Connections for Success

 

05.31.11

Mrs. O’Leary’s Cow
Anna Maria Viti

Have you heard the story about Mrs. O’Leary and her unpretentious cow kicking over the lantern that started the Great Chicago Fire?  Have you ever stopped to think, what if your business suffered similar destruction that caused a total loss…how would you recover?  Would you recover?

A good place to start is making sure you have the proper business insurance to cover your lost assets.

First, have you thoroughly reviewed the insurance portion of your lease to determine what your responsibilities are as the tenant?  The majority of business owners assume they are only responsible for the contents, however, in most cases, this is not true.

Consider the following coverage’s:

  • Business Personal Property Insurance provides coverage for your building and contents in order to protect your assets.
    • If you do not own the building, check your lease to confirm if your landlord is requiring you to carry coverage on the building.
    • If you are a tenant, be sure to carry high enough limits to replace all of your contents caused from a total loss, and do not forget to include coverage for your betterments and improvements.
    • Betterments and improvements include items such as drywall and paint, which you may be financially responsible to replace according to your lease.
    • Make sure your building and property are assessed at replacement cost, not actual cash value.  Actual Cash Value is the depreciated value of the items.
  • Business Interruption Insurance provides you with lost income and ongoing expenses that occur while your business is down due to a covered loss, such as a fire.
    • This coverage is very important as it helps you recoup the financial losses while you rebuild.
    • Be sure your business interruption coverage triggers immediately and is not subject to a time deductible.
    • You want to make sure you are covered on an actual loss sustained basis and no limits should apply.
    • For example, if your restaurant loses power on a Friday, do you want to recover your lost sales immediately…or 72 hours from the time of the power outage?
    • A restaurant generates most of their weekly revenues on the weekend.  You want to ensure that you have a way to recoup those revenues, should you have a loss.  Having a zero time deductible will make certain that you have a way to recover those losses.

Besides having a total loss, such as a fire, there are other coverage’s to consider having in order to protect your business and employees.  Coverage’s include; Liability, Liquor Liability, Auto Liability, Workers Compensation, Life, and Disability.  Many of these coverages can be combined into one package policy so that you will not have multiple policies to keep up with.  The best way to handle your insurance needs is to seek out an insurance agent that specializes in restaurants, one who knows the ins and outs of ensuring this specific industry. The Viti Companies currently insure over 300 restaurants across the United States and we work alongside various insurance carriers who specialize in the restaurant industry.

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