Older fire suppression systems for restaurants may no longer be enough to extinguish restaurant fires today.  That is because of new cooking media and newer cooking methodologies that can generate higher temperatures and lower flash points.   This 2 part series will look at the new UL300 standards and help you understand what you have now and what you may want in the future.

So what is UL300?  UL 300 is the standard for testing of fire extinguishing systems for protection of restaurant cooking areas.  Underwriters Laboratories, Inc, referred to as UL, is an independent, not for profit product safety testing and certification organization.  How do you know if your current system is UL 300?  According to Underwriters Laboratories, the only way to know is to check that the model number on your fire suppression system is UL 300 compliant.  If so, then you must verify that all components have been installed as specified by the manufacturer’s manual.

The best place to start is to look for the UL300 label on the systems extinguishing chemical tank.  Another indicator is the type of discharge nozzle located over each cooking surface.  All UL 300 compliant systems use a wet extinguishing agent.  Discharge nozzles for the older, dry chemical systems are fairly large, usually around 2 inches in diameter.  Wet system nozzles are narrow, typically ¾ inch to 1 inch in diameter and are typically covered with red, orange or yellow plastic caps to keep them clean.

You may have to ask the fire protection company that is offering the ongoing service and inspections on your system.  You can identify them by finding the service record tag.  This tag is normally attached to the manual pull box for the system.

Here are some red flag indicators that your system is not UL 300 compliant:

Installed prior to 11/21/1994.

No UL label on the cylinder.

Dry chemical extinguishing media.

Dry chemical discharge nozzles – large size – 2 inches in diameter

System uses water spray to protect appliances.

System uses a single nozzle to protect multiple appliances or multiple cooking surfaces.

So what if your current system is not UL 300 compliant?  In that case I would recommend that you replace it with a UL 300 system.  In part 2 of this 2 part series I will show you how to go about that and how to get someone else to pay for it.

Clinard Insurance Group, located in Winston Salem, NC, is an insurance agency that specializes in insuring restaurants all across North Carolina and South Carolina.  If you have a restaurant in NC or SC and would like our help answering your restaurant insurance questions, please call us, toll free at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.   We know that not every restaurant is the same, so we have developed 5 specialized restaurant programs to meet your specific needs.  We have a fine dining restaurant insurance plan, a casual dining restaurant insurance plan, a fast food restaurant insurance plan, a bar and grill and tavern insurance plan and a special insurance program for caterers.

This is the final installment of our 10 part series on buying restaurant insurance for NC and SC restaurants.  This installment covers the often overlooked but almost always needed protection for liquor liability.  Now if your restaurant doesn’t sell any alcohol, then you will not need to purchase this protection.  But if you do sell alcohol, then this is a coverage that you can’t afford to do without.  Skipping this protection could force you to sell your restaurant and lose most of what you have worked for all of your life.  Yeah, it’s that important.

Liquor liability protects your restaurant against 3^rd party claims for those injured by an inebriated person who consumed some or all of their alcohol at your restaurant prior to the loss.  The loss most often comes in the form of a car accident.  Hold on you say, you would never serve someone who is drunk, or let a drunk leave your bar with his car keys in hand.   But the liability issue doesn’t work that way.  Here’s a real world example.  One of our clients had a claim several years ago that cost their insurance company over $750,000 and that was less than 1/3 of the total damages.  You see, they had served a customer a couple of drinks with dinner.  This customer left their restaurant about 8:30 pm and then visited two bars before finally killing another person in an auto accident around 2 am.  This customer was not drunk when he left our client’s restaurant, but because they had served him alcohol, our client was dragged into the lawsuit and forced to defend themselves and ultimately forced to share in the damages.

Hopefully now I have your attention and you understand how important it is to have this protection.  Now let’s talk about buying this coverage.  There are two ways liquor liability insurance is sold.  One is as a standalone policy and the other is ad an add on to your businessowners or package policy for your restaurant.  Stand alone policies are generally more expensive and are most often used for true bars and night clubs as opposed to restaurants.  If you own a restaurant and your liquor liability is a standalone policy, then this should be an immediate red flag that you need to evaluate your current policy and your insurance agent as you may not be using a true restaurant insurance specialist. 

Rates for liquor liability vary widely from one insurance company to the next and also from one program to the next offered by the same company.  There are several factors that can drive your liquor liability rate.  First of all is the ratio of alcohol sales to food sales.  Get this ratio above 30% and you are going to start falling out of the most preferred rate plans.  Get above 50% and you may find yourself kicked out of the businessowners add on coverage and be forced to purchase a standalone liquor liability policy.   Another factor is the type of alcohol that you sell in your establishment.  If you sell only beer and wine and no hard liquor, then you should have a reduced rate.  If you are selling no hard liquor at all, then you need to check with your agent to be sure that he or she knows this and that this is reflected in your rate.  Past claims will also play a big part in what rate you pay and whether or not you are able to add this protection to your businessowners policy or if you have to purchase a standalone policy.  The last factor that can impact your rate is the type of safety training and safety programs that you are running in your restaurant to help prevent a liquor liability claim from happening.

One last tip that should be mentioned relates to bar and grill and tavern type restaurants.  Often these types of restaurants are discriminated against in their liquor liability rate and get classified as night clubs.  This is often unfair and you should know that there are a few programs out there that recognize this and have special rates for bar and grill type establishments that don’t treat them as night clubs.  For more information on the bar and grill liquor liability issue, please read my blog on this topic by clicking here.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping restaurant owners with their insurance needs.  We understand the importance of using an insurance specialist for your industry and we work hard to fill that need for our clients.  Our specialty with restaurant owners is so broad that we can usually help you with every type of policy that you buy for your business and for your family, including your family  auto insurance, your home insurance and  your life insurance and retirement planning.   We also understand that not all restaurants have the same insurance needs and as such we have developed 5 different restaurant insurance programs so that you aren’t subsidizing add on coverages that you don’t need.  We have a fine dining restaurant insurance program, a casual dining restaurant insurance program, a fast food restaurant insurance program, a bar and grill and taveren insurance program and a special insurance program for catering companies.  If we can help you with your restaurant insurance in either North Carolina or South Carolina, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantStore.com.

This is part 9 of our 10 part series on how to insure your restaurant.  This section deals with an insurance policy that is not well understood and even less often purchased.  This is the EPLI insurance policy and EPLI stands for Employment Practices Liability Insurance.  This is a coverage that every restaurant owner with employees should consider purchasing.

EPLI coverage nicely fills some gaps in coverage that your business owners policy or your commercial package policy leaves.  Specifically these have to do with some intentional actions that you take with your employees for which you may later be found liable and owe for damages.  The most common types of EPLI claims are for wrongful termination, sexual harassment, and discrimination.  Now you might say to yourself that you don’t need this coverage because you would never do any of those things.  But what you must consider is that you might be accused of doing one of these acts.  And if so, then you will have to defend yourself and the defense is not a cheap process.  So even if you didn’t want to purchase the insurance for the judgment because you think you would never commit one of these acts, consider that you might want to purchase the insurance to pay for your attorney to defend you.

EPLI can be purchased as a separate policy, or in some cases can be added to your existing package or businessowners policy.  If you purchase it as an add on, be sure that you understand if the protection has a sublimit of coverage that is lower than your general liability limit and also check in to be sure that defense costs are included.  Last of all, if defense is included, be sure to find out if that is unlimited and outside of the policy limit, or if defense costs are counted against your total liability limit.  

There is one more thing to consider.  Most EPLI policies are claims made based policies, whereas your general liability protection is usually occurrence based.  With a claims made policy, you need to report the claim within the policy period so if the claim rears its head after you have cancelled the policy, then you will find yourself without coverage.  To protect yourself from this situation, you should laundry list your potential claims at the end of each policy term and submit that list to your insurance carrier.

EPLI protection may seem like a real specialty coverage for just a few but the truth is, with the layoffs that many restaurant owners have had to resort to in the past few years, this is a must have protection.  At Clinard Insurance Group, in Winston Salem, NC, we want all of our clients to be informed insurance consumers.  We encourage you to call us and ask questions regarding this or any other blog article that we have posted.  We specialize in helping restaurant owners buy insurance for their restaurants and we understand that not all restaurants are the same.  We don’t want your insurance policy to a square peg jammed into a round hole, so we have created 5 different restaurant insurance programs to help you better select the one that meets your needs.  We have a fine dining restaurant insurance program, a casual dining restaurant insurance program, a fast food restaurant insurance program, a bar and grill and tavern insurance program and a special insurance program for caterers.  If you need help with your restaurant insurance, please call us, toll free, at 877-687-7557 or visit us on the web at www.TheRestaurantInsuranceStore.com.

This is part 8 of our 10 part series on insuring your restaurant.  This article deals with a policy that is only purchased by about 20% of restaurant owners.  That is the commercial umbrella policy.

The commercial umbrella policy is a liability policy that adds an extra layer of protection over and above your underlying liability policies, such as your general liability insurance, your workers compensation insurance and your commercial auto insurance.  This policy provides a quick, convenient and usually inexpensive way to increase your overall liability protection on all of your underlying policies at once. 

The commercial umbrella policy will have underlying limits requirements for your above mentioned underlying liability policies.  In some cases it is cheaper to raise the underlying limits of your other policies and in other cases it is cheaper to keep them low and add the umbrella policy.  You should take the time to go over this in detail with your agent so that you can make the choice that is best for your restaurant.  Once your policy is issued, always check to make sure that all of your underlying policies are listed on the declarations page of your umbrella policy so that you know it is adding additional liability protection to all of your policies.

Most every commercial umbrella policy will have a self insured retention listed on the declarations page of the policy.  This self insured retention acts like a deductible but it is a bit trickier than the deductibles that you are used to.  Policy forms vary, so check with your agent to see if the self insured retention applies to all claims that are filed against your policy, or just to those where the umbrella policy provides the first dollar of protection.  That is possible because of the wording of the umbrella policies, in some cases there may be additional protection provided by the umbrella policy that is not provided by any of the underlying policies.

One last thing to take a look at is whether defense dollars (money paid to attorneys to defend your case) are included in the total policy limit or are outside the limit and therefore unlimited unless noted otherwise.  This could dramatically change the outcome for you if most of your claim was defense costs to fight the claim.

The commercial umbrella policy is a unique policy that is not used often by most restaurant owners.  But every restaurant owner should take a close look at the umbrella policy to see if it provides protection or benefits that they need to be properly insured.

At Clinard Insurance Group, in Winston Salem, NC we make it a part of our job to help insurance consumers out there become informed consumers.  We specialize in insuring restaurants and we have programs to help our restaurant owners with every policy they purchase on their restaurant and for their personal needs.  We are truly a one stop shop.  We have created special niche programs for 5 different types of restaurants.  We have a fine dining restaurant insurance program, a casual dining restaurant insurance program, a fast food restaurant insurance program, a tavern and bar and grill insurance program and a special program for caterers insurance.  If we can help you with your restaurant insurance needs, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.