Fidens noted several coverage areas that were frequently problematic or misplaced when scrutinizing new clients’ policies this year. Vice President, Daniel Kelleher commented "there were several instances where we found that clients were either overpaying for excessive coverages, being excluded from relevant risks, or not being properly credited for risk prevention procedures."
Fidens encourage all bar & restaurant establishments to briefly review these troublesome items and contact us with any questions.
Loss of Business Income/Profits Insurance
Evaluating adequate recovery of business income should be consistent with seasonal profits and the premium paid for loss-income insurance. When reviewing many policies, we find an overwhelming number either have insufficient coverage or are throwing away money on premium that is disproportional with the true value of income.
Knowing what losses are covered
Insurance policies exclude many general disasters that may be relevant to your area. We have found certain clients not being covered for any sort of water damage, when this could easily be included for a marginal increase in premium. Other highly susceptible clients unknowingly had wind or hail damage excluded from their policies. Careful evaluation of your policy will identify and resolve implications of these pitfalls.
One of the most frequent claims are liquor induced fights or altercations. This can occur by the mere act of an unruly patron being escorted from the establishment. It was eye-opening when several new clients had assault & battery coverage excluded from their policy. It was even more disconcerting that a handful previously had this coverage, yet obtained a cheaper policy from an agent who neglected to inform them of an assault & battery exclusion.
On another note, there was an alarming number of clients not receiving proper reductions in premium credited for their risk prevention measures. This will be further explained below.
The frequent cause of loss under this coverage is when an establishment loses power and the entire contents of a freezer are spoiled. This policy pays to replace all that was loss. A handful of new clients' policies irrationally did not have this coverage or was greatly undervalued.
Practicing Risk Management
Formal training programs and enforced safety procedures can reduce the risk of loss. With fewer claims and established procedures, businesses that are in a much better position to negotiate lower premium insurance.
Liqueur Liability was one of the most areas for improvement. This liability costs the industry millions of dollars a years in claims. The businesses that produce, distribute, or serve alcohol could be liable for injuries/ damages that occur as a result of actions, behaviors, or conduct of a customer who drank too much.
Complying with liqueur laws and practicing sound risk management is essential for a businesses success. For instance, adequate moderating of costumer alcohol consumption can be attained through a simple checklist for all employees to follow. Procedures can include:
Copiously provide water to all guests.
Add extra ice to drinks to slow the rate of alcohol absorption.
Offer free food and non-alcoholic drinks when a guest shows signs of intoxication.
Limit the number of straight-alcohol shots.
Offer only refills after guests have finished drinks they already have.
This is only one instance of risk management and a bar & restaurant should contact us for consultation regarding procedures in other areas such as food preparation.
For all the foregoing insurance reasons, it is important to have a competent insurance broker review your policies and working procedures in detail.