Webinar Recap: Today's Top Restaurant Insurance Issues: Traps, Gaps and Cyber

Earlier this month, Dan Fugazzi of Hylant Insurance presented a webinar exploring how restaurants can mitigate risks, discover efficiencies and lower costs by evaluating their current insurance policies. 

Insurance is an important business aspect many people don’t think about until they have a claim. At that point, they may realize their policy contains exemptions that result in lack of coverage. When evaluating insurance policies, it’s important to understand where gaps exist while avoiding shopping for the lowest premium to avoid subpar coverage. Restaurateurs should consider the following when researching coverage options: 
  1. Does your business income coverage have a provision that includes payroll expenses in your loss determination? In most cases, you’ll want to exclude these expenses from your business income coverage because you will get significantly less in your claim recovery.
  2. Does your business have a protective safeguards endorsement on your policy that requires you to have your sprinkler system, grill hood fire suppression system or security system maintained to receive full coverage? If so, consider eliminating these safeguards from your policy.
  3. Typical coverage limits of insurance for debris removal is relatively low. If you have a claim resulting in a total loss and rebuild, the cost to hire someone to knock down and haul away debris can be multiples of what your insurance will cover for this claim.
  4. Ensure you have the proper business entity names on your insurance policies to avoid any unwanted delays or headaches with your insurance provider.
The second half of the presentation focused on the importance of cyber insurance. As data breaches become more commonplace, it is essential for restaurants to evaluate their need for information security and cyber insurance. Cyber insurance is a relatively new and evolving form of coverage designed to address the emerging information-related risks facing today’s companies. These risks include breach of privacy, failed network security and media liability. Unlike more traditional forms of coverage, there are no standard cyber insurance policy forms, provisions, definitions or exclusions.  If you discover your restaurant lacks coverage, do your homework to find a reputable cyber insurance carrier and to understand how your policy works in the event of a breach.

For more information on insurance traps, gaps and cyber liability considerations, listen to the full recording of the webinar here. And, for more information on cyber insurance, contact Judy Selby at jselby@bdo.com.

Be sure to keep up our latest thoughts by following the practice on Twitter at @BDORestaurant.

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