Get the Right Kind of Insurance for Food Service Business

By Floyd Arthur

If you’re the owner of a food service business, you know that preparing and serving food to

the public comes with inherent risks. Not only are food service establishments noisy, chaotic

places behind the scenes, there’s a great deal of hustle and bustle in the dining areas as

well. Spills, slips and falls and other accidents are likely, no matter how carefully things

are run. Add to that the risk of food-related issues such as allergies and and food

poisoning, and the list of hazards becomes very long.

Fortunately, most companies that offer commercial general liability insurance write

policies for restaurants and bars. Here’s a quick overview of what you should be looking

for to be certain your food service business is adequately insured.

General liability insurance

General liability insurance provides coverage for your business in the event you are

responsible for damages in many different types of claims. These include:

Bodily Injury

If a customer slips and falls and breaks her hip entering your restaurant, general liability

insurance will cover her medical bills, lost wages and any compensatory awards. It will

also pay your legal defense costs in the event you are sued.

Similarly, if a customer eats food your employees prepared and later becomes ill, your

general liability insurance will cover medical bills, hospital costs and any court-awarded

compensation. It will also cover court costs and legal fees.

Property Damage

There are a number of accidents that can occur in a restaurant or food service business

that could result in damage to a patron’s property. For example, an employee could spill

coffee on someone’s brand new fur coat or expensive Prada purse, or a warming plate

could malfunction at a party where you were providing food, causing a fire. In either

case, your liability insurance would pick up the cost of repairing or replacing the

damaged property as well as defense costs if you were sued.

Advertising and Personal Injury

If you advertise your business in print or online, your general liability insurance will

cover claims of copyright infringement if you are sued for using intellectual property

that belongs to someone else. For example, if you inadvertently use a logo that is very

similar to the trademarked logo of a competitor, your insurance would pay any court

awarded damages and defense costs if you are sued. Most policies also cover court costs

and legal fees if you are accused of libel or slander.

Liquor Liability Coverage

If your establishment serves liquor or allows liquor to be consumed on the premises,

your general liability insurance will not cover damages due to alcohol-related events.

Therefore, liquor liability coverage is a must.

Most states in the U.S. have so-called “dram shop laws” that allow injured parties to

hold bars, restaurants and alcohol retailers accountable for injuries caused by an

intoxicated customer. These may be minor injuries caused by a physical altercation or a

drunk-driving accident in which one or more victims are killed.

Not all dram shop lawsuits are decided in favor of the plaintiff. In order to prevail, the

injured party must prove that the server acted recklessly, which typically involves

establishing that the server:

* Intentionally served a patron alcohol

* Knew that the patron was a minor or was already intoxicated

* Consciously disregarded an obvious and substantial risk that serving liquor to that

patron would cause physical harm to the patron or to others.

If found liable, your establishment could be responsible for additional damages for

intentionally selling liquor to a minor or intoxicated person, violating state liquor laws

or failing to properly train your employees. Such damages can easily add up to hundreds

of thousands of dollars, so make sure you have enough coverage in place.

Property and Casualty Coverage

This coverage protects your business property, such as the building, cookware,

equipment and appliances, computer systems, and furnishings in the event of a covered

peril, such as a fire or theft. Some policies also covers property belonging to a third party

that is left in your care, such as items left in a coat check or cars in a valet parking lot.

Worker’s Compensation

Worker’s compensation insurance covers the cost of medical care, lost wages and

rehabilitation if an employee is injured on the job. Most states requires all employers,

including small businesses, to have worker’s compensation in place. However, even if

there is no statutory requirement that you have it, workers compensation insurance is

always a good idea. If you are not covered and an employee suffers a catastrophic injury,

he or she will be financially devastated and your business will undoubtedly be sued.

At Carmoon Group, we offer small business insurance coverage tailored specifically to

your needs. Whether you own a restaurant, food truck, catering business or bar, we can

get you the coverage you need at an affordable price. Call us any weekday between 9

a.m. and 6 p.m. at 516-292-3780 to make an appointment for your insurance review. No

time to call during business hours? Request a free consultation online and we’ll get back

to you at a convenient time.

Visit www.Carmoongroup.com for FREE 30-Minute Consultation!