How does valet insurance cover common risks

Restaurant Liquor Liability Insurance

1. What Is Restaurant Liquor Liability Coverage?
2. Liquor liability insurance can help cover claims of
3. How Much Does Liquor Liability Insurance Cost?
4. Ways To Save Money on Liquor Liability Insurance
5. Do I Need Liquor Liability Insurance?
6. What Is the Difference Between Host Liquor Liability Coverage and Liquor Liability Coverage?
7. Does My General Liability Insurance Cover Liquor Liability?
8. What Is Liquor Liability Insurance Called?

Business Owners Policy (BOP)

Restaurant Commercial Umbrella Insurance

1. Commercial umbrella insurance cost
2. What does commercial umbrella insurance cover?

Final Thoughts on Restaurant Insurance

Introduction:

If you own a restaurant, bar, tavern, or food truck, you are well aware of the extremely challenging circumstances you face. The post-COVID hospitality industry looks nothing like it did in 2019. From out-of-control inflation affecting food prices to the almost impossible task of hiring workers, the dilemmas of restaurateurs are unprecedented. Currently, most restaurants are barely hanging on, and many owners are closing up as the stress and complications have taken the enjoyment out of the work they were once so passionate about. Cutting costs is imperative in your restaurant just to keep the doors open. One way to cut costs is by making informed decisions about affordable restaurant insurance. If you spend a few minutes reading the following information, there is a good chance you will be able to save a few thousand dollars. In any case, you will at least gain the knowledge that your restaurant has the proper insurance it needs. So let us sit down and dig into the information that follows.

Restaurant Insurance Made Easy:

Insurance is a field rife with specific language and sometimes complicated structures. Just like preparing a recipe for the first time, it can be a nerve-racking experience. However, it is a necessity that many restaurant owners may have a hard time fully understanding without more in-depth knowledge of the field. As a result, these restaurant owners tend to go in blind and simply search for the lowest price. There are times when this may make sense. However, if you do not know what is not covered in the event of a claim, it can become a much more disastrous situation than necessary. This is true for all lines of insurance, with General Liability insurance being both the area of insurance most necessary and with the most gaps in coverage. This eBook is meant to introduce the basics of how Restaurant Insurance works, how to find the most complete policy for your needs, and how to make sure you’re spending the right amount of money in the right areas to receive the best deal.

I hope you find the following information rewarding and helpful in finding value in your insurance by making you a more sophisticated buyer. I believe that by putting some focus every few years into purchasing insurance, you will save money and many headaches. As a Restaurant operator, you must have insurance to protect your business property, take care of the people that help you run the business, and also provide coverage for your daily operations.

The topics covered in this book are:

1. General Liability Insurance
2. Workers Compensation
3. Property Coverage
4. Commercial Auto
5. Liquor Liability
6. Business Owner’s Policy for Restaurants
7. Commercial Umbrella

What coverage can general liability provide for food and beverage businesses?

Customer injuries: No matter how careful you are, accidents will happen at any restaurant. When a customer gets hurt on your property, general liability insurance will pay for everything from an ambulance ride to the cost of a lawsuit if your business is sued, and it is a covered claim. General liability insurance covers:

• Legal defense costs, including attorney fees
• Medical expenses incurred by the injured party
• Court judgments or settlements
• Funeral costs in fatal incidents

On a side note, it is important to remember that a restaurant general liability insurance policy does not cover your employees. For that, you will need workers’ compensation insurance. Keep reading to find out more about workers’ compensation.

Customer property damage:

General liability insurance also protects you when customer property is damaged. If a server spills a drink on a customer’s fur coat, your general liability policy could help pay for:

• Legal fees if you are sued
• The cost of replacing the fur coat
• An out-of-court settlement

General liability insurance can also protect your food service business from off-site incidents. For example, if your business caters a private function and your food-warming equipment starts a fire, you would have coverage from any resulting lawsuits alleging property damage. You need to check with your agent if you offer these types of services. You may need to add an endorsement to ensure you are properly covered.

Host liquor liability:

While this will not cover a restaurant that regularly serves alcohol, general liability insurance includes host liquor liability insurance. This insurance covers bodily injury and property damage resulting from alcohol served at a social function. You will have coverage at a company party where you provide alcohol or other events as long as there is no profit motivation.

Advertising injuries:

It is always possible to inadvertently copy a competitor’s catchphrase or logo. Advertising injuries are covered by general liability insurance. This includes:

• Copyright infringement
• Defamation, both libel and slander

If you use advertising or promotional materials to attract customers to your restaurant, you will want to make sure your restaurant general liability insurance policy includes this protection.

Cost of Restaurant General Liability Insurance:

The average general liability insurance costs around $1,000 per year or around $90 per month, depending on the size, amount of sales, and locations. Most policies are between $800 and $3,000 annually. At FarmerBrown.com, we can get you an exact quote the same day if you are able to provide some basic information either online or over the phone.

Workers Compensation:

What Does Workers’ Compensation Insurance Cover?

Workers’ Compensation Insurance provides benefits to employees injured while performing duties required by their job. These benefits are provided no matter if the employee or employer was at fault in causing the injury. Workers’ Compensation Insurance coverage means that injured workers need not sue their employer to obtain compensation. Workers are generally eligible for benefits even if their own carelessness contributed to their injury. For example, a kitchen worker could collect benefits for an injury they sustained falling off a ladder, even though the injury occurred because they failed to use the proper safety measures before climbing the ladder.

State law determines how and what benefits are available to an injured worker. Most State Workers’ Compensation laws typically provide the following types of benefits:

• Medical Coverage: Includes doctor visits, hospital care, prescription medications, physical therapy, and any other medical treatments deemed necessary.

• Disability Income: Provides a replacement of income lost when workers are unable to work due to an on-the-job injury. The amount and duration of benefits depend on whether the disability is temporary or permanent, and partial or total. This is usually a percentage of wages and is generally around 2/3 of the injured workers’ weekly wages in most States.
• Job Rehabilitation or Retraining: This provides support and training for workers who cannot return to their prior occupation to learn a new skill based on their current capabilities.
• Death Benefits: If a worker is killed on the job, their spouse and minor children are entitled to payment of a death benefit.

To put it all in a nutshell, all States give injured workers similar types of benefits, but the amounts they pay vary greatly from State to State.

What Injuries Are and Are Not Covered by Workers’ Compensation Insurance?

Workers’ Compensation Insurance covers injuries that result from an accident at work. There are certain situations where Workers’ Comp Insurance will not provide coverage. The biggest exception to coverage is injuries that happen because an employee is intoxicated or using illegal drugs. Coverage may also be denied in situations involving:

Self-Inflicted Injuries: If an employee intentionally injures themselves at work, an employer is generally not liable for the injuries. By intentional, it means that the injury was inflicted by the employee who had the mindset of causing injury to themselves. An example is an employee cannot intentionally slip and fall or injure themselves and claim benefits.

• Injuries suffered while a worker was committing a serious crime
• Injuries suffered while an employee was not on the job when the injury occurred
• Injuries suffered when an employee’s conduct violated company policy

How Workers’ Compensation Insurance Claims Work:

If an employee suffers a work-related injury or illness, they should report it to their employer at once. All States have a time cutoff for filing a claim. Each State’s reporting requirements are different, so it is imperative that the claim be filed as soon as possible so that coverage can be obtained.

After an injury or illness is reported, there are a number of steps that need to be followed:

Healthcare Professional Visit:

The injured employee should be seen by an approved healthcare professional. The injured employee should get medical attention immediately. Delaying treatment may cause claims for benefits to be denied. Make sure the healthcare professional knows that the injury is work-related so that the records can be properly notated.

Start The Claim Process:

It is an employer’s responsibility to provide the appropriate forms and information about the claims process to the injured employee. This includes providing the contact details for the business’s Workers’ Compensation Insurance company.

File The Claim:

The employee should get in contact with the employer’s insurance and notify them of the claim. They should provide the insurance company with any State-required paperwork and medical reports. As stated earlier, time is of the essence in these matters, as there are strict reporting deadlines.

Getting Benefits:

If the claim is approved, the employee will start to receive Workers’ Compensation Insurance benefits. These include medical bills, rehab costs, and a percentage of their wages if their injury prevents them from working.

Getting Back To Work:

The injured employee’s doctor will determine when the employee can return to work. These recommendations might include a reduced workload for a period of time. During this time, employers should alter the work schedule of the injured employee if necessary to allow the employee to return to work.

Safety Training:

Finally, safety training should be provided to ensure that the same type of accident does not happen again.

Workers’ Compensation Class Codes (NCCI Codes)

What Are Workers’ Compensation Class Codes?

Workers’ compensation class codes are numeric codes (usually three to four digits in length) that help identify the type of work that you are involved in. Insurance companies utilize these classification codes to estimate your exposure to risk while determining workers’ compensation insurance. Each profession has its own code.

Developed by the NCCI (National Council on Compensation Insurance), these classification codes include information on the losses that specific work is prone to. Insurance agents and underwriters can refer to the NCCI Scopes Manual to analyze the risks and evaluate workers’ comp insurance costs.

What Is the National Council on Compensation Insurance?

The National Council on Compensation Insurance (NCCI) is an organization that collects workers’ compensation data and figures, such as exposure units, premiums, and loss stats to:

• Formulate advisory workers comp ratings
• Develop workers comp policy forms
• File workers comp information with regulatory bodies

The NCCI formulates advisory workers comp ratings, develops workers comp policy forms, and files workers comp information with regulatory bodies.

Insurance companies rely on the NCCI to identify the risk level for various professions. The NCCI is a non-profit organization that provides services to insurance agents, insurers, regulatory authorities, legislators, state governments, and other related parties.

What Are NCCI Class Codes Used For?

The National Council on Compensation Insurance maintains over 700 classification codes. These NCCI codes are used primarily to determine and allocate the cost of Workers’ compensation insurance, considering the risk levels of a particular trade among employers. Insurance underwriters consider a number of factors while determining customers’ premiums, and classification codes are one of the most important factors in determining a rate.

NCCI Codes Determine the cost of Workers’ Compensation insurance by assessing the risk level of the job. By using NCCI codes, companies that fall under high-risk service areas pay more for insurance coverage compared to low-risk industries.

Many businesses operate under different workers comp classification codes based on the fact that they employ workers for many different jobs. For example, a large roofing company may have a number of people on the payroll. The receptionist job is not as dangerous as the employees who are actually doing the roofing. It is imperative that you make sure your employees are classified correctly. In most States, Workers’ Compensation premiums for restaurants are generally around $0.80 to $2.50 per $100 of payroll.

While a majority of states follow the NCCI class code system, others choose to operate with more independent guidelines. NCCI NOC codes help the insurance companies easily evaluate the risks that a particular job may involve. It also allows consistency in worker comp classification codes across states.

Properly classifying workers is an important part of the quote process. If your employees are wrongly classified, you can end up paying too much for coverage or owing too much after an audit.

Food service operations are typically divided between those that are classified as fast food service versus those that are full-service food service. Traditional restaurants typically have servers who wait on customers and receive gratuity or tips are classified as class code 9082. Fast food restaurants use the 9083 classification unless state-specific rules require an alternate code. These types of restaurants could include standard fast food providers serving hamburgers, chicken, gyros, tacos, pizza, and sandwiches.

Restaurants that receive more than 50% of their revenue from the sale of alcoholic beverages, such as beer, wine, or liquor, typically belong to class code 9084 – Bar classification. This class is often used for bars, nightclubs, lounges, and taverns.

Different classification systems include:

• NCCI States
• Independent Bureau States
• Monopolistic States

About two-thirds of states follow NCCI codes because they subscribe to and abide by the National Council of Compensation Insurance. These states have their own Workers’ Compensation Insurance agencies but rely on the NCCI for administrative formalities. Some examples of NCCI states are Alabama, Colorado, Georgia, Kentucky, Louisiana, Mississippi, South Carolina, Texas, and Virginia.

A total of eleven states, along with the District of Columbia, are categorized as Independent States as they do not follow the NCCI rules or guidelines. These eleven states include California, Massachusetts, Pennsylvania, Delaware, Minnesota, New York, Indiana, Wisconsin, New Jersey, Michigan, and North Carolina.

The Monopolistic States are the four states that prohibit the sale of private workers’ comp insurance to employers and are known as the monolithic states. These states are Washington, North Dakota, Wyoming, and Ohio.

What Are the Benefits of Accurate NCCI Codes?

No one wants to pay more for the Workers’ comp insurance policy, and therefore, it is crucial to identify and assign accurate NCCI codes. Insurance providers are equally responsible for evaluating the accurate NCCI codes; any sort of mistake can result in paying extra premiums. On the other hand, any wrong class codes can cause cancellation or denial of claims.

Experience Modification:

One of the most important components in determining Workers’ Compensation Insurance cost is your previous loss history. This is usually called your experience modification (EM). It is a numeric representation of your business’s claims history and safety record compared to other businesses in the same class code. The average company is assigned an EM of 1; if you have poor safety and claims, your EM will be greater than 1. If you have a good safety and claims history, your EM will be less than 1. This can greatly affect the amount you pay in premium. This may sound complicated, but the examples I will show will help you understand how important this is.

Example of how EM affects the Policy price:

Let’s use an example of three similar restaurants: Safety Sally’s Bistro with an EM of .75, Average Java Joe with an EM of 1, and Risky Rita’s Restaurant with an EM of 1.25. They all have a payroll of $100,000, and the state rate for coverage is $2 per $100 of payroll.

All these policies will have the same coverage. So you can clearly see that a safety-conscious business will pay off in the end, with Risky Rita’s paying $1,000 a year more than Safety Sally. If your payroll is large, this can amount to huge differences.

How Much Does Workers’ Compensation Insurance Cost?

The main factors in determining the costs are:

• Type of Business
• Your Location
• Age of Your Business
• Safety Record or Loss History

Type of Business: The National Council on Compensation Insurance (NCCI) oversees Workers’ Compensation issues in much of the country. The NCCI has developed a system of class codes to categorize the types of work people do. Currently, there are more than 700 codes, with each class code identifying a specific type of work. The higher the risk a profession has, the more it costs to buy Workers’ Compensation for an employee in that profession. For example, it stands to reason that it would cost more to cover a roofer than someone who strictly works in the office answering phones.

Your Location: The cost for Workers’ Compensation Insurance varies greatly from state to state. As a general rule, the more liberal the state’s regulations, the more you will pay.

Age of Your Business: New companies will generally have to go into their state’s assigned risk plan, often called the Pool. The Assigned Risk Plan was formed by individual states to ensure that employers can obtain Workers Compensation Insurance. Assigned Risk Plan rates are generally higher than those for the same classification codes in the standard market. Some states administer their own programs, while NCCI, the National Council on Compensation Insurance, administers others.

Safety Record or Loss History: Workers’ Compensation Insurance cost is also determined by your previous loss history. This is usually called your experience modification (EM). It is a numeric representation of your business’s claims history and safety record compared to other businesses in the same class code. The average company is assigned an EM of 1; if you have a poor safety record and claims history, your EM will be greater than 1. If you have a good safety and claims history, your EM will be less than 1. This can greatly affect the amount you pay in premium. This may sound complicated, but the examples I will show will help you understand how important this is.

The cost of the policy is determined by a simple formula, but how those numbers are figured is anything but simple. At the most basic level, the premium you will pay is determined by the following:

Your NCCI Class code or equivalent depending on your State and even City where you work.

Amount of payroll.

Your Experience Modification – A fancy way of saying how your company’s safety/claims record compares to others in the same industry.

So to determine the premium, the formula is:

Cost of Restaurant Workers’ Compensation Insurance:

The average Workers’ Compensation insurance costs around $2,000 per year for every $100,000 in payroll you have. At FarmerBrown.com, we can provide you with an exact quote the same day if you are able to provide some basic information either online or over the phone.

Workers’ Compensation Audits:

When you get Workers’ Compensation Insurance, you will pay an estimated premium upfront based on the figures you provide your insurance agent. You can expect an audit at least every policy term for low-risk trades and up to quarterly if you are in a high-risk trade or are new in business.

As long as you are aware of this, it should be of little or no concern. This assumes you gave your agent accurate information in the beginning and followed some simple basic rules. You will have to provide the insurer with copies of your payroll records. This should be a relatively painless process, as these records are legally required to be filed by your business in most instances. The trouble comes if you grossly underestimated your payroll. It is important to remember that the original figure you provided was just an estimate of what the premium might be. The actual premium is going to be based on your actual payroll.

As a side note, when I started selling insurance, there were some contractors that thought they were wise guys. They tried gaming the system by forming new corporations with different tax ID numbers to get around what they owed. I can assure you that those days are over. They have many ways to link various companies today by using technology. So it is always best practice to take these obligations seriously.

Building coverage: This is necessary if you own the building in which your establishment is housed. It will provide coverage for damages to the structure of the building.

Contents coverage: This provides coverage for the property kept inside your restaurant even if you do not own the building. It is similar to the coverage you would have on your home. Special items or expensive items may require special endorsements to cover these items. This also covers your build-out, which in most cases is pretty expensive. It will cover you for what’s inside your Restaurant in case of a peril; in other words, you will have coverage for your tables, chairs, kitchen equipment, etc. Remember to take pictures of your items and make sure you have a clear idea of the price so you can get the appropriate coverage for it.

Equipment breakdown coverage: If you have cooler problems or kitchen equipment breaks down, you can opt for this coverage. This coverage will compensate you for repair fees as well as lost income.

Food spoilage coverage: One of the biggest problems that Restaurants deal with is food spoilage. If you have products that are worth thousands of dollars, would you be able to afford them if you lose them all in one night? Many Restaurant owners do not seem to understand the importance of this coverage until the time comes when they need it because they lost their products due to an overnight power outage or a refrigeration equipment malfunction. It only takes a couple of hours to lose your meat because of bacteria and consequently trigger a Salmonella outbreak which could destroy your reputation and later on your business. Obtaining this coverage is not expensive, and it’s smart to protect your investment, so get a good Restaurant Insurance now; we can help. An extended power outage or mechanical breakdown could cause you to throw away a lot of food. This insurance coverage will provide compensation for this sort of loss.

Lost income coverage: If your restaurant is forced to close temporarily because of a covered event, this insurance will provide continuation of income. Business interruption insurance is a type of insurance that covers the loss of income that a business suffers after a disaster. These amounts can be significantly larger than the initial claim itself. Take, for instance, a small kitchen fire that damages a small portion of your kitchen. The damage claim may only be $50,000, but your restaurant may be closed for months as a result of clean up and repairs. The income loss covered may be due to a disaster-related closing of the business facility or due to the rebuilding process after a disaster. It differs from property insurance in that a property insurance policy only covers the physical damage to the business, while the additional coverage allotted by the business interruption policy covers the profits that would have been earned. This type of coverage is not sold as a stand-alone policy, but can be added onto the business property insurance policy. The following are typically covered under a business interruption insurance policy:

• Profits: Profits that would have been earned (based on prior months’ financial statements).
• Fixed Costs: Operating expenses and other costs that are still being incurred by the property.
• Temporary Location: Some policies cover the extra expenses for moving to, and operating from, a temporary location.
• Extra Expenses: Reimbursement for reasonable expenses. This is in addition to fixed costs. It covers expenses that allow the business to continue operation while the property is being repaired.

Liquor liability insurance: It is also imperative to mention that Liquor Liability insurance is an important part of the standard business liability policy. So, if you are selling alcohol at your establishment, you will need this coverage to protect you against the actions or eventualities caused by intoxicated people on your premises. This policy will be based on your gross liquor sales and the coverage limits you need. This is a specific type of liability insurance that covers property damage or physical injuries caused by patrons who have become intoxicated at your bar.

Assault and battery liability insurance: If a fight breaks out in your establishment, you may be held liable if it can be shown that you failed to provide a safe environment for your customers. Hiring security guards and bouncers can also increase your exposure to this type of claim in instances of assault and battery claims against you by acts of overzealous bouncers or security guards.

Theft Coverage: Now, nobody likes to think about the idea of having a dishonest person working for you, but unfortunately, it happens. No one is exempt from suffering a theft, that is why we advise you to not disregard this coverage to protect your investment and in the worst-case scenario be able to recover what you lost due to a dishonest person.

If you answered yes to any of the questions above, you may need to consider commercial auto coverage.

Restaurants with food delivery drivers can get insurance to protect their business, drivers, and staff. As a business owner who runs a restaurant, you know offering food delivery services helps with sales. These increased sales also add additional risk of an accident. That is why it is so important to make sure you get the right Restaurant Commercial Auto insurance coverage.

What Vehicles Are Covered By Restaurant Commercial Auto Insurance?

Cars, box trucks, food trucks, work vans, and delivery vehicles are just a few of the many types of commercial vehicles. All of these will require cheap Commercial Auto Insurance. They include coverage for employees operating the vehicle. In many cases, the equipment inside will also be covered from loss. This coverage has been called many different names such as commercial auto insurance, commercial car insurance, truck insurance, or Commercial Vehicle Insurance. It is a common misconception to think that this type of insurance only applies to large vehicles. If you use a car, SUV, or van for income-generating purposes, you need to have commercial auto coverage. If you have one of these types of vehicles and you only have personal auto coverage, there is a good chance your claim may be denied if the accident occurs while you are using the vehicle for business purposes.

What Does Commercial Auto Insurance Cover?

Commercial Auto Insurance provides coverage for cars and any other motorized vehicles that are used for business purposes. Commercial Auto Insurance includes most of the same coverage as standard auto insurance. Commercial Auto Insurance also includes coverage specific to the needs of people who use their cars or trucks or other vehicles in the operation of their restaurant. Branded delivery vehicles and food trucks are clearly commercial vehicles, and they need Commercial Auto Insurance.

What may not be so clear is if you use your car or truck for work. The vehicle will need a commercial auto insurance policy to cover you while you are using it for business-related purposes. This coverage is also available to cover your employees. It can even cover you when they are driving their personal vehicles.

Commercial Auto Insurance is generally more expensive than personal car insurance. There are ways you can qualify for discounts just like with your regular personal policy. Commercial auto insurance includes many of the same coverage components as personal car insurance:

• Property Damage Liability Coverage – Pays for the damages due to property damage to vehicles and other property in the event of a covered claim. An often overlooked benefit is that it also covers your court and defense costs if legal action is taken against you or your business.
• Bodily Injury Liability Coverage – Covers damages that are related to the bodily injuries to others that are part of a covered claim. It also provides coverage for legal expenses.
• Personal Medical/Injury Payments – If you are in a car accident, medical payment insurance can help cover you and other passengers in the vehicle no matter who is at fault.
• Comprehensive Coverage – Pays for a covered vehicle that is damaged by non-collision incidents that you have no control over. This includes coverage if the vehicle is stolen. It also provides protection against vandalism, glass and windshield damage, fire, accidents with animals, weather, or other acts of nature.
• Collision Coverage – Collision coverage pays for the cost of repairs to your vehicle if it is hit by another vehicle. It may also help with the cost of repairs if you hit another vehicle or object. The maximum amount it will pay is the actual cash value of your vehicle.

• Underinsured/Uninsured Motorist Coverage – Uninsured coverage protects you if you are in an accident with a driver who has no auto insurance. Underinsured motorist coverage protects you if you are in an accident with a driver who does not have enough insurance to pay for the damages or injuries they caused. If you suffer a hit-and-run accident, you can file a claim against your uninsured motorist coverage.

If you only drive to and from work, you do not need commercial auto insurance. Your personal auto insurance will cover that. If you are a restaurant owner who uses their car for deliveries and getting supplies, you will need a commercial auto policy to protect you.

How Much Does Commercial Auto Insurance Cost?

There is a huge variance in the premiums of Commercial Auto Insurance policies, and several factors influence the cost. The following are the main factors:

• Number of Vehicles: The more vehicles that your policy will cover, the higher the cost due to the increased risk of loss with more vehicles on the road.
• Type of Vehicles: The bigger and heavier the vehicle, the higher the cost. There is a much greater probability of a greater loss when a large food truck is involved in an accident compared to an accident with a van.
• Number of Employees: The more employees you have driving vehicles, the higher the chances of having claims.
• Amount of Revenue: The more business you do, the higher the likelihood of claims, regardless of how careful you are.
• Location of Business: Where you are located makes a big difference. Generally, the more liberal the state, the higher the premiums. Rates for a small business in New Jersey can be 2 to 3 times what the same business would pay if they were located in Texas. Furthermore, even the specific area you operate in, like the 5 boroughs in New York, will cause your premiums to increase.
• Driving Records: You will be required to provide driver’s license numbers of all employees who will be operating vehicles. The insurance company will then check out their records with the DMV. Just like personal auto insurance, the more tickets and accidents, the higher the premium.

For a policy limit of $1 million, the cost of Commercial Auto Insurance for a standard vehicle is around $2,200 per year, Delivery/Cargo vans $3,500, and Food truck insurance $9,500 for an owner-operator.

How Do Commercial Car Insurance Deductibles Work?

The deductible on a commercial car business insurance policy works the same as it does for personal auto insurance. The deductible is the amount you will pay when there is a claim on your policy. The higher the deductible, the lower the premium.

What is Hired and Non-Owned Auto Coverage?

• Hired Auto Coverage: This coverage protects you against claims from the use of leased, rented, or borrowed vehicles by you or your employees that are used for business purposes.
• Non-Owned Auto Coverage: This covers employees or others who use their vehicles for your business, such as going to pick up supplies or going out and picking up food for the crew.

Is Commercial Auto Insurance Expensive?

When getting quotes for a Low-Cost Commercial Car Insurance policy, you will find it to be more expensive than a personal car insurance policy. There are many reasons for this: it provides different coverage, but also, the driving habits of people not driving their vehicles differ from personal driving habits, and the amount of risk an insurance company assumes when insuring a business is greater than the amount of risk involved when insuring an individual driver.

Commercial Auto Insurance for commercial vehicles is generally more expensive than personal vehicles as well. Most commercial vehicles are late-model versions that must carry full coverage insurance. With a personal auto policy, older vehicles often will have only liability coverage. Specialty vehicles also make commercial car insurance more expensive. Certain types of businesses require modifications to vehicles that can make them expensive to insure. Also, if your business requires you to transport valuable items, you need to make sure they are covered. All of these factors contribute to the higher price of Commercial Auto Insurance.

Oftentimes, business owners are required by contract to have larger limits of liability coverage. If you are doing work for certain companies, the contract may call for specified limits. In any case, a business must be very careful to protect its assets from litigation that might result from a driving mishap. While this may result in an increased cost, it also brings increased protection.

How Much Liability Coverage Do You Need?

There are no hard and fast rules around how much commercial auto coverage you need. You should have at least $100,000 commercial auto liability coverage per vehicle. We recommend a minimum of $500,000 up to a maximum of $1 million. Just ask yourself the following question: How much money would you be willing to pay for any sort of damages that exceed your coverage limits? Remember, the higher the limits on commercial auto insurance, the more likely your policy will have an opportunity to pay damages.

For example, if your current commercial auto insurance policy covers you for $500,000, and you are successfully sued for $1 million, you will have to pay the outstanding $500,000.

Who Needs Commercial Auto Insurance?

As a business owner, you need the same kinds of insurance coverage for the car you use in your business as you do with a car used for personal purposes. These include liability, collision and comprehensive, and coverage for uninsured motorists. Many small business owners use the same vehicle for both business and personal use. It is important to have affordable Commercial Auto Insurance.

Affordable Commercial Auto Insurance For Business

If you rely on vehicles used in your business to provide you with a livelihood, you need Cheap Commercial Auto Insurance. Whether you are a smaller business that just has one van used for deliveries and pleasure or a large restaurant with a fleet of vehicles, you need to have Restaurant Commercial Auto Insurance. This will give you the peace of mind that the assets you worked so hard to get are protected from loss.

Things to Know Before Purchasing Your Commercial Auto Insurance

1. How many cars and drivers will your commercial auto insurance cover?

What are the benefits of fleet insurance? Commercial auto insurance companies usually have different coverage types based on how many cars and drivers you need covered. Getting a type of insurance called fleet insurance can be less expensive than getting commercial auto insurance for each car since they each have policies.

Under a fleet insurance policy, the vehicles are insured as opposed to individual drivers. This gives you greater flexibility over who can drive which vehicles. You can just assign drivers to different vehicles as the need arises.

2. What is the definition of the policy of using your car for business?

The policy you use for personal vehicles has the exclusion for coverage for commercial uses, while commercial auto insurance will establish a definition for the commercial use of the car. That is why you need to make sure that your policy has everything covered for your business vehicles and discuss this with your insurance agent. Remember, personal use is covered for a business-owned vehicle under your commercial auto policy.

How Can I Lower My Commercial Auto Premium?

There are several ways to reduce premiums, including hiring qualified drivers with good driving records, opting for higher deductibles, and installing safety devices such as car alarms, a GPS system, and airbags. Stressing safety with all employees will also greatly reduce future insurance costs.

Restaurant Valet Insurance

Thousands of accidents occur in parking lots each year, resulting in injuries to customers, pedestrians, and property. Having a valet service can help reduce some of those accidents and attract more diners. However, it does come with more risk. If you have valet insurance coverage, it will reduce the out-of-pocket costs to your restaurant in the case of an accident.

There are two options to consider when deciding on offering valet service. These two options require different kinds of insurance.

Having your own employees to handle valet service gives you the most control but opens your restaurant to more liability.

It is imperative to hire safe drivers and provide new employees adequate training beforehand. In this situation, your restaurant will need several types of coverage, including General Liability and Garage Auto Insurance for damage that happens to your customers’ cars while they are in your possession.

You may also want to look into purchasing the following policies:

• Employee Dishonesty: This provides coverage for lost or stolen items in a customer’s vehicle. These types of losses are not covered by a general liability or garagekeepers policy.
• Workers Compensation: Since they are employees in most States, you will be required to provide Workers Compensation to cover medical coverage for employees who sustain job-related injuries.

You outsource the valet parking to a valet company

The other choice would be to hire a professional valet service. While this will not relieve you of all liability in case something goes wrong, it can significantly reduce your exposure to claims if it does. As a result, if there were any property damage claims, the valet companies’ insurance would pay, not yours.

Even if you hire a Valet Service, you still need to have insurance to protect your property. So you will need to have coverage at any location that your valet service will use to park vehicles. It is best to review your Restaurant General Liability Policy to ensure that any space used to park vehicles is properly insured.

How does valet insurance cover common risks:

• General Liability Insurance: This provides financial protection for your restaurant as a result of a customer’s car being damaged by your hired valet. A driver hitting someone walking in the parking lot would be covered by a GL policy.
• Workers Compensation Insurance: If you employ the valet drivers and service providers, you will need to make sure they are covered by Workers compensation.
• Garage Auto Liability Insurance: This is an endorsement added to your basic business insurance. It specifically covers any damage to the customer’s vehicle while it is in your parking garage or on your lot. It extends to damage such as collisions or theft when your establishment is responsible for maintaining the vehicle. Most policies state that it provides coverage for care, custody, and control while your valet employees are in possession of the vehicle.

Restaurant Liquor Liability Ins.

What Is Restaurant Liquor Liability Coverage?

Liquor liability insurance, often called Dram shop insurance, helps protect businesses that sell, serve, or distribute alcohol. This type of business insurance can help cover claims of bodily injury or property damage that an intoxicated customer causes after a restaurant serves them alcohol. Liquor liability insurance can be purchased two different ways: as a standalone policy or as an endorsement on the general liability policy or BOP.

If your restaurant gets sued, liquor liability insurance will protect your restaurant by covering your:

• Legal costs, including attorney’s fees
• Settlements or judgments paid on your behalf
• Repair costs to fix property damage as a result of a covered incident
• Medical bills to treat an injury as a result of a covered incident
• What Does Liquor Liability Insurance Cover?

Liquor liability insurance can help cover claims of:

• Assault and battery: You will have coverage if a customer you served alcohol to physically hurts another person.
• Drunk driving: You may have coverage if an intoxicated person your business served or sold alcohol to damages property or causes an accident that leaves another driver with a bodily injury.
• Property damage: You will have coverage for damages that a customer under the influence of alcohol causes to another person’s property.

How Much Does Liquor Liability Insurance Cost?

At its most basic, liquor liability insurance cost is impacted by the percentage of your sales from selling alcohol. So, a bar will likely pay a higher cost for liquor liability coverage than a restaurant or grocery store.

An average restaurant will pay around $1,000 per year for affordable Liquor Liability insurance. The best way to find out what the liquor liability insurance cost for your business will be is to get a quote. It is hard to give an accurate estimate without more information. Most insurance companies use different factors to determine the cost of liquor liability insurance. These factors are:

• Type of Establishment: Certain establishments face more risk, which can increase insurance rates. A fine dining restaurant will generally have lower premiums than a Country/Western restaurant that has a high percentage of alcohol sales vs food sales.
• Location: The state your business is in can have an impact on insurance costs.
• Coverage limits: The higher your policy’s limit, the more expensive your insurance premium. It is important to note that states may require businesses to have a minimum amount of liquor liability coverage.
• Liquor sales: The number of sales your business makes annually can impact your rate. So obviously the more liquor you serve the higher your premium.

Ways To Save Money on Liquor Liability Insurance

Restaurant owners can save money on liquor liability insurance through:

• Packaging the Liquor liability insurance with your other insurance
• Paying premiums upfront instead of monthly. This will reduce finance and service charges
• Reducing risks by giving employees alcohol training

Do I Need Liquor Liability Insurance?

If your Restaurant makes, sells, distributes, or serves alcohol to customers, you will need to get liquor liability insurance. It is almost universally required to have liquor Liability Insurance to be granted a license to serve alcohol.

Liquor liability insurance is also important if your business is in a state with dram shop laws. These laws allow businesses to be held liable if they sell or serve alcohol to intoxicated individuals who cause an injury or damage property.

What Is the Difference Between Host Liquor Liability Coverage and Liquor Liability Coverage?

Liquor liability coverage helps protect restaurants from claims of bodily injury or property damage if they sell, make, or serve alcohol. You can add this coverage as an endorsement on your general liability insurance policy. Host liquor liability coverage helps protect companies that do not sell alcohol but allow people to drink it on their business property. Host liquor liability coverage is included in a general liability policy.

Does My General Liability Insurance Cover Liquor Liability?

Most general liability insurance policies do not include liquor liability insurance. If your business does not sell or serve alcohol but allows people to drink it on your premises, general liability insurance can help cover claims that your business caused bodily injury or property damage.

Liquor liability insurance, however, is not included in this policy and is a different coverage. You will need to get this coverage if your restaurant sells, serves, or distributes alcohol.

What Is Liquor Liability Insurance Called?

Dram shop insurance is another name for Liquor Liability Insurance. A dram shop is a bar or business that focuses on selling, serving, or making alcohol. It also refers to the dram shop laws that a majority of states have.

Restaurant Commercial Umbrella Insurance

A commercial umbrella is a policy that lays on top of your workers’ compensation and general liability policy, offering extra coverage. The coverage works in increments of $1,000,000, and most companies have between $1,000,000 and $5,000,000 in coverage. The cost of this depends on the cost of your underlying coverage, but it is usually very reasonable.

This type of coverage should be explored if you do over $3 million in sales or have other potentially valuable assets. This type of insurance will protect those assets in the unlikely event that there is a catastrophic loss that exceeds any of the underlying policies’ limits.

Commercial umbrella insurance cost

A commercial umbrella insurance policy with $1 million in coverage costs a few hundred dollars a year. Umbrella insurance is not stand-alone coverage. It works with your other liability coverages. If there is no underlying policy such as commercial auto, there is no coverage if there was a claim.

What does commercial umbrella insurance cover?

Commercial umbrella insurance covers the same types of costs as business liability insurance, such as medical expenses, attorney fees, and damages when your company faces a lawsuit. It just offers additional policy limits to protect your restaurant in the event of a catastrophic loss that exceeds the underlying liability policy limits.

Final Thoughts on Restaurant Insurance

Congratulations and thank you for getting to the end of this E-Book. By reading this, you are at least aware of the basics of how Workers’ Compensation Insurance works.

To summarize, the most important parts of this E-Book are as follows:

• Use a knowledgeable agent that will get a number of quotes.
• Make sure you have the proper coverage for your restaurant. This includes proper coverage for property and loss of business income.
• Safety of your workers and your restaurant should be a number one priority. Not only to protect your workers, but it will save you money in the long run.
• Make sure your employees are properly classified. Having your office staff payroll included in your kitchen workers’ payroll can cost you thousands of dollars.
• Make sure your experience modification is correct. If you are unsure about your current EMR rate, contact your insurance agent to find out what your rate is. Your EMR rate can also be found on the “Declarations” page of your company’s workers’ compensation policy. Again, an incorrect figure can cost you money.