Keep posted, keep informed.
Restaurant sales are continuously increasing. In 2015, restaurant sales hit a record high of over $709 billion, and they’re showing no sign of slowing down anytime soon. As a result, existing restaurants are opening new locations, and entrepreneurs are launching new restaurants all over the country. The bar and nightclub industry is also booming.
For insurance agents, this translates to a large and lucrative opportunity to make sales.
Restaurant and Bar Risks
Because they serve food and drink to the public, restaurants and bars assume a significant amount of risk. For example, selling food puts a restaurant at risk of accidentally spreading foodborne pathogens that can lead to illness or even death. Likewise, when an establishment sells alcohol, it may be held responsible for related assault, battery, injuries and deaths that occur. The risk is especially high if the restaurant serves too much alcohol to a single patron.
The risks within this industry are high, so some establishments have trouble finding coverage, making this a ripe market for agents.
Typical Restaurant and Bar Coverage
Most restaurants and bars, especially those operating smaller establishments, tend to purchase only the coverage the bank or landlord requires them to carry.
When a restaurant or bar sells liquor, liquor liability coverage may be recommended as well. This type of coverage may be available as part of a package, or it may be purchased separately.
Another important coverage for restaurant owners is Worker’s Compensation and Employment Practices Liability. Worker’s Compensation laws are regulated by the state, many states require Work Comp coverage if you have one or more employees.
Employment Practices Liability is a coverage needed if you hire employees. This coverage deals with wrongful termination, sexual harassment, discrimination, invasion of privacy, false imprisonment, breach of contract, emotional distress, and wage and hour law violations. This coverage can be purchased many times as part of a Package policy or in a separate policy.
Getting into the Market
1. Be aware of exposures.
Exposures for restaurants and bars are changing. For example, one type of risk that has grown in recent years relates to food allergies. Restaurants who serve food containing allergens to a patron with a known and disclosed allergy could face liability claims. Being aware of the most common exposures is essential for any agent selling in this market.
2. Classify establishments properly.
To ensure that clients buy the right amount of protection, agents must know how to classify establishments properly. For example, an establishment that sells more liquor than food should be classified as a bar instead of a restaurant, even if it may look like a restaurant on the inside.
3. Work with a knowledgeable wholesaler.
Working with a knowledgeable wholesale insurance broker is the best way for an agent to guarantee access to all the information and products needed to be successful in this industry.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed and place business in specialized markets. For more information about our products, or to become an agent, contact us today at (855)-248-1480.