Terry's Restaurant Insurance Blog


Restaurant Insurance – Understanding The Basics

If you are considering opening an eating establishment, then one of the hurdles you will have handle is purchasing restaurant business insurance.  You will need to know what types of insurance policies you might need and how they will affect  your business.  This article approaches this problem from an overview perspective and covers really the basic outline of the types of insurance policies that you should consider. For more details on any of these types of policies, you may want to read more of my restaurant blogs at

Property Insurance – You will need to consider coverage for your building and your contents.  If you don’t own the building, check your lease to be sure that your landlord is requiring you to carry coverage on the building.  Also, if you are a tenant, be sure to carry a high enough limit to replace all of your contents in a total loss.  Also, don’t forget to include enough building coverage for the improvements and betterments that you make to the building itself in order to decorate the restaurant as yours.

Liability Insurance – You will need protection for your company for premises liability in case someone is injured on your premises.  A good example of this would be someone who slips on a wet spot and is injured in your restaurant.  In addition, you will need products liability for injury caused by the product you sell, that is the food.  This would protect you if someone breaks a tooth on a meal or claims food poisoning as a result of eating at your establishment.

Business Interruption Insurance – This coverage will provide your lost income and ongoing expenses that occur while your business is out of business due to a covered loss such as fire or tornado.  It is very important to have this protection to make sure that once you rebuild, you are still able to stay in business.

Mechanical Breakdown Coverage – What happens if your air conditioner stops working in the middle of July?  No one will visit your restaurant and suppose it takes 5 days to order the part and get the air conditioner repaired.  How will you deal with the loss of earnings that occurred during this time?  This protection solves that problem.  For more detailed information on mechanical breakdown coverage visit my blog by clicking here.

Liquor Liability – If you sell alcoholic beverages then this protection is a must.  You can be sued by a third party if they are injured by one of your patrons who may have imbibed an adult beverage while visiting your establishment.  These claims can be huge and can come out of nowhere so it is very important that you don’t overlook this protection.

Automobile Insurance – This is a no brainer if you purchase a vehicle in the company name.  But even if you don’t you need this coverage.  At the very least you need non-owned auto protection in case you ask one of your employees to run an errand for you and they have an accident while on that errand.

Workers Compensation – In NC the rules say that you don’t have to purchase a workers compensation policy if you have 3 or less employees.  But what most don’t realize is that you are still on the hook for paying all claims yourself if you don’t purchase a policy.  For more help with workers compensation rules and audit tips, be sure to visit my general blog at

Life Insurance – You may need additional life insurance to cover the money that you had to borrow to set up your business, or you may want to fund a buy out in the case of your death with a key man life insurance policy.

Disability Insurance – don’t forget to protect yourself in the event you become disabled and cannot work for a period of time.


Many of these coverages can be combined into one package policy so that you won’t have 10 or 15 different policies to keep up with.  The best way to handle your insurance needs is to seek out an insurance agent that specializes in restaurants, one who knows the ins and outs of insuring restaurants and already insures 100 or more of them.  At Clinard Insurance Group, in Winston Salem, NC, we specialize in restaurants and write them in both NC and SC.  We understand that not every restaurant is the same and so to avoid making you a square peg jammed into a round hole, we have designed 5 different insurance programs for different types of restaurants.  We have a program for casual dining restaurants, one for fine dining restaurants, one for fast food insurance, one for the bar and grill or tavern insurance  and one for catering insurance.  If you would like help with your restaurant insurance, please call us, toll free, at 877-687-7557 or visit us on the web at


Restaurant Insurance – The Hidden Rate Bias Against BBQ and Seafood Restaurants

As a restaurant owner you get to see the world from the kitchen looking out. In the insurance world I get the same type of view, one that my restaurant clients don’t see. And from this view I can see how some types of restaurants face hidden rate biases that drive their insurance costs up. And I can also see ways that the restaurant owner can avoid these biases. One of these biases has a big impact on BBQ restaurants and seafood restaurants.

You see, if you were to call up the average insurance company underwriter and tell him that you want to write a package policy for the local BBQ joint, you would find that most underwriters would shy away from that account. Why? Well, in the past there have been food borne illness claims associated with barbecue and seafood. And so the underwriter will check his notes and tighten up his rates a bit to protect against the possibility of having to pay this type of claim for you.

If you are the seafood restaurant owner, you are never privy to this conversation. Chances are you will never hear about it or know it happened. But it does happen and your rates are higher because of it. So what can you do to protect your restaurant from this inherent bias on your rates? The answer is that you need to deal with an insurance agent who has the experience of handling hundreds of different restaurant clients so he knows how to work the system to get you a better rate. In addition, you want the agent who has access to insurance companies who specialize in writing restaurants. There are two reasons for this.

First of all, the insurance company that actively seeks business from restaurants will have the law of large numbers working in their favor. Because they write so many BBQ or seafood restaurants, they will have a better understanding of exactly what the food borne illness risks mean and they will not have to overcharge to account for something that they don’t fully understand.

The second reason for you to seek out a company with an established restaurant insurance program is that these companies will be able to offer you loss control support and help to prevent this type of claim. And by doing this, they will be able to offer you a better rate as well. It is a win win situation for the insurance company and for the restaurant owner.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping restaurant owners with all of their insurance policies as well as their loss control needs. We have specially designed programs for your restaurant, whether you are casual dining, fine dining, fast food, bar and grill, or even a caterer. We want all of our restaurant clients to be informed insurance consumers. If you need help with your restaurant insurance, please call us, toll free at 877-687-7557 or visit us online at


Restaurant Insurance – What is Mechanical Breakdown Coverage

Some restaurant owners have heard of mechanical breakdown coverage and some of those have a clear understanding of what it is. There are quite a number of insurance agents out there who do not really understand how this protection works. But it is a coverage add on that no restaurant should do without. Think of it this way, everyone likes to eat their food while it is hot but no one likes to eat their food while they are hot. If you can remember that, you can understand this coverage and why you need it.

Mechanical breakdown coverage is a protection add on that should be on every restaurant insurance policy. If you own a restaurant, and you don’t have this coverage on your policy, you should consider firing your agent immediately. This protection is fairly inexpensive and it could save you a huge loss somewhere down the road. So doing without it rarely makes sense for any restaurant owner.

Let’s talk a bit about what mechanical breakdown coverage is and how it works. The first thing you want to understand is that the coverage is not for the breakdown of the machinery itself, but rather for the consequential losses that you will absorb as a result of the temporary loss of some equipment. The most common type of loss for mechanical breakdown involves air conditioning units. Now just imagine that stretch of 5 days in a row when the temperature soars into the high nineties and the compressor on your air conditioning unit on the roof of your building goes out. Then you find out it will take 3 days to get the part ordered and installed. How many meals do you think you are going to serve over the next 3 days as the temperature inside of your restaurant creeps up into the low nineties each day? You know the answer -- None. And what is that loss of revenue going to do to your cash flow, not to mention your bottom line? And it doesn’t matter if you don’t own the building and are not responsible for the air conditioning unit’s repair costs because we are talking about the consequential losses as a result of the mechanical failure. In fact, I would argue that if you are a tenant, then you need this coverage more than ever because now you are at the mercy of your landlord and how quickly he or she acts to get the air conditioner problem handled.

Of course this coverage doesn’t just apply to air conditioning unit breakdown, it could be your freezer or your cooler that puts you out of business for a while. Any of these types of losses could put a big crimp in your cash flow and your income. So please take a moment and review your policy and make sure that you have purchased mechanical breakdown coverage.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping restaurant owners all across North Carolina and South Carolina with their restaurant insurance policy needs. We have specialty Restaurant Insurance Programs designed for Fine Dining Insurance, Casual Dining Insurance, Fast Food Insurance, and Bar & Grill Insurance as well as Catering insurance so we can help you with your restaurant insurance no matter what type of restaurant you own. If you would like an insurance second opinion on any of your restaurant insurance issues, or if you would like a quote on your current restaurant insurance, please call us toll free at 877-687-7557, or visit us on the web at


Restaurant Workers Compensation Insurance – Avoid The Small Loss Temptation

Most restaurant owners understand the basics of workers compensation insurance and most have heard of the experience modification factor. And to show how a little bit of knowledge can be dangerous, many restaurant owners even know that a lot of small losses can have a dramatically negative impact on this modification factor. But using this knowledge in the wrong way can lead to behavior that carries far too much risk for the average restaurant owner.

You see, when it comes to the NC workers compensation insurance policy, the experience modification factor calculation is broken down into two parts. One part measures small losses and attempts to account for loss frequency in an organization, while the second part measures loss severity. This first part weighs all losses under $5000 equally. So, if you have an employee who gets something in his eye and runs down to the local doc in the box for treatment, I can understand your desire to just pay the $100 to the doc in the box yourself and move on without filing the claim. But I’m here to say that although this strategy looks pretty brainy at first blush, it is not without tremendous risks.

The problem for you as the restaurant owner is that you don’t really know where any given work comp claim may lead. What at first looks like a routing eye wash claim could end up with an infection and even permanent partial disability. And if the insurance company thinks that you have made the claim worse by failing to notify them of the injury, then the can fight you on this claim and potentially leave you holding the bag for the claim. Paying a long term disability claim out of your pocket could possibly ruin your company and take from you all that you have worked so hard to build. And what you stood to save on your mod is just not worth the risk of losing your business. So please, always file each and every workers compensation claim within 5 days of the injury and resist the temptation to pay these claims out of your pocket just to protect your experience modification factor.

If we can help you with your restaurant insurance needs, please call us. We have developed several specialized restaurant insurance programs to make sure your round peg is not jammed into a square hole. We have a fine dining restaurant insurance program, a casual dining restaurant insurance program, a fast food restaurant insurance program, a bar and grill restaurant insurance program and even a catering company insurance program. If we can help, please call us, toll free, at 877-687-7557 or visit us online at

The source data for this article can be found at the restaurant insurance answer guy site.


Restaurant Insurance – Don’t Forget The Workers Compensation Policy

Restaurant insurance can be found in many different forms. One coverage that restaurant owner should have is workers compensation insurance. In North Carolina, the law states that if you have fewer than 3 employees you don’t have to purchase workers compensation insurance . But what this rule doesn’t tell you is that not buying a policy could put your very company at risk.

In NC, the workers compensation law does give you an out if you have less than 3 employees. In fact, there are no real teeth in the law that will catch and find employers who have 3 or more employees who also don’t purchase a workers compensation insurance policy. So, yeah, you could go years without purchasing a workers compensation policy for your restaurant. But that would be a very dangerous choice. Here’s why:

Although the law may not require that you actually purchase a workers compensation insurance policy, it will require that you pay all of the claims yourself just as if you were the insurance company. Workers compensation benefits in North Carolina are statutory. That means that exactly how much gets paid for each type of illness or injury has already been determined by state law. This means if you are paying out of your own pocket for a claim, you will not have the opportunity to determine how much you are going to pay.

So, using the loophole in the law to avoid buying a workers compensation policy only gets you out of paying the policy premium. It does not get you out of paying the costs of any and all claims. And these claim costs can be enormous. Imagine coming up with $100,000 to pay for injuries that resulted in permanent disability, then paying disability payments for years after that for one of your employees. Pretty scary huh? So even if work comp insurance seems expensive, you should realize that purchasing it is a no brainer because going bare means you are pretending to have the assets of an insurance company. For most restaurant owners, that just isn’t the case.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in both North Carolina restaurant insurance and South Carolina restaurant insurance. We want all of our clients to be informed insurance buyers and we work hard to help them understand all the ins and outs of the restaurant insurance policy. It doesn’t matter if your establishment is fine dining, casual dining, fast food, bar & grill or even catering, we understand your business and we have a program that can help you. Please call us, toll free at 877-687-7557 or visit our Restaurant Insurance Page.