Terry's Restaurant Insurance Blog


Restaurants – Here’s Just Another Reason To Buy Employment Practices Liability Insurance

Employment Practices Liability Insurance, called EPLI is a relatively new type of insurance coverage that is not well understood by many restaurant owners.  If you haven’t been buying a particular insurance policy in the past, then it may be hard for you to imagine adding another insurance policy to your list of expenses.  But this one is pretty important and the risks are growing each year.  The large EPLI claims that are common on the west coast and in the northeastern U.S., are starting to show up as much more common now in the typically less litigious states like North Carolina, Georgia, Tennessee and South Carolina. 

EPLI is designed to protect the employer from lawsuits brought by employees for grievances ranging from discrimination in the workplace or during the hiring or firing process to harassment issues, either those stemming from the employer or from a manager or even from a fellow employee.  The numbers of these lawsuits are growing year by year as are the sizes of the judgments against the employers.  Still, many restaurants don’t purchase EPLI protection either because they don’t know about it or because they don’t truly understand the risks that they face by going bare. 

In last week’s blog I discussed a new reason that restaurant employers should consider buying this insurance policy.  That is that some of these policies can provide protection for claims of discrimination against the restaurant that are filed by customers.  This week I want to point out yet another good reason to seriously consider adding an EPLI policy to your insurance quiver.

Some EPLI policies include a powerful loss control component.  They provide this in the form of a human relations advisory service at the other end of a toll free number.  Imagine being able to phone the insurance company to speak to a human relations expert who can take as much time as you need to answer your questions and give you advice about safe hiring practices, how to prepare for dismissal of an employee and how to set up systems in your restaurant that help protect you from third party claims caused by your managers or other employees.  These insurance companies know that a majority of EPLI claims happen because the restaurant owner is not clear on what should and shouldn’t be done with hiring and firing procedures as well as day to day management in order to avoid an employment practices liability claim.   Folks this is like have an HR department in your pocket for no extra charge on your EPLI policy.  These EPLI underwriters recognize that often one of the most costly features of an employment practices liability claim is the legal costs and the costs in time to the restaurant owner.  Avoiding these types of claims in the first place is well worth the price of admission.  The fact that the policies also provide a coverage limit to pay the claim if all else fails is really just icing on the cake.

With all that you have to do day to day to keep your restaurant running smoothly, you probably don’t have time to become a human relations legal expert at the same time.  But, if you purchase the correct EPLI policy, then you can access the expert help that the insurance company will provide to you to help prevent a claim from happening in the first place.  With the insurance company now on the hook for paying out claims and legal costs, you have them working harder than even you might work to try and prevent any claims from happening in the first place.  And preventing a claim is far easier than fighting one.

Clinard Insurance Group insures hundreds of restaurants all across North Carolina, South Carolina, Georgia, Tennessee and Virginia.  We feel strongly that every business that has employees needs to purchase employment practices liability insurance.  If you would like help with your employment practices liability insurance, or with your restaurant insurance, please call us, toll free, at 877-687-7557 or visit us on the web at


Restaurants Beware – Are You Discriminating Against Your Customers?

As if restaurant owners don’t have enough to worry about, now comes a brand new risk exposure; discrimination against your customers.  And to make matters worse, this exposure is excluded by your standard restaurant businessowners insurance policy.  But there is a way to handle this risk and a few others at the same time.

Let’s start with a few cases.  Recently a Korean immigrant sued a Hooters restaurant in Queens for racial discrimination.  This was after he found the slur “Chinx” handwritten on his receipt for a takeout order.  The hostess who admitted writing the slur on the receipt has been fired but the suit goes on.  Named in the suit are Hooters of America, the owners of the Queens franchise and two workers.  Now we both know that the workers are not the deep pockets here so it will come down to Hooters of America and the franchise owners.  My guess is these franchise owners probably had never given a minute’s thought to worrying about being sued for discrimination against clients so they probably had no clue about how to insure for it either.

In another case in Georgia, a church bus from a predominately African American church pulled into a Waffle House parking lot hoping to get everyone fed before getting back on the road.  The Waffle House was not large enough to accommodate them all at once and this angered the bus riders who later sued that Waffle House for racial discrimination.  While the facts of this case and the final outcome of the suit are not completely clear to me, it is clear that the exposure is out there just waiting for an opportunity to bite a restaurant owner in the rear end.

As I mentioned earlier, this kind of risk exposure is not covered by your restaurant insurance package policy.  But there is a way to insure your restaurant against this risk.  What I am talking about here is an Employment Practices Liability Insurance policy, often referred to as EPLI.  Not every EPLI policy will offer coverage for discrimination against clients but some do.  Most restaurant owners typically purchase EPLI to protect against a lawsuit brought about as a result of some kind of discrimination in their employment practices.  But there are a few EPLI policies that also include coverage for discrimination against clients.   For those of you running your restaurants with no EPLI at all, this is just one more reason to seriously consider adding this coverage to your quiver of insurance policies.

Here at Clinard Insurance Group we insure hundreds of restaurants all across North Carolina, South Carolina, Georgia, Tennessee and Virginia.  We advise all of our commercial insurance clients who have employees to purchase an EPLI policy.  Restaurants are particularly vulnerable if left without this protection.  If your agent hasn’t offered EPLI to you as a protection option, then you should seriously consider firing him and looking for a new agent.  If you would like help with your restaurant insurance questions or policies, please call us, toll free, at 877-687-7557 or visit us on the web at


Outside The Box Risk Management Problem Sovling For Restaurants

While most of my restaurant insurance blog articles cover topics where insurance is the primary risk management tool, in this article I want to talk a little bit about thinking outside of the box in terms of risk management for your restaurant.

Restaurant insurance is the best place to start when a restaurant owner is trying to work through protecting his or her restaurant from risk exposures out there that can cost money and time.  And insurance is great for those types of risks that could wipe out your restaurant overnight like fire and explosion and food contamination.  But there are a myriad of other, smaller risks out there that may or may not be insurable.  For those kinds of risk exposures a restaurant owner must be more creative.

Here’s a story of a real life, outside the box, kind of creative risk management approach that was used when insurance was not a viable choice.  When Neil Armstrong was preparing for his mission to the moon he knew that there was a pretty sizeable chance that he wouldn’t return safely.  With this in mind he set out to protect his family’s financial health should he perish on that trip.  He quickly found out that life insurance was not going to be an option.  The life insurance companies really didn’t have any data to go on to measure the risk and so the rates that they would have to charge Mr. Armstrong were so high as to make life insurance an unaffordable option.

What Neil Armstrong and the other astronauts on that mission did next was a great example of outside of the box risk management thinking.  They decided that if they didn’t come back, that they needed something that their families could sell to put them on firm financial ground.  They decided that their autographs would serve that purpose perfectly.  They then sat down and signed hundreds and hundreds of envelopes and stamped them.   On the day that they blasted off for the moon, a friend took these envelopes by the post office and had the stamps canceled and thus date stamped each envelope.  If they didn’t return from their mission, then their families could sell these autographs to raise money.

We all know that the moon landing mission was a great success and that all the astronauts did return safely to their families.  But over time, some of these autographed envelopes have made their way into the marketplace.  Recently one sold on ebay for over $30,000!  This validates that these clever astronauts had found a way to reduce the risk of financial misery for their families with their plan.

I know this story doesn’t give you any concrete solutions for the risks that you face in your restaurant every day.  But what it does do is give you an example of how looking at a risk exposure from a completely different perspective may help you find a solution that suits you.  When doing this, always question all of your assumptions first.  Anything that you are automatically assuming to be true and constant needs to be carefully evaluated.  I have found that solutions often present themselves when you challenge your own assumptions.

If you would like help with out of the box risk management thinking, or if you would like help with your restaurant insurance policies, I hope you will call us.  We insure hundreds of restaurants in 5 different states and we would love to help you make sure that your restaurant insurance is exactly what you want and found at a price that will surprise you in a pleasant way.  Call us, toll free, at 877-687-7557 or visit our restaurant insurance web page at


Restaurant Customer Acquisition Versus Loyalty – The Rules Are Changing

Today’s blog will be aimed at marketing and developing customer loyalty: a new direction from my usual restaurant insurance and restaurant risk assessment type of blog.  With the huge number of discount deals for anonymous buyers out there, I think we are about to see a sea change in social and digital marketing for restaurants and I thought it might be helpful to discuss these trending changes and how they might affect the smaller, one or two location restaurant in the future.

If you think of attracting and engaging your customers as the journey, then the ultimate destination is customer loyalty.  It’s not so hard to get new customers to show up and enjoy your restaurant at a discount rate below what is profitable to you, but ultimately your goal is to have them become loyal customers who visit your restaurant and happily pay the full price for this experience.  And the best way to develop loyalty over time is through deeper engagement with your clients.

What we will probably see over the next few years is a moving away from daily deals and coupon sites like Groupon and into the true customer retention business.  While these daily deals sites do generate a lot of buzz, if this is all that you focus on you will never get to the ultimate goal of customer loyalty and you will probably make less money over time as well.

To generate more customer loyalty, your restaurant should recognize customers at all touch points.  A recent poll indicates that 78% of respondents believe that having a great customer experience is what makes them loyal.  So you should be focusing on making every touch point with a customer or a prospective customer, a quality customer experience.  Go back and study your marketing plan and make sure that every touch point in the process is delivering a high quality experience. 

Right now social networking is generating lots of data.  But most of the real time data that is being gleaned is pretty unstructured.  Marketers are even now struggling to find ways to mine this data in useful ways.  It’s a pretty good bet that the guys with the most money, read as franchise restaurants, will figure this out first.  Watch what they do and learn.  Right now very few businesses are finding effective ways to gain intelligence from social data.  But you may be able to learn a lot from what you are collecting in your restaurant.  Are you using report cards?  Do you have a way for feedback, both negative and positive to reach your ears so that you can fashion ways to take advantage of this information?    If you are using a loyalty program of some sort, are you reviewing the data and trying to find ways to gain intelligence from this information?

Be prepared for mobile coupons to go mainstream.  With this happening, there will be more pressure to participate and this will drive down your return on the average customer.  You must find ways to turn their experience from a strictly money saving adventure into an experience that will have them return and pay full price.  Over time you may want to offer cost savings to your repeat customers at a price that lets you make money and build loyalty instead of focusing on offering great deals to one time anonymous customers who never return.

Another trend that will take off by the latter half of this decade will be mobile digital wallets.  It is estimated that by 2016 most customers will be able to leave their leather wallets and home and pay for everything with their phones.  Are you prepared for this change in technology?  You should study this now and get ahead of this curve from the start.

Last of all, don’t forget the worthy cause approach.  94% of those polled said that they would switch from their brand to a similar one of approximately equal value if it backed a social issue that they believed in.  This is an example of finding out and knowing what the majority of your clients care about, then taking action to inform them that you are supporting that cause.  Social networking data mining is how you will know what to support and how to tell your customers about it.

At Clinard Insurance Group we work hard to retain our customers.  We think our restaurant clients would do well to begin making the switch from customer acquisition to customer loyalty.  All the signs point to this being the time to begin to change your marketing mind set.  If you should need any help at all with your restaurant insurance, please call our office, toll free, at 877-687-7557.  We look forward to serving you and providing you with an unequaled customer experience.


Food Contamination Insurance – What You Don’t Know Could Hurt You

The idea of a food borne illness outbreak in your restaurant should be one that strikes fear into your heart.  Your reputation could be ruined; your very business destroyed.  And this risk exists even if you take every precaution and an outbreak is tied to your restaurant even if you weren’t involved.  A name brand tie in could ruin your business.  We’ve seen that the public reaction to food borne illness contaminations in restaurants is swift and severe.  So do you have food contamination insurance?  If so, do you understand exactly how it works and what is and isn’t covered? 

Should your restaurant be hit with a food borne illness crisis, then you are going to find out just how many ways there are to lose money with this kind of loss.  The most obvious is that you have to attend to the medical costs of your patron who has become ill from eating your product.  You may have to inoculate employees and other customers.  You will probably have to throw out inventory and spend time and effort trying to locate the source of the pathogens in the first place.  But all of these costs will pale in comparison to the costs of trying to protect and restore your restaurant’s reputation so that you can continue to draw clients in to your eating establishment.

When buying food contamination insurance protection for your restaurant, there are many issues that you need to discuss with your agent.  For instance, if your restaurant is part of a chain of restaurants with the same trade name, then you should make sure that you have insurance coverage that will be triggered if one of the other restaurants experiences a food borne illness loss, so that you can collect the insurance money that you need to spend to defend and protect your restaurant’s reputation.

You should also be sure that your coverage includes crisis management services as part of the protection.  Then you should test the knowledge and experience of the crisis management teams.  Have them walk you through a typical food borne illness crisis scenario so that you understand what they can and can’t do for you in that kind of emergency.  If possible, have the crisis management team look at your current operations to help you find areas where you may be vulnerable to contaminants or pathogens.  If you can stop a contamination claim before it happens you will be much better off, no matter how extensive your insurance protection is.

Sit down with your agent and discuss the food borne illness coverage on your policy.  Be wary of add on, one size fits all food service endorsements.  These endorsements typically add a lot of different coverages that restaurants may need but if you don’t read the fine print you may not know just how limited these add-on protections are.  For instance they may require that the restaurant be closed before the coverage is triggered or they may only respond to food spoilage caused by power outages.

Food borne illnesses caused by eating restaurant food can often be the death knell for the unfortunate restaurant where the loss occurs.  Often the demise of the restaurant itself could have been avoided had the restaurant owner taken the time and care to make sure that he or she had purchased appropriate food contamination insurance protection before the loss.  Don’t make this mistake yourself.  Block out some time with your insurance agent to go over this risk exposure carefully before this type of loss hits your restaurant.

Clinard Insurance Group insures hundreds of restaurants all across North Carolina, South Carolina, Georgia, Tennessee and Virginia.  If you would like help with your restaurant insurance questions, please call us, toll free, at 877-687-7557 or visit us on line at