A Guide to Completed Operations Insurance (And Why Your Clients Need It)

Posted on: November 18, 2020 by RMS Hospitality

Running a successful restaurant takes a lot of patience, time, and careful planning. Because three out of every five new restaurants don’t make it past their first year of business, restaurants must do what they can to limit exposure to liabilities that can ultimately close their doors for good.

For restaurant and hospitality clients, obtaining the right kind of insurance to protect against costly claims is an essential step to operate responsibly. One such coverage, Products & Completed Operations Insurance, is a comprehensive package that covers a range of risks, helping to minimize legal payouts.

Here’s a better look at Products & Completed Operations Insurance and why restaurants need it.

What is Completed Operations Insurance?

This coverage moves the risks and liabilities related to a finished product. In the case of restaurants, this means anything they provide to their customers, like hot plates, drinks from the bar, desserts, and more. Completed operations insurance covers a client’s liability from injuries and illnesses to a third party after leaving a restaurant or eating their to-go order elsewhere. Food that consumers eat may not qualify as a product under specific liability policies unless an endorsement is added.

Importance of Completed Operations Insurance & Why Clients Need It

Products & Completed Operations Insurance helps restaurant owners and others in the foodservice industry settle claims while also staying away from the possibility of having to shut down after an expensive lawsuit. The coverage ensures sufficient reimbursement for damages, injuries, or illnesses resulting from a finished product.

Claims related to customers falling ill from the food they ate are not uncommon. For example, many customers have suffered from e. Coli after eating at a restaurant. These mishaps also occur on a larger scale, such as when Blue Bell Ice Cream paid nearly $700,000 in compensation to a widespread community outbreak caused by their operation.

When restaurants obtain products & completed operations insurance coverage, they can settle punitive damages evaluated by a court of law. Insurance providers, such as RMS Hospitality Group, supply the client in the industry with legal defense and pay for any settlements from claims connected to the covered completed work or product. The extent of coverage may tackle specific flaws in the ingredients used to prepare food or a possible mechanical issue in the kitchen’s appliances.

About RMS Hospitality Group

At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom-tailored solutions to meet any venue’s specific needs. For more information, contact our experts today at (888) 359-8390.

Posted in: Completed Operations

COVID-19 Update:

At RMS and associated firms, business continues as usual. Our staff is remote-capable and available to handle all partners, brokers, and insureds at the present time. Contact us today!