Terry's Restaurant Insurance Blog


Food Borne Illnesses Remain Stubborn Foes According to Federal Study

Food- borne illness.  These are words sure to strike fear in the heart of any restaurant owner.  The implications for your restaurant and your customers are frightening.  The costs to repair your reputation, as well as to compensate your client for damages could be enormous.  As an insurance agent who has owned 4 restaurants in the past, I still feel queasy at the thought.  So the results of the most recent CDC study regarding the most common food-borne illnesses in NC should give every restaurant owner pause.

The most recent CDC figures show that the rates of infections linked to 4 of the 5 main pathogens that they track went up or remained steady between 2007 and 2011.  The four pathogens with the increased infection rates were salmonella, vibrio, campylobacter, and listeria.  The only pathogen to be tied to a reduced rate of illnesses was a strain of E. coli.

The data from this study was based on infections diagnosed by 10 different state laboratories.  These laboratories cover a geographic region that includes about 15% of the U.S. population. 

These results have outraged consumer advocates who, along with other industry groups have pushed hard for passage of the Food Safety Modernization Act.  This act empowers the Food and Drug Administration to prevent food-borne illnesses instead of simply reacting to them after they occur.  This legislation was signed into law by the Obama administration in January 2011 after a string of food-borne illness outbreaks shook the nation’s consumer confidence.  That said, the Obama administration has not met the deadlines for drafting rules that are needed to implement key provisions of this law.  In particular the law demands that food imported into this country meet the same safety standards as food produced domestically.  Once again reaction to a crisis has outrun the lawmakers’ ability to craft the rules for the law.  I’m willing to bet that there is some lobby negotiating being done here to protect a powerful interest or two that is slowing down the process.

So where does your restaurant insurance policy stand with regard to food contamination coverage?  Do you know for sure?  Often this coverage is added to a restaurant insurance package policy along with a host of other protections that you may or may not need.  Few restaurant owners take the time to read the key provisions of these add on coverages.  These provisions can address what might trigger the coverage in the first place, how much money the policy will provide, exactly what types of contamination are covered and not covered and a whole host of other issues.  To read my blog on food contamination coverage for more help evaluating your own coverage, please click here.

At Clinard Insurance Group, we are the insurance agent for hundreds of restaurants located in North Carolina, South Carolina, Tennessee and Georgia.   Our experience and high volume of restaurant accounts means that we can offer restaurant owners high quality advice and guidance while reducing their insurance costs for their restaurant insurance.  If you would like help with your restaurant insurance, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at


Disaster Recovery Planning – Your Restaurant’s Very Existence Could Hang In The Balance

Running a restaurant is a very time consuming affair.  With so many demands coming at you all day long, there is little time for planning and preparing for something that might never happen.  But the many disasters of 2011 should be a wakeup call for restaurants that have done no disaster planning at all.  This blog will give you a checklist of some of the things that you may want to consider and plan for to make sure that your restaurant is one of the few that can emerge from a disaster and continue to operate successfully in the post disaster time frame.

Last year a number of catastrophes hit US businesses.  These disasters resulted in more than $32 billion in insurance claims and the majority of that money went to insured businesses.  And this doesn’t include the smaller one of a kind disasters that struck businesses, like fires and data breach.  Nor does this include the amount of losses that were not insured.  Disasters do more than cause property damage – they can disrupt your restaurant’s operations and can cause a lot of bleeding to translate down to your bottom line as well as causing damage to your restaurant’s reputation.

A recent survey commissioned by The Hanover Insurance Group reported that 63% of businesses surveyed said it was not very likely or not at all likely that their business would experience a disaster such as a flood, hurricane, tornado or any other incident that could cause a loss or interruption to their operations.  So it does not come as any surprise that only 41% of the surveyed businesses had a written disaster plan in place.  In fact, I’m surprised that the number of advance planners is that high at all.

If you can take an hour or two to dedicate to creating a written disaster plan for your restaurant, then here are a few things you want to spend time thinking about.  First of all you should try and anticipate all of the types of events or threats that your business could face, including fire, tornadoes, hurricanes, ice storms, floods, data breach and vandalism.  Next carefully assess all of your restaurant’s assets, including the building, the contents inside, your inventory, your data, and other intangibles like your reputation, both online and off.  Review the protections that you already have in place against potential threats.   By this I mean not just your insurance policies but also your procedures such as how to evacuate employees and patrons in the event of a fire.  This also means carefully checking your sprinkler systems, ansul system, your fire extinguishers and emergency lighting.  Last of all, try to imagine your restaurant after the disaster strikes.  What are the areas of potential impact on your restaurant’s operations from suppliers to replace inventory to lost employees as well as any financial or legal impacts of the disaster.

Here is a list of ten key items that merit your attention so that your restaurant has a better chance of rising from the ashes of a disaster to return to profitability once again.  These items should be carefully considered and a disaster recovery plan put in writing and kept in a safe place, off premises, ready for you if you ever need it. 

  1.  Get an overview of all of your restaurant assets and potential threats to your business.
  2. Develop a list of all key employees and their job functions and then create a list of backups for each job function in case one or more employees is not available after the disaster.
  3. Develop a list of any employees who can function in some capacity that is helpful and who are able to perform their role from a remote location.
  4. Store critical paperwork in a safe place.  This could be legal documents, banking information and employee information.
  5. Build a list of key external contacts from vendors and suppliers to attorneys and other consultants.
  6. Plan for the replacement of any equipment from kitchen equipment to computers and point of sale equipment and understand just how long it will take to find and replace what is needed and get it up and running.
  7. Back up digital data.  You are probably already doing this but you need a plan to create a regular back up of data to a remote location, be it in the cloud or by moving a backup copy off premises on a regularly scheduled basis.
  8. Have a plan ready for moving and setting up in an alternate site if your restaurant is destroyed beyond the hope of a rebuild.  Zoning rules can change after some types of disasters and you might not be allowed to reopen your restaurant in the same location so you should have a plan in mind for where you can reopen most quickly and with the best long term results.
  9. Create a step by step communication plan, first for employees, then later for your customers.  Detail how the crisis team will be notified and how you will communicate information to your employees.
  10. Sketch out a step by step recovery plan.  This should be a clear outline of what to do first, second and third and in what order as well as an estimation of the costs of each step of the recovery.

It is important for restaurants to be prepared and ready before a disaster strikes.  Insurance is a very important component of this process but insurance alone can guarantee that your restaurant can recover from a disaster.  You should find the time to build and create a disaster plan and then, review it at least once a year to update it as needed.  If you would like to discuss a disaster plan process for your restaurant, or if you would like help with your restaurant insurance program, I hope you will call us, toll free, at 877-687-7557, or visit us online at


Restaurant Insurance – The Phantom Liquor Liability Protection

Most restaurant owners, if they serve alcohol, have a general idea that they need some protection from patrons who may drink in their restaurant and cause an accident later.  And even if you think you would never serve someone who is already drunk, bear in mind the sad tale of one of my clients who last served a client around 8 pm, and after that client had visited a few other bars, then wrecked his car and killed a young girl at 2 a.m., was stuck with over $600,000 worth of damages after the lawsuits were all settled.  In his case, he had the right protection in place and is still in business today.   Liquor liability is truly a must buy policy for any restaurant that serves any alcohol at all.  But recently I encountered what I call the phantom liquor coverage.  This is a simple case of a restaurant owner not clearly understanding the wording on his policy but it may well be a cautionary tale for many restaurant owners.

This story begins when a restaurant owner called me for a quote on his restaurant insurance.  He was responding to one of our marketing postcards.  In the course of the conversation, as I was collecting data about the policies that he currently had in force, I asked him if he carried any liquor liability coverage.  He responded that liquor liability coverage was already included in his restaurant package policy.  Now this is not uncommon, many restaurant package policies allow you to add liquor liability coverage as an add-on endorsement to the policy.  But when this happens, the liquor liability protection will have its own additional coverage forms, limits of liability and line item premium charges.

As I dug a bit deeper to find out more about his liquor liability coverage it eventually became clear to me that his reading of his general liability classification was leading him to believe that he had liquor coverage where none really existed.    General liability insurance is the coverage for premises liability (slip and fall claims on your premises etc) and products liability (someone breaks a tooth on a bone in a meatloaf) and is an integral part of the basic restaurant insurance package, sometimes called a businessowners policy.  But general liability coverage excludes any losses related to the sales of alcohol, and this is why restaurants must also purchase liquor liability coverage, whether as a separate policy or as an add-on endorsement to their package policy.  The general liability section of your policy will have a classification code and description listed.  These class codes allow the insurance companies to develop different general liability rates for the different types of restaurant out there.  There are dozens of class codes that are used for restaurants.  My caller’s confusion stemmed from the wording of these classification listings.  Almost all of them mention alcohol, even though liquor liability is not covered by any of them.  For instance your policy may show your general liability classification as – Restaurants with sales of alchohol less than 30%, or Restaurants with sales of alcohol over 75% with no dance floor.   A restaurant owner, reading this classification, might mistakenly believe that this provides coverage for liquor liability.  That was certainly the case with the restaurant owner who called me.

In the case of my caller, I was unable to convince him that he did not have any liquor liability protection based on what he was telling me over the phone.  I urged him to call his agent before he forgets about it to double check his coverage.  Now to take this confusion a step further, what if your agent only insures a couple of restaurants and really doesn’t have the experience himself to understand this nuance?  Can you see clearly now just how important is it for you to make sure that you find an agent with vast experience insuring restaurants like yours?  And the good news is that when you choose to buy from an agent that already insures a lot of restaurants, you will probably also save money as his volume of business with his underwriters allows him to obtain the best pricing for you.

At Clinard Insurance Group, we insure hundreds of restaurants all across North Carolina, South Carolina, Georgia, Tennessee and Virginia.  We would love to help answer your questions about your restaurant insurance.  Please feel free to call us, toll free, at 877-687-7557 or visit our restaurant insurance page at  I don’t want for you to wait until you have a large claim staring you down before you fully understand the coverage and protection that you have on your restaurant.


The Best Of Everything – Except When It Comes To My Restaurant Insurance Please

At a recent meeting of the NC Restaurant Owners Association I asked a number of restaurant owner what was the most important factor when it came to choosing their restaurant insurance.  Every single one of them said just one thing matters and that is price.  This is a common approach to buying restaurant insurance but in truth, when you look at it rationally it doesn’t make any sense at all.  I have to assume that trying to boil different insurance proposals down to price is really just a shortcut to save time and effort.   But this kind of decision making shortcut could be doing you and your restaurant a great disservice.

The main reason that restaurant owners will buy restaurant insurance policies based on price alone is that they mistakenly believe that all restaurant insurance policies are the same.  Nothing could be further from the truth.  Even if you ignore the plain truth that most restaurant policies can be tailored in so many ways that no two are exactly alike, you also have the complicating fact that no two restaurants themselves are exactly alike.  What this means for you is that you need the help of a professional to construct the coverage that you need to tailor your policy to fit your restaurant.  You wouldn’t simply go to a shoe store and say that you need a pair of shoes and you want the least expensive one regardless of style, color or size.  The same should be true of restaurant insurance.

Restaurant owners also make the mistake of assuming that since insurance expense is usually such a small item on their expense sheet that it doesn’t merit a lot of time and effort.  This too leads to commoditization of the insurance policy in the owner’s mind, leaving only price as a variable.    But this approach is really more lazy than reliable.    If your restaurant insurance is a very small item on your expense sheet, then saving 10% there will not generate nearly as much profit as cutting your food cost by 10%.  So now we are talking about an expense item where price sensitivity is actually not very critical to your bottom line.  And given that poor insurance choices could cost you a huge amount of time and money if you are facing an uninsured claim, then worrying about price over protection here really feels like a case of the tail wagging the dog.

Beyond just the coverage and the price of your restaurant insurance, are the issues of the agent and the company that purchase from.  Of course you need to trust your agent’s judgment and be able rely on his or her advice and help to get your coverage written correctly in the first place.  But there are a few other issues that are more subtle but in the event of a claim could make a huge difference in the time and money you spend after a loss occurs.  You should ask about the insurance company’s ability to pay claims and remain solvent both now and in the future.   What is the insurance company’s willingness to pay claims promptly and without litigation?  And what role will your agent play in the process?  Will he or she be an order taker or more of an ongoing advisor to you and your restaurant?

Clinard Insurance Group is a niche player in the restaurant insurance marketplace.  We insure hundreds of restaurants all across the 5 states of North Carolina, South Carolina, Tennessee, Georgia and Virginia.  We would be happy to share our experience and expertise with you, helping you find the insurance program that solves your risk problems and fits well within your budget.  Give us a call today at 877-687-7557 or visit us on the web at


Work Comp Bill Clears The Senate – How Will These Changes Affect Your Restaurant?

A bill that makes some dramatic changes to the NC workers compensation insurance benefits has moved on from the Senate and is now on the Governor’s desk awaiting her signature.  I feel that for the most part, this bill will likely reduce the cost of workers compensation insurance for most restaurant owners as the general direction of these changes is to reduce the benefits that will be paid out to injured workers.  But these changes do cut in both directions so the overall impact on restaurant owners will best be understood after it becomes law, which I assume it will.

This bill was possible due to the Republican controlled legislature that is the state of things at this time in NC.  The business friendly republicans have forced the lawyers and the labor unions to give some ground.  But you will see a few compromises in the changes that are being made.

Start first with the changes to the disability payments due an injured worker.  This is a huge part of the workers compensation cost puzzle so any reduction here should filter its way down to slightly lower rates for restaurant owners in coming years.  This new bill will cap disability benefits at 500 weeks.  For insurance companies this cap will allow them to better plan their loss costs.  This will bring NC in line with our neighboring states, Virginia and South Carolina, both of which have 500 week caps.  Tennessee and Georgia both have caps of 400 weeks in their disability benefits for injured workers.  There will be exceptions for the most severely injured workers such as the loss of both hands or for paralysis.  These disabled workers will be able to qualify for extended compensation if they can prove that they have sustained a total loss of wage earning capacity.   This change in benefits should certainly help keep rates lower for most restaurant owners in the long term. 

Now let’s take a look at the changes that may increase benefits and perhaps produce some upward pressure on the rates that you pay.  The new bill will extend disability benefits to workers who are physically unable to continue the work that they were doing before they were injured and who have had to take a new job at lower pay.  The bill will extend their benefits by allowing them to receive two thirds of the difference between their old pay and their new pay and do so now for up to 500 weeks.  Previously this benefit only ran for 300 weeks.  The bill also increases the benefits for dependents of a worker who is killed on the job or who dies from an occupational disease, from 400 to 500 weeks.  In addition the burial expenses benefit for workers killed on the job will be increased from $3500 to $10,000.

A perhaps more disturbing change – depending on which side of the privacy issue you fall on, might be the changes in employer’s access to the injured employees’ medical records.  The employer may now be able to speak to the employee’s physician, but only after giving the employee notice.  The employee has a right to sit in on that meeting though.  It remains to be seen if and how this may be abused by dishonest employers.

So what did the bill fail to do?  Well I think they missed an opportunity to change the law that says those with less than 3 employees are not required to purchase and insurance policy for their employees.  This rule makes little sense to me since an uninsured employer is still required to pay the claims themselves from their own pockets.  But of course these small employers rarely have the financial assets needed to pay the claims that they owe to their more severely injured employees.  These injured or disabled people then become wards of the state and we all must pay for them.  I can’t see any justification for keeping this rule in force when so many injured and maimed workers are now carrying around worthless judgments against their former employers.  The bill should also have tackled the area of enforcement of the workers compensation policy buying rules.  Our industrial commission needs to begin enforcing the laws regarding required workers compensation insurance for employers.  We cannot continue to force the rule followers to pay for those who break the law.

If you would like help with your restaurant insurance, please call us, toll free, at 877-687-7557.  Clinard Insurance Group insures more than 100 restaurants and would love to help you with your restaurant insurance questions.