Many restaurant owners don’t really give much consideration to how much liability insurance to purchase when they first open their restaurant.  After all, they are pretty busy with a lot of other details relating to their grand opening.  And by the time their restaurant insurance policy comes up for renewal the next year, the liability limit question is usually not revisited, at that point in time they are usually just checking the renewal prices against the previous policy and making assumptions that nothing much has changed over the past year.  I would encourage every restaurant owner to take some time to review the liability limits on their restaurant insurance policies and not just accept that coverage is coverage here.

Most restaurants purchase a businessowners policy for their basic protection and most of these policy forms have maximum liability limits of $1,000,000, though some companies can offer liability insurance limits as high at $2 million.  If you want liability limits above the maximum allowed by the businessowners policy, then you can accomplish this by purchasing a commercial umbrella policy.  Commercial umbrella insurance policies can add an additional layer of liability protection over and above all of your liability insurance policies, such as your commercial auto insurance policy and your workers compensation insurance policy.  They might even be able to include your employment practices liability insurance as an underlying policy.  This last policy form can often be problematic syncing up with your umbrella policy so you should seek help from an experienced restaurant insurance agent when trying to do this.

But more to the point, how much liability insurance is enough?  The question of course is nearly impossible to answer.  Liability exposure is by its very nature an unknown.  Until the loss actually happens there is no way for you to predict how much you stand to lose.  There are so many variables, not the least of which is the changing nature of litigation in your area and past jury awards.  So the only answer that I can give you is to purchase as high of a liability insurance limit as you can afford to buy.

A recent liability claim and court case in Vista California can give you some idea of the risks and the numbers that you might encounter.  In March 2008 a chiropractor named Anthony Zaccaglin was visiting a Starbucks when he slipped on a newly mopped area of the floor and hit his head.  The store manager claimed that she had put out 3 cones to warn customers of the slippery area but several witnesses to the event testified that they saw only one cone.  Zaccaglin hit his head on the hard floor and suffered a concussion that required more than a year of brain-injury therapy and kept him from returning to work.  The Superior Court ordered Starbucks to pay Zaccaglin and his family $7.5 million for this slip and fall accident.

Perhaps Starbucks is perceived as having deeper pockets than your restaurant.  Or perhaps not.  At any rate, this case can give you some indication of what can happen in a simple slip and fall case.  Would a judgment of $7.5 million outstrip your insurance limits?  Would this put you out of business and into bankruptcy?  Is it worth the risk?   These are all questions that each restaurant owner needs to decide on his or her own.  But you don’t have to go it alone.  Restaurant owners should take a little time to find an insurance agent who understands restaurant insurance and who already insures many of them.  This kind of specialized experience should help you to obtain lower costs and get better help and advice at the same time.  If you would like to put our restaurant insurance experience to work for you, call us today, toll free, at 877-687-7557.

In my last blog I discussed how the EEOC is changing a lot of their rules to make the Americans With Disabilities Act tougher on employers and to reduce some of the watering down impacts of court decisions regarding this now 20 year old law.  In this blog I want to point out some strategies, beyond just purchasing an Employment Practices Liability Insurance policy, that you can implement in your restaurant to reduce your chances of getting in trouble with the EEOC over these changes.  Of course this blog is just an overview and you should consult your attorney for specific details on how to protect yourself from the power of the EEOC rules.  

One of the first things you want to do is to find a way to keep a pulse on the EEOC enforcement efforts.  You should bookmark the websites for your local department of labor along with the EEOC and federal Department of Labor to keep track of which kinds of things they are cracking down on so that you can be sure you avoid risk of penalties.  Next take a moment to audit your own personnel policies to make sure that you are in compliance with the new EEOC regulations.

You should also be sure that you fully understand and account for leave-of-absence entitlements that are created by law.  State and local governments have been aggressively expanding these entitlements and you want to be sure that you understand the tripwires for these rules so that you are in position to follow them when required.

Consider revisiting your procedures and approaches to request for reasonable accommodations as this area of the new rules places a much larger burden on you to accommodate those with special needs.  You may need to provide a private space for your workers to administer medicines for example and you need to have a clear pathway for these accommodation requests to be presented to you by your employees.

Wage and hour litigation is still the number one source of employment related lawsuits.  For this reason you should take a close look at your payroll policies and procedures to make sure that you are in compliance with the new rules as well as the case law developments in this area.

Make sure that you have a comprehensive social media policy in place.  You want to be sure that your policies give your company the discretion to protect your rights and to discipline employees if needed for breaking the social media rules.

Last of all, take care to put in place a preventive program for retaliation in the workplace.  Statistically speaking retaliation claims are on the rise.  Retaliation can take your company’s position on a claim from one that can be defended legally to one with no defense.  This can leave your restaurant vulnerable to huge fines and settlements.

It’s clear that with all of these changes and the patchwork nature of the multiple governmental organizations that can regulate your employment practices, that keeping up with all of the changes is more and more difficult all the time.  If you don’t have an employment practices liability insurance policy in place, please call us right away to do so.  The risks are just too high and the exposure is growing rapidly in our current regulatory environment.

The Americans with Disabilities Act is over 20 years old now but some of the changes to that law that went into effect in January 2009 are now starting to have an impact on insurance policies and rates.  Restaurant owners are very vulnerable to claims by employees against them under the ADA and so if you own a restaurant or are thinking of starting one, you should pay particular attention to this law and the recent changes that broaden its scope.

Let’s start with a few rules and clarifications.  The ADA will apply to you and your relationship with your employees if you have 15 or more employees, either full time or part time.  If you have multiple locations for your restaurants, then you have to count all employees at all locations unless you have set up each location under a different business entity.  Also, your general liability insurance will provide you with very little help protecting you from an ADA lawsuit by one of your employees.  The policy that you need for this type of protection is called an Employment Practices Liability Insurance policy or EPLI for short.  In my experience most restaurants do not buy this policy and in fact every single one of them with employees needs one.  This is an area of ignorance that can and does wipe out restaurants from time to time.  Don’t leave your business unprotected here.

The Equal Employment Opportunity Commission or EEOC for short, has been charged with revising its regulations to restore the original intent of the ADA to address the narrow view of the law that the courts have taken over the years.  These regulations went into effect in May of 2011.  These new regulations will certainly increase the number of claims filed against employers.  These claims already jumped 17% in 2010 over 2009 and they will increase even more with these new regulations.  The new regulations interpret a disability so broadly now that several defense attorneys have blogged that under this new definition, almost every American can be categorized as having a disability of some type.  This creates a new, much riskier world for restaurant owners and you simply must protect yourself.

Let’s look at an example.  Let’s say you have an employee with diabetes.  Now, you aren’t allowed to ask how long they have had it or how long they have been taking medications for it, even if these questions would seem to flow in the normal course of a conversation with your employee.  But now, you are also required to provide reasonable accommodations for this disability.  You must provide a place where they can test their blood sugar, you must allow them a break to take medications and you may even be required to provide them with a break time to rest.  There are just so many variables that it will be difficult for any employer to cover all of the bases here, even with a full time human relations staff.  And most restaurant owners don’t have an HR staff.

So how do you protect yourself from an employee driven lawsuit under the ADA?  First of all you need to understand the rules and the risks.  You must educate yourself and your managers on what they can and cannot ask or say to an employee.  You will also want to engage in the interactive process of deciding what steps if any are needed to provide reasonable accommodation for the disability.

If all of this sounds overwhelming, then you are not alone.  And you don’t have to be.  Take the time to understand and then to invest in an EPLI insurance policy.  While EPLI can’t protect you from the cost of remodeling to take care of the physical accommodation changes that may be required in your case, it can protect you from the legal costs of defending a lawsuit as well as the settlement costs of losing one.

Clinard Insurance Group insures hundreds of restaurants, all across North Carolina and South Carolina and we advise all of our restaurant insurance clients to invest in Employment Practices Liability Insurance.  If you have any questions about your restaurant insurance, please call us, toll free,  at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.

Restaurant owners who own their building, or who are responsible for insuring their restaurant building should have a plan to protect them from the weight of snow on their roof.  Wet, heavy snow can build up on the roof and has the potential to collapse the entire structure.  If your restaurant were to collapse, what would this mean for your bottom line that year?  Would your restaurant survive?

For those of you in climates with very little snow, this is not a burden you face.  But if heavy snowfall can occur in your area, and particularly if that snowfall can be wet, heavy snow, then you should take a moment to review your vulnerability to this exposure and make a plan in advance for protecting your restaurant business.   One foot of dry snow weighs about three to five pounds per square foot while the same foot of wet snow can weigh up to 25 pounds per square foot.

In truth, any roof is vulnerable to collapse under the weight of ice and snow, but some roofs are more vulnerable than others.  Saw tooth rooflines are particularly at risk as the snow can build up between the tooth sections.  Also at risk are roofs with deep valleys as the snow from the areas around the valleys can slide down into and build up in the valleys.  Also vulnerable are bow string roof configurations as well as large area buildings with flat roofs.  You can also perform your own pre-inspection to see if your building is vulnerable.  You should look for any sagging steel, splitting wood frame supports or sprinkler heads that are forced down below the ceiling tiles.   Other clues could be windows and doors that are difficult to open or close and curving or bowing utility pipes or electrical conduit near the ceiling.

 If you think that your building is vulnerable to a snow weight collapse, then I would suggest that you establish a relationship with a rooftop snow removal company before the winter season starts in earnest.  Once the snow has begun to fall, it may be too late to find help.  This is not a do it yourself kind of project.  These professional snow removal companies have a careful system to remove snow in a way that does not damage your roof.  The science behind this work is to remove the snow from the weakest part of the roof first and to use specialize equipment that will not damage your roof.

And what about your restaurant insurance protection?  Where does your policy stand on a loss from a collapsed roof?  Well, most restaurant package policies and business owners policies will provide this coverage if you have insured the building on the policy.  You will probably also experience a loss to some of the business personal property and you will experience a loss of income.  All of these exposures can be covered by your restaurant insurance policy as long as you set up correctly in the first place to handle this kind of loss.  Check with your agent if you think your building is vulnerable to a weight of snow collapse.

If you would like help with your restaurant insurance program, or if you have questions about restaurant insurance, please feel free to call us, toll free, at 877-687-7557.  Clinard Insurance Group insures hundreds of restaurants all across North Carolina and South Carolina and we look forward to helping you insure your NC or SC restaurant.