As a restaurant owner it is very important that you are properly insured so that you can protect your investment in the restaurant and your employees in the event of an accident. There are three general types of insurance: (1) life insurance, (2) health insurance, and (3) property/casualty insurance. Falling into each type are several ‘sub-types’ that should be considered on a case by case basis.
Property / Casualty Insurance provides coverage for real property loss (i.e. fire, water damage, etc.) and also personal property loss such as furniture, fixtures, inventory, office equipment and other supplies stored at your restaurant. These policies provide coverage when a patron gets injured or when another person’s property is damaged because of the negligent actions or inactions of the restaurant owner or his/her employees.
Dram Shop (Liquor Liability) Insurance is a specific casualty insurance that protects restaurant owners when an employee sells alcohol to a visibly intoxicated person, habitual drunkard or a minor, who then causes an accident or injury to a third-party (i.e. car accident, or assault).
The Loss of Use or Business Income coverage provides insurance protection of your income in the event that your restaurant is unforeseeably closed because of a fire, flood or other insurable loss. Basically, if your restaurant closes your insurance will pay you an amount consistent with your average revenue stream until your restaurant is rebuilt.
Employee Liability Insurance provides liability coverage for employment related claims such as: wrongful termination, sexual harassment, breach of employment contract, employment discrimination, and defamation.
Workers’ Compensation Insurance (“WC”) is required by New York State for all employees. Be sure that your ‘independent contractors’ are actually employees, otherwise you can be heavily fined for not ensuring them under your WC policy. WC insurance provides coverage to employees if they are hurt in a job related accident. New York does not permit an employee to sue his or her employer for a work place accident unless the employer was “grossly negligent.” Absent such negligence, an employee’s sole remedy is to apply for benefits under the employer’s WC policy.
Here are some additional types of insurance coverage you may want to consider:
- Plate-glass insurance—covering window damage
- Burglary insurance—covering damage to restaurant and theft of property and cash
- Fidelity bonding—covering employee theft and embezzlement
- Fraud insurance—covering counterfeit money, bad checks, and stolen credit cards
- Product-liability insurance—often added as a rider to a restaurant’s casualty insurance. Covers illness and injuries caused by negligent preparation or service of food and drink
- Life insurance—covering the life of the owner(s) or key employee(s)
- Errors and omissions insurance--covering the store against claims from customers who suffer injury or loss because of errors made, or things that should have been done but were not done.
- Spoilage coverage - covering perishable food items that spoil as the result of covered loss.
Please call Attorney James DiPasquale at (646) 343-4607, for a free consultation.
DIPASQUALE LAW GROUP
James D. DiPasquale, Principal