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What Insurance Agents Need to Know about Food Business Risk

Liquor Liability Is an Everyday Threat

of all traffic fatalities are alcohol-related

If that stat isn’t sobering enough, the CDC also estimates nearly 30 people die in alcohol-related car crashes every day. And it’s not just the aftermath of a DUI that bar and restaurant owners need to worry about. Alcohol-fueled fights, vandalism, accidents, and assaults can all land the business that served the booze in court. Before your clients even consider serving a single drop of alcohol, make sure they have sufficient Liquor Liability Insurance in place.

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Important Insurance Policies for Food Services Professionals

Restaurant owners, caterers, and other food industry professionals encounter a unique set of risks in their day-to-day operations. The perils they face can arise from the equipment in their kitchens, the customers at their tables, or even the hackers infiltrating their point-of-sale systems. Plus, these vulnerabilities can vary drastically depending on your client's profession. For example, a food truck owner also has to contend with the threat of auto accidents. That's why it's essential to get familiar with the risks your food services clients may face. Understanding their exposures can help ensure you connect them with adequate coverage.

Whether they own a food truck, banquet hall, or bar, your clients in the food services business will need guidance in selecting the appropriate policies. Here are some coverages your client should consider:

General Liability Insurance

If a customer slips on a spot of spilled coffee in your client's restaurant, your client could be sued for the subsequent medical expenses. General Liability Insurance protects your clients against lawsuits over bodily injuries on their premises or damages they cause to someone else's property. It can cover legal defense fees and settlements or judgments.

Property Insurance

Food services professionals rely on their commercial space, equipment, inventory, fixtures, and furnishings to run their business. Property Insurance shields these business assets against loss or damage caused by fire, windstorms, theft, and certain other events. It compensates your client for the cost of repairing or replacing their insured property. This policy can also be tailored to your client's unique needs. Popular riders include Food Spoilage coverage for restaurant owners (which covers the cost of replacing perishable items lost in a power outage) and Off-Premises coverage for caterers (which protects gear in transit).

Liquor Liability Insurance

If your client's business serves alcohol, they need protection from lawsuits arising from alcohol-related accidents and injuries. Liquor Liability Insurance covers legal defense fees and settlements or judgments when your client is sued for overserving a patron who harms someone else.

Cyber Liability Insurance

Most food services businesses use a point-of-sale system, which makes your clients vulnerable to data breaches. Not to mention, restaurants are the single most targeted industry for cyber attacks. Cyber Liability Insurance helps your clients minimize the impact of data breaches by covering the cost of notifying patrons and implementing credit-monitoring services after an attack.

Hired and Non-Owned Auto Insurance

If your client ever rents vehicles for their business or requires employees to drive their personal vehicles for work errands, they may need Hired and Non-Owned Auto Insurance. This coverage steps in when your client's business is sued for an accident that happened in a non-owned vehicle during a business errand. The policy only covers liability costs (i.e., legal defense fees, settlements, or judgments) - not physical damages.

Workers' Compensation Insurance

Workers' Comp Insurance is a state-regulated coverage - one that most employers are required to carry, regardless of how few employees they have. Your clients' coverage needs will vary depending on where they live. This policy kicks in when your clients' employees are injured on the job. It can cover their medical expenses, disability wages, and more.

Tips for Insuring Food Services Clients

Even if you have written policies for food service professionals in the past, it's important to keep in mind that each client has different insurance needs. Finding the coverage that fits their particular risks may take some research. Here are some quick tips to help ensure your clients' exposures are properly addressed:

Investigate a Business Owner's Policy (BOP)

Small businesses with low risk profiles may qualify for a Business Owner's Policy (BOP). A BOP bundles General Liability and Property Insurance into one convenient package that keeps your clients' premiums low.

Explore Umbrella Insurance

Umbrella Insurance is another cost-effective way to amplify client coverage. Basically, if your client is sued for an amount that exceeds their General Liability or Hired and Non-Owned Auto policy limits, Umbrella Insurance can cover the difference.

Be sure to walk your client through the coverage provided in the policy. Your client wants to save money, but not if it means leaving an important part of their business exposed to risk.

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