Bars, taverns, restaurants, cafeterias, and other eating and drinking places have very high insurance needs in three separate areas. The first is property protection for physical damage to equipment, furnishings, building and supplies due to fire and other perils. The second is premises liability coverage to protect customers due to slips, trips and falls on the premises, as well as for consumption of food products. The final need is protection for employees due to frequent cuts, burns and other common employee injuries. Establishments that sell or serve liquor or other alcoholic beverages also need liquor liability coverage. Continue reading for more information or contact the Konecki Insurance Brokerage.

 Package Policies

Package policies are the most convenient way to combine coverages. Some eating and drinking establishments are eligible for coverage in a businessowners policy. Most others are eligible for a commercial package policy and can use its flexibility to meet their specific coverage needs.

BUSINESSOWNERS POLICY (BOP) is a "homeowners" approach to packaging insurance for businesses. When an amount of insurance on building and/or contents is selected, it automatically includes a broad range of additional coverages for an indivisible package premium. For eligible risks, the policy provides an alternative to the commercial package policy (CPP). The BOP is designed for small to medium-sized apartment and residential condominium associations, office and office condominium associations, mercantile risks, wholesale operations, small artisan and specialty contractors, small fast-food restaurants or those with limited cooking arrangements, convenience stores with gasoline pumps, laundry and dry-cleaning operations. It is also available to a select number of service or processing operations.

For smaller operations, a BOP is generally more desirable than a CPP. Some coverages automatically included are debris removal, automatic increase in building insurance, seasonal automatic increase, personal property off premises, business income and extra expense. The valuation terms are replacement cost, subject to insurance to value considerations. Building, personal property, and business income coverages are written without being subject to a coinsurance clause. Property valuation is replacement cost, as long as at least 80% of the value of the structure or personal property is maintained at the time of loss. Business income is included without a specific limit, subject to a maximum of 12 months actual loss sustained.

COMMERCIAL PACKAGE POLICY (CPP) is not a separate coverage form but rather is a convenient collection of several coverage forms packaged together. The CPP must include at least two of the following commercial coverage parts: automobile, property, crime, equipment breakdown protection, general liability, farm or inland marine. Insurance companies provide premium discounts in package policies to encourage the insured to combine as many coverages as possible in one policy and in a single company. The discounts vary by the class of business and the line of coverage. The discounts apply only if the CPP has both property and general liability coverages at the same location.

While it is desirable and sensible from the premium standpoint to include every eligible coverage in the CPP, it is not necessary to do so. Some insureds and carriers prefer to write certain lines of business on a monoline basis and keep only certain lines in the package. This customized coverage approach makes the CPP the most flexible of all commercial lines policies.

Property Coverages

Restaurant kitchen equipment, inventory and dining room fixtures are common exposures for most eating and drinking places. Many of these establishments do not own the buildings they occupy but have long-term leases and have invested money in various improvements and betterments, including cooking equipment, dining room decorations and permanent fixtures. A thorough property inventory helps to determine the items to classify as building and as business personal property separate from improvements and betterments. Two primary potential loss exposures that must be covered are fire, because of cooking operations, and theft, due to the presence of liquor and other valuable inventory on the premises. Time element coverage is important and should not be overlooked. A peak season endorsement is important if the operation has any periods of higher sales activity compared to normal activity.