Umbrella insurance can offer extra protection to complement a standard underlying coverage. Most restaurant & bar insurance policies feature limits, including the maximum amount the carrier will pay. Some lawsuits and accidents need may need coverage beyond the limit your current policies offer. Having umbrella insurance can help you to pay the extra amount.
Here are three ways your restaurant or bar could benefit from umbrella insurance:
1. Extending Liability Coverage
An umbrella insurance policy offers more funds to cover different risks. Bars and restaurants need insurance policies to cover general liabilities, liquor liabilities, commercial property, errors and omissions, and other threats. General liability protects your business if someone slips and falls within your business space, including the parking lot and function rooms. The insurance also pays for illness or injury from contaminated food and expired drinks.
Your restaurant or bar may face a general liability lawsuit requiring settlements beyond your current general liability limits. The standard insurance will pay its limit, and any extra left is taken from your umbrella insurance. Purchasing umbrella insurance provides additional funds for covering liquor liabilities, including injury to patrons and property damage. The insurance can pay for employer liabilities like wrongful termination, harassment, and discrimination.
You can also use umbrella insurance to cover auto liabilities and accidents while using owned or leased vehicles. The goal of umbrella policies is to extend coverage limits. Your general liability insurance may have a $1.5 million limit. If your restaurant or bar faces a lawsuit worth $2 million, you must find a way to cover the extra $500,000. An umbrella policy will only cover the excess amount left when underlying coverage is maxed.
2. Protecting Business Assets
Nearly all insurance policies protect business and personal assets from being used in case of a lawsuit or accident. Restaurants and bars face various risks. A customer or patron may slip, fall and suffer personal injury at your facility. Your foods and drinks can also cause poisoning if contaminated. If you own a bar, alcohol intoxication and the environment can leave you vulnerable to liquor liabilities. Workers may also get injured while at work.
Your cars, equipment, inventory, building, and contract need protection. Purchasing restaurant & bar insurance policies can help you protect the business from all types of risks. Some of the top risks are natural disasters, lawsuits, accidents, fires, and burglary or theft. Standard insurance may not adequately cover the risk. Some case settlements may exceed the maximum limit, which leaves your business or personal assets vulnerable if found liable.
Paying for a lawsuit from business income can halt your operations or even force liquidation and closure. With umbrella insurance, you have more funds to cover the extras. The insurance is flexible, so you can purchase as little or as much as you need based on underlying policies. You can calculate how much more insurance you’ll need to cover the restaurant or bar. The goal is to purchase adequate policies with your standard plan and a little extra in case you need it.
3. Addressing Coverage Gaps
Business umbrella insurance doesn’t offer primary liability coverage. The policy provides excess limits over all of the policies. Umbrella insurance can also cover gaps in underlying business policies. Insurance providers allow restaurant and bar owners to achieve a given level of customization. You can build coverage through FLIP programs or add additional policies to your primary liability coverage. Most policies have areas they don’t cover.
Umbrella insurance can cover the gaps or additional liabilities not included in regular business insurance and BOPs. Common gaps include libel and slander. Your restaurant or bar can face lawsuits for slander or libel. Such cases aren’t covered under general liability or liquor liability policies. You can add specific coverage if your business is at a high risk of facing such lawsuits. An easier solution would be to purchase umbrella insurance.
Umbrella insurance is based on the limits of the underlying policy. Your insurance may include coverage up to the full limit. The policy may also remove coverage for sub-limited events, or double the sub-limit. Consider umbrella insurance if you need additional coverage or have gaps in your policies. Note that umbrella policies won’t cover punitive damages or personal liability claims. The umbrella covers what underlying policies feature and a few other risks.
Building Your Restaurant & Bar Insurance
Purchasing umbrella insurance is one way to extend coverage for your primary liabilities. Even with the best restaurant & bar insurance you may still need umbrellas. Modern cases may settle for much more than industry limits. You should have extra protection ready to supplement your underlying insurance. Stick to reputable insurance providers focusing on restaurants, bars, and other hospitality businesses.
