What do I do when a claim occurs? Should I contact the insurance company and file a claim? This is a very important question, and since it comes up every so often, it's worth writing about. Sometimes business owners want to take matters into their own hands and fix a problem rather than filing a claim. After all, most are entrepreneurs and this take action mentality is instilled in them, but sometimes this can get a business owner in trouble. So what should be done in the event of a claim, lawsuit, or occurrence? Let’s take a look at what the policy says.

Whenever the insured becomes aware of an occurrence or offense that may result in a claim, notice must be given to the insurer as soon as practicable. The notice may be given either oral or written. It should state (1) how, when, and where the occurrence happened, (2) the names and addresses of any injured persons and any witnesses, and (3) the nature and location of any damage or injury resulting from the occurrence or offense.
 
When a claim or suit is brought against any insured, the insured must (1) immediately record the details of the claim or suit and the date received and (2) notify the insurer in writing as soon as practicable.
 
The named insured is required to (1) immediately forward to the insurer copies of any demands, notices, summonses, or other legal papers received in connection with the claim or suit; (2) authorize the insurer to obtain any legal records or other documents; (3) cooperate with the insurer in the investigation, settlement, or defense of the claim or suit; and (4) assist the insurer in any action against any third party that may be liable to the insured because of the injuries or damage for which claim is made.
 
Finally, the condition makes it clear that no insured may make voluntary payment, assume any obligation, or incur any expenses without the insurer’s consent. Any voluntary payments made by an insured or expenses incurred by an insured without the insurer’s consent must be paid by the insured.  Doing any of the above is putting you in a position of assuming fault, responsibility, liability, etc. It is not your job to do this. Let the insurance company handle it. The only exception is the expense incurred for first aid at the time of the occurrence.

The policy is very clear on this provision and it also states, if the insured does not comply with all of the requirements of this condition, the insurance company may be relieved of its duty to defend and pay claims. I suppose you can think of each claim as a crime scene, don't tamper with it. If you have any questions about this policy provision, or any other Business Insurance question, please feel free to contact me.
 
Jason Matison
Commercial Insurance Agent
Austin, Texas

Liquor Liability for Restaurants is something that should be addressed more when it comes to Business Insurance. Many restaurants feel they don't serve enough liquor to warrant this coverage. Meaning, they're not a bar, so it's really not a high priority. The reality is, it's very important and your exposure for a claim/loss is probably bigger than you think. It only takes one claim to put a restaurant out of business and a Liquor Liability claim could be that claim. Below are just a few reasons why you might want to consider Liquor Liability Insurance for your restaurant. 

It only takes one drink.
That's it. It only takes serving one drink to be brought into a law suit. What do I mean by one drink? Let's say someone has been drinking all day. Yes, people day drink, especially when it's great patio weather here in Austin, Texas. This person has been drinking all day at a bar and decides they don't want bar food for dinner. The consensus among the group is to check out that new hip restaurant downtown.  They decide at this restaurant to only have one for dinner before they have to drive home. Take in mind these folks are veteran day drinkers, so the server doesn't pick up on the fact they've been drinking all day. Simply thinking they're just a happy jovial group that doesn't get out much. Nevertheless, they are served one drink, finish dinner and call it a day. On the way home the driver gets into an accident and injures multiple family. Bodily injury and property damage is close to $1M. The driver only has minimum limits on their auto, which will cover about $60k (take into consideration this number varies by state). Where do you think the lawyers are going to go to get the remainder of that money (after Under Insured coverage is exhausted)? History will show it will be the last person that sold them alcohol, the restaurant. Doesn't matter if it was one drink or ten drinks, they are liable. Don't think you're liable? Well, you still have to defend yourself in court and that cost you and your business a lot of time and money.

Intoxicated people do stupid things sometimes. 
Let's say an intoxicated person gets out of control and assaults or injures a patron at your restaurant. Liquor Liability, in most cases (check your policy), will pick up this exposure. If we look at the definition of each, we can see that these things can happen when alcohol is involved. According to FindLaw.com, Battery is "the intentional touching of, or application of force to, the body of another person, in a harmful or offensive manner, and without the victim’s consent". Assault is "An intentional attempt or threat to inflict injury on another person". The bottom line, you can have controls in place to prevent Assault & Battery, but some situations might be too difficult to control, especially on a busy day. 

We don't serve liquor, only beer and wine.
Believe it or not, people have told me this when I mention Liquor Liability to them. If you serve beer and/or wine, you still need Liquor Liability Insurance for your restaurant. 

​As you can see, Liquor Liability for Restaurants is a must when it comes to Business Insurance. If you have any questions about this coverage, please let me know. Never assume that Liquor Liability and Assault & Battery are included in your policy. Also worth noting, both have a limit, so if you put your policy in force some time ago, you should review your limits with your agent. If you would like a quote, I have included a Liquor Liability Insurance application here. If you have any questions about this coverage, or any other type of Business Insurance, please feel free to contact me. 

Jason Matison
Commercial Insurance Agent
Austin, Texas 

Every restaurant is unique, and it's not just the food that makes it unique, it's also the atmosphere. Think about some of the most popular restaurants you've frequented. Property is one of the most overlooked coverages when it comes to Restaurant Insurance. This is because sometimes it's the ambiance that can add value to the restaurant experience. Here's a breakdown of Property Insurance for Restaurants:

Tenant Improvements and Betterments also known as your build-out, if you're leasing. If you own the building, this would be Building Insurance. 

Business Person Property: Equipment, furniture, and stock would fall under this coverage. Business Personal Property (Also known as BPP) coverage can provide coverage for fire, theft, smoke, vandalism and other perils. Make sure to review the coverage limits as needed. 

Business Income: Provides income if a restaurant is temporarily out of business due to a covered peril. Maybe it's a fire, smoke, or even vandalism, think about all the costs you have even though you don't have revenues coming in. Rent, loan payments, wages, taxes can all continue to accrue during a closure. There's also Business Income for cloud service interruption now. This coverage helps pay for lost business income if you need to suspend or slow business operations because of an unplanned and unannounced interruption in your cloud service.

Temperature Change and Spoilage: Your refrigeration system suffers a mechanical breakdown which causes all perishable products to spoil. This coverage helps cover the cost to replace the lost stock. Some restaurant policies will have a sub-limit for this type of exposure. If it's listed as a covered peril, make sure you understand the limit and if a deductible applies. For example, I've seen policies that automatically include $5,000. That might not be enough. 

Food Contamination: Provides coverage for lost income if your operations are suspended by a public health authority due to the discovery of food contamination.

Signage: Sign coverage is usually included on a Businessowners Policy (BOP), but is limited to a certain amount. I highly recommend having a discussion with your insurance company or agent about this coverage. 

Fine Art: If you have fine art in your restaurant, you need to make sure it's valued properly on the policy. This could mean providing appraisals. There could be a limit on the policy for this coverage. For example $2,500. This might not be enough. Fine art can get tricky to insure. Make sure you're aware of your limits and deductible. 

This is just a starting point when it comes to Property Insurance for Restaurants. I highly recommend making sure you review the coverage limits for each of these. Also understand what perils are covered and if a deductible applies. If you have questions, please feel free to contact me. I am happy to help. 

Jason Matison
Commercial Insurance Agent
Austin Texas