Post written by: Scott Duncan
Sorry, Kermit! The charm of business interruption insurance runs much deeper than Miss Piggy’s lip gloss! In fact, the beauty of the coverages’ ability to protect your restaurants’ ongoing operations becomes more glamorous with each layer peeled.
Did you know the three primary components of business interruption coverage (Business Income, Extra Expense and Dependent Properties) were specifically designed to:
- Support your family
- Protect your employees
- Retain your customers
- Ensure your restaurants’ future
– You are reimbursed for the net loss of income resulting from a temporary suspension of your operations necessitated by a physical loss of or damage to property at your restaurant location due to a covered cause of loss.
For example, a common kitchen fire impacts:
- Operating Expenses — Who’s going to pay your mortgage, taxes, advertising and other fixed expenses when your doors are closed and sales are lost? Will you ever open again?
- Payroll — How long will your best server wait for her next check to arrive before taking her talents to South Beach … Bar and Grille?
- Profit — Will your long awaited elopement to the Emerald Isle go off without a hitch if discretionary income suffers?
But, Business Income insurance has your restaurant, employees and fiancé covered!
– You are reimbursed for additional expenses incurred to avoid or minimize a temporary suspension of your operations as a result of a physical loss or damage to property caused by a covered cause of loss.
- Increased Cost of Operating — Lightning strikes the transformer delivering electricity to your lights, refrigerators, freezers and air conditioner. Your restaurant is dark, your food stock is compromised and your customers are comfortably seated in your competitors’ booths. Extra Expense insurance can reimburse you for the cost of renting generators and establishing operations at a temporary location before your loyal customers settle in permanently across the street.
– You are reimbursed for the net loss of income you sustain from the temporary suspension of another business’ operations due to the physical loss of or damage to their property from a covered cause of loss. (Important Note: Dependent Properties coverage is an extra “side” so don’t forget to add it to your order.)
- Customer Lures — How will your sales be impacted when an earthquake along the New Madrid Fault destroys the nearby arena and draws professional sports, concert and monster truck rally fans to the new location situated well out of danger but nowhere near your establishment? Will profits suffer if a fire sweeps through the local mall and your restaurant, one block away, sits physically undamaged, but your sales results reflect diners migrating toward the neighboring community?
- Suppliers – What will you do if your fresh “catch of the day” eludes all nets for months on end after a catastrophic storm along the Acadian coastline severely damages the entire fleet of “safely” dry-docked vessels?
- Customers – How will you replace your revenue stream when the local manufacturing plant’s lunch hour you’ve catered the past ten years is suspended after a civil authority shuts down operations following a dangerous chemical spill?
Maybe business interruption insurance isn’t all superficial glamor, excitement and flash after all!
For more information about business interruption insurance, please contact your local independent insurance agent. They can also offer many other protective products to ensure you dance the Irish jig, are greeted daily by loyal employees and satisfied customers and your signature dish’s aroma continues to waft throughout your restaurant for years to come!
For a list of independent insurance agents in your area, click here.