As a restaurant owner, there are many critical parts to running your business. But, none as important as buying general liability insurance for restaurants.
This industry unlike many others is a very complex business.
This is true regardless if your restaurant is located in Los Angeles CA, or Orange County California.
Think about it, your dealing with a fast pace business, with many behind the scene components.
This is why you need specific coverage points for your restaurant.
Different Insurance Programs
There are many different types of insurance programs that exist within the market.
So, comparing coverage for your specific industry is crucial.
Restaurant coverage unlike other business insurance, is uniquely tailored to cover all the losses and claims.
These are losses that could occur as a result of doing business as a “restaurant owner”.
What is Commercial Insurance Protection?
This type of policy will protect your business in the event a covered loss should occur.
But, more importantly, it provides peace of mind.
This way you can focus on your true passion, making delicious food for the world to taste!
As a restaurant owner, you understand the importance of maintaining a liability insurance policy on your restaurant as top priority.
You understand that:
- customer allergic reactions to your food,
- or other mishaps could occur during the course of your operation.
This is why you understand that without liability insurance protection.
If left unattended, your restaurant’s future is uncertain and at risk to the elements associated with insurance exposure.
With certain segments of the population inclined to injuring themselves inside a business, you are leaving yourself open to potential lawsuits.
This can mean the difference of you maintaining your current operation or being forced to shut your doors permanently to the public.
What is Business Owners Liability Coverage Form?
The business owners liability coverage form will provide you with two major coverage descriptions:
- business liability
- and medical payments.
This portion of coverage found on your restaurant policy, covers your legal liability.
This is for any damages that occurred as a result of bodily injury or property damage.
This coverage will also cover personal injury and advertising injury.
This broad definition of business liability is very similar to the combination of both insurance coverage in a commercial general liability form.
However, business owners coverage for a restaurant insurance policy will be always written on an occurrence basis.
This is for the coverage of bodily injury and property damage.
The coverage includes fire legal liability which is a separate limit of insurance for any one fire or explosion.
This information is labeled in the declarations page of your insurance policy.
In addition, your insurance company will provide defense costs.
Also, the standard set of supplementary payments found on liability policies.
These cost include:
- bail bonds,
- settlement expenses,
- loss of earnings,
- prejudgment and post judgment interest on amounts awarded and so forth.
Medical Costs and Expense
The medical expense insurance covers medical expenses for bodily injury caused by an accident on the premises the insured owns or rents.
This is including the ways next to such premises, or an accident because of the insured’s operations.
Medical expenses incurred within one year of the accident date are covered, and payments are made without regard to fault or negligence.
Another area to examine on your business insurance policy for your restaurant is Liability Endorsements.
These are to serve the change in insurance coverage or provide additional coverage to your policy.
As an example, a hired auto and non owned auto liability endorsement may be used to add coverage.
This can be for either or both of these automobile exposures, if the insured does not have a commercial auto policy.
Add On Policy Coverage
If the insured has a commercial auto insurance policy, than the endorsement is not available as an add-on to your Business Owners Policy.
A comprehensive business liability exclusion endorsement may be used to exclude specific operations or locations from coverage.
A limitation of coverage to designated premises or project endorsement may be used to exclude coverage.
Except for the premises or projects specifically designated in the declarations page of your business insurance policy.
A variety of different endorsements exist and can be used to add additional insured parties to the policy.
Special endorsement include:
- for manager or lessors,
- state or political subdivision,
- townhouse associations,
- co-owners of premises,
- architects and surveyors, and others.
After exploring the liability portion of your business owners insurance policy, you have one more area.
The next area to explore is the property insurance portion.
Restaurant property insurance in California covers your actual property and assets as described on your declarations page.
Restaurant property insurance coverage can include:
- exterior fixtures,
as well as equipment inside the restaurant:
- such as tables,
- and other fixtures that are all part of the restaurant property.
All these items will be categorized and listed under this section so, make sure to ask for this type of coverage when comparing online insurance quotes.
Actual Property Building
The largest investment you have next to the actual building itself.
This part of the property insurance portion is the equipment you own so, make sure you are fully protected.
A vital section in the restaurant insurance policy is labeled in the insurance world as worker’s compensation.
Employees work hard for you and if they should get injured while on the job.
This is why the state would compensate them for the time they may need to take off from work in order to recover.
Having worker’s compensation on your business insurance policy protects:
- you, the business owner, against any action by an employee that could otherwise cripple you financially.
Hidden Fee Cost
The cost of being sued by employees can be detrimental to the restaurant owner.
They may not have worker’s compensation as a part of their restaurant insurance policy.
Make sure that cheap business insurance policy is not costing you down the road.
Restaurant owners are business owners who need specialized insurance coverage to suit their specific needs.
Many insurance layers exist under a store Policy.
This is why it is important to do your homework regardless if you are shopping for cheaper insurance rates.
Or, just researching ways to lower your current Restaurant Insurance.
Duties in the Event of Loss
The condition you should look at is your duties in the event of loss:
- These include giving prompt notice of loss,
- providing a description how and when the loss occurred,
- protecting property from further damage.
In addition, you must permit your insurance company to inspect property and submit a signed proof of loss within 60 days after a request.
What are Components of a Business-owners Policy?
Each BOP is a complete contract and must include the following parts in order to be complete:
- the business-owners policy declarations,
- the business-owners policy coverage form
- endorsements as required
The policy declarations will include the following:
- your policy number,
- name of the carrier, the name of your agent,
- and the name,
- and address of the insured,
- in addition to the policy period.
Personal Insurance Coverage
This declaration page like your automobile policy, outlines your coverage options and limits of coverage.
Spaces are provided for a description of the business.
The form of business locations of described premises, and name and address of any mortgage holder would be needed.
Limits of Coverage
Limits of insurance will be shown for buildings and for business personal property.
Limits of coverage for optional coverage’s will be shown.
Optional coverage will apply, only if the appropriate boxes are checked indicating that optional coverage options apply.
What is Standard versus Special?
Property coverage must be written on either the standard or the special property coverage form.
These two forms however, may not be combined.
Most policy types provided by the two forms are identical, thus reason for not having both at the same time.
The major differences are in the covered causes of loss.
The standard coverage is similar to basic coverage provided by other commercial forms.
While special coverage means the same open perils type coverage provided by the special causes of loss form.
What are Property Endorsements?
Endorsements as you have learned, are changes made to your policy.
On the commercial property front, there are optional coverages that are not automatic on your declaration entry.
This is because, these policy changes or endorsements, have to be attached in order for coverage to take effect.
This endorsement procedure has many different types of coverage.
So, lets look a the most common property endorsements you will find.
Different Property Endorsements?
The first endorsement that you can have attached to your declaration page is, accounts receivable coverage.
This coverage can be added to your business owners policy.
This specific property endorsement is similar to what is provided on a mono-line account receivable coverage form.
This is when necessary, payment amounts that are due from the business customers.
This can only be collected because of loss or damage to records that were listed and covered under the cause of loss.
This will also include interest charges on any loans that my be needed.
Loans are a good way to offset the uncollectible accounts, which is from the added expense from the normal collection maintenance.
Another endorsement you can look at adding to your property policy is called, valuable papers and records coverage.
Sounds like a valuable package and is also similar to its mono-line counterpart.
This endorsement has historically been used to insured against loss or damage to certain type of valuables.
These can include the following:
- manuscripts and records
- printed or written documents,
- inscribed documents
Coverage is not applied to money or securities however.
So, make sure to review your documents if you have any questions on coverage and exclusions.
There are always revisions to policy forms to keep up with current trends and times.
This will ensure that proper coverage is available as environmental conditions start to change.
For example, optional coverage plans may start to become available.
For example, the most recent and trend setting one is, electronic media and records.
This type of endorsement for property will include the following information:
- sorted data
- programming records
- data processing storage
Do you live in California?
If the answer is yes, then you understand the relationship California has with earthquakes.
Thankfully, there is a coverage form that can be tagged along to the policy application.
This earthquake form may be attached to your BOP as an added coverage for earthquake and volcanic eruption losses.
This coverage will continue for up to 168 hours after the policy expiration if an earthquake or volcanic eruption event should occur before the policy actually expires.
What is Condominium Risk Protection?
There does exist other endorsements that have to do with condominium risks.
These forms provide condo association coverage.
This protection is also for the coverage for condo commercial unit owners coverage.
Very popular for areas where owners will leas out property or have establishments for leas or rent.
These forms will follow your commercial property page.
It is unique coverage for ownership situations when condos and insured need certain policy provisions to address this relationship.
Commercial condo unit owners can have the option to buy a unit owners coverage option endorsement.
This is another example of the option property endorsement policy forms under this category of insurance.
Difference in Coverage?
There are minor differences in the optional coverages available with each form.
However, keep in mind the major property coverages are the same.
Business-owners property coverage can be discussed as a single topic.
Both business-owners forms provide the following two major coverage Options:
- Coverage A – Buildings and the second is
- Coverage B – Business Personal Property
Limit of Coverage
A limit of coverage must be shown in the declarations page fore each type of covered property.
As an example, an insured businesses that is a tenant would not required the building coverage.
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