Most restaurant owners set up their restaurant insurance program by starting with the basics – a business owners policy for the property and liability protection and a workers compensation insurance policy for their employees.  Sometimes, when the owner of the restaurant buys a company car, then the business auto insurance policy is added to the restaurant insurance program.  It doesn’t matter if you have a business auto policy or not, as a restaurant owner, you need to pay close attention to hired and nonowned auto liability protection.  Overlooking this minor detail could cost you  your business.

Let’s start with an explanation of these terms and the exposures they represent.  Hired and nonowned auto liability simply refers to the liability exposures that your restaurant faces due to the use of vehicles that you either hire or simply don’t own.  At first blush this may seem silly.  You might say, I don’t ever rent cars for my restaurant and how can I be liable for a car I don’t own.   I will grant you the first point, that you may never rent a car in the company name, but don’t overlook your liability for cars you don’t own.

An example may help.  I feel fairly confident that from time to time, you have one of your employees run an errand for the restaurant;  this could be trips to the post office or the bank or to pick up supplies.  Either way, if that employee has an at fault accident, then your company can very easily be dragged into the suit.  It can happen right off the bat, or you may be held liable on an excess basis, either because your employee let her insurance lapse on her vehicle or because she simply carries such low liability limits that they were quickly exhausted by the claim in question.  Either way, your restaurant could face a nearly unlimited liability exposure that could wipe out the restaurant’s very existence.  Going without here is just not worth the risk.

So how do you purchase insurance for this exposure?  Fortunately for your, most insurance companies make it quite easy to solve this problem.  The traditional approach is to add this protection to your business auto policy if you have one.  But lately, a more economical opportunity exists in that most insurance companies can add this protection to the businessowners insurance policy that covers the property and liability exposures for your restaurant.  And the great news is that the costs are usually very modest, often less than $100 per year for $1,000,000 in protection.

Please take a moment to review this exposure with your insurance agent to be sure that you have the protection that you need against this type of loss.  A few minutes of effort here can alleviate a huge risk for your company.

Clinard Insurance Group is an independent insurance agency which specializes in helping restaurants all across NC and SC with their insurance needs.  We know that insurance is the exception to most businesses in that hiring a specialist is generally less costly than hiring a general agent.  If you own a restaurant in North or South Carolina, you owe it to yourself to check out our programs and our rates for restaurants.  You can reach us, toll free, by phone at 877-687-7557 or you may find us on the web by visiting www.TheRestaurantInsuranceStore.com.

For most restaurant owners, workers compensation insurance is a necessary evil.  But unlike some other industries, say construction for instance, the workers compensation policy doesn’t take such a huge share of the insurance expense pie.  That may be about to change as workers compensation reforms are driving what could turn out to be big changes for workers compensation insurance going forward.

Workers compensation insurance reflects, over time, the impact of work related accidents and injuries on an industry by industry basis.  But along with that industry specific impact, are the overall, nationwide impacts of the economy and workers compensation laws and reforms that have drive rate changes over time.  Relatively speaking, we have been enjoying a period of fairly low workers compensation rates for most industries and restaurant insurance has not been an exception.  But now, there are forces at work that lead me to expect higher workers compensation rates for all business types in the very near future.  There are several factors driving this macro changes.

First of all, the past successes that the workers compensation industry has experienced in bringing in more safety programs and prevention programs have about run their course.  You can only take safety so far and in most cases we have reached the floor in terms of driving down work comp rates with additional safety programs.  This damper on rates is beginning to let up, allowing rates to begin to rise again.

A rebounding economy won’t help.  This may seem counterintuitive at first but consider that most of the people laid off in our current recession were those who were the least experienced and thus more prone to injuries and accidents. This has led to lower loss costs but now we are losing that price advantage.   As rehiring takes place, loss frequency is sure to increase and those costs will have to be reflected in higher rates.

Next consider that from a workers compensation insurance standpoint, we have been in an extended buyers’ market with rates continuously falling for more than a decade.  This has cleaned out the reserves of many big players in this market and insurance company insolvencies seem poised to begin to show up.  Having less providers will mean higher prices for consumers.

Last of all, the combined loss ratio for the workers compensation industry has been over 100% for the last couple of years.  Those types of losses are not sustainable so companies will pull out, fail or simply raise rates to stay afloat.  Again, this all points to higher workers compensation rates in the near future.

So what should a restaurant owner do to guard against this tide of higher work comp rates to come?  Well, first of all, take the time to implement the simple safety steps that can help protect your experience modification factor.  Next, make sure that you are buying your restaurant insurance from an agent who understands restaurants and insures enough of them to have a solid stable market for you when the winds of change come.  Also, and this may seem a surprise, don’t be stuck in the notion that you need to purchase your workers compensation policy from the same insurance company that insures your restaurant package insurance policy.  These days there are insurance companies that specialize in just work comp insurance and their safety programs, claims handling and other areas of expertise allow them to be more competitive than companies who try to do it all.

At Clinard Insurance Group, in Winston Salem, NC, we insure over a hundred restaurants, all across NC and SC.  We know that when it comes to buying insurance, the consumer is generally better served by hiring an agent with a strong specialty in their type of business.  Strange to say perhaps, but we think that when it comes to insurance, hiring a specialist turns out to be cheaper that hiring a generalist.  This may not be true in most industries but seems to be true when it comes to buying insurance.  If we can help you with your restaurant insurance needs, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.   There you will find links to our specialized insurance programs for Fine Dining Insurance, Casual Dining Insurance, Fast Food Insurance, Bar and Grill and Tavern Insurance, and our catering insurance program.

One of the wonderful things about owning your own business is that it offers you opportunities for tax savings and other lifestyle options that you would never have as an employee of that company.  Often, one of the first perks a restaurant owner gives himself often is the company car.  There are tax breaks associated with buying a car in your company name.  But there are also some lesser understood insurance coverage issues that go along with this choice and this blog will help you understand one of them.

When you insure a vehicle that you purchase in the name of your company, you will need to purchase a business auto insurance policy.  For the most part, this policy looks and acts a lot like the personal auto insurance policy that you are used to.  But there are significant differences, one of which has to do with the problem of who is a named insured on the policy.   With your personal auto insurance policy, the named insured is you of course.  With a business auto policy, the corporation or business entity is the named insured.  The subtle message here is that there are some protections that are afforded to a named insured on a policy that are not extended to the driver.  By trading in your personally owned vehicle for a company owned vehicle with its associated business auto policy, you are giving up some protection for yourself.

I think an example might help point this out better.  Let’s say one of your good friends comes and dines at your restaurant.  After dinner he hangs around at the bar to watch a ball game and before you know it he is closing the place down.  Your realize that maybe he shouldn’t be driving and so you agree to drive him home and you have your spouse follow you in the company car.    Now, let’s further assume that on the way home you make an error of judgment, have an accident that is your fault and now face damages in that accident of $500,000.  Your friend’s insurance company will pay most of the claim, but now they want to subrogate against you since you were liable for the accident in the first place (as the driver).  So here’s where it gets tricky.  If you have a North Carolina personal auto insurance policy and you are the named insured, then your personal auto policy will come to your aid and serve as excess coverage over that provided by your friend’s insurance company.  But, if you have only a business auto policy, no such excess protection exists.  And the real danger for most restaurant owners in this situation is that they just assume it would.

So what is the solution to the coverage gap?  It’s pretty simple really.  Just add DOC (stands for Drives Other Cars) coverage to the business auto policy.  This endorsement will put you in the position of a named insured on your business auto policy.  The policy can now list you and your spouse on your business auto policy and extend protections to you when you drive cars other than those listed on your business auto policy.  Now I want to make it clear that if you are driving a company car and you still keep a personal auto insurance policy in force on your personally owned vehicles, that this coverage isn’t needed.  But if the only cars you have are owned by your company, then call your agent today and make sure that this coverage gap is closed.

At Clinard Insurance Group, in Winston-Salem, NC, we specialize in helping restaurant owners all across North and South Carolina with their restaurant insurance needs.  We want all restaurant owners to be informed insurance consumers.   We understand every restaurant is different from all the others and we know that you don’t want to buy protections that you don’t need or worse yet, miss out on the ones that you do need because you were lumped into some overly broad category of restaurant insurance.  That is why we have created 5 distinct restaurant insurance programs.  We have a special restaurant insurance package for fine dining restaurants, a unique restaurant insurance program for casual dining restaurants, a fast food restaurant insurance package, a bar and grill and tavern insurance program and a special insurance program for caterering companies.  If you would like help with your restaurant insurance questions, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantStore.com.

You can find the source article for this essay along with other restaurant insurance articles at www.RestaurantInsuranceGuy.com.

Many restaurant owners out there have vehicles that are owned in the corporate name.  This can run the gamut from personal cars for the restaurant owner to vans used for pickups and deliveries.  These vehicles, titled in the business name should always be insured on a commercial auto policy in the same business name.  There is a wrinkle in the coverage protection in this instance that can leave an injured employee without any coverage and could perhaps, leave your restaurant vulnerable.

I’m not talking about DOC protection which of course is another dangerous wrinkle when your restaurant has company owned cars.  To learn how to protect your personal assets from that particular coverage gap,  watch my DOC for restaurant owners video.

The problem that I want to address in this particular blog really relates to the risks of injuries that could occur to one of your employees.  Sure, you have workers compensation insurance in case one of them gets injured.  If not, read my blog on why you need to buy that coverage even if the law doesn’t require it.  But the problem that can occur with a company owned vehicle and your employee is best described with an example.  

Let’s say you send out an employee to make a delivery and since it is the last one of the night, you tell them to just drive the van home and bring it back when they come to work tomorrow.  Now, assume that on the way home, after the last delivery was made, they have an accident that is their fault.   Also assume that your employee is injured in this accident.   Many restaurants do not offer health insurance to their employees so now where is this employee going to get the money to pay for his or her medical bills due to this accident?  Well, the simple answer would seem to be that you just file a workers compensation claim for those injuries.  After all, the employee was on the job.  Wasn’t he?  Well, in North Carolina we are seeing that type of claim denied by insurance companies.  The argument is that when the employee is using the vehicle for personal use (in this case driving home from work), then that employee is not covered by workers compensation.

Now what are the downsides for you, the employer?  First of all, your employee may face overwhelming medical bills and may not be able to afford the help needed to get back to work as quickly as otherwise might be the case.  Also, there is some risk to you, the employer that a sharp attorney may find a way to drag you into a long, drawn out legal case due to the fact that your vehicle was involved.   The final result for you is unclear and difficult to prognosticate but suffice to say, this is a situation that you want to be aware of and avoid if possible.  I don’t have an insurance solution for you except to say that if your employee has life insurance, health insurance and disability insurance then most of the gaps will be covered.  If not, the best advice is to make sure that you don’t provide company owned vehicles for your employees’ personal use.

Clinard Insurance Group, located in Winston Salem, NC is an agency with a niche specialty in helping restaurant owners in both North Carolina and South Carolina with their restaurant insurance needs.  We have developed specialized programs for several different types of restaurants so that you don’t have to buy a one size fits all policy for your restaurant.  We have a specialized insurance program for catering companies, a fast food restaurant insurance program, a bar and grill and tavern insurance program, a unique fine dining insurance program and a casual dining restaurant insurance package.  If we can help you with your restaurant insurance questions, please feel free to call us, toll free, at 877-687-7557, or visit us online at www.TheRestaurantInsuranceStore.com.