Why Do Restaurants Need Excess Liability?

Posted on: March 17, 2021 by RMS Hospitality

Do you work with clients who own restaurants and are shopping for extra insurance coverage? You may want to stress the importance of having adequate excess liability insurance. Although many restaurant owners already have basic insurance types in place, the restaurant industry comes with several inherent risks that may require additional protections beyond just the essentials. As you meet with your restaurateur clients, you may want to discuss these key reasons restaurants and others in the hospitality industry can benefit from getting excess liability coverage.

It Provides Coverage for Some of the Most Common Hospitality Issues

Beyond basic insurance or legally required insurance, excess policies can provide more coverage for some of the most common hospitality issues encountered in the restaurant industry. Excess liability could provide, for instance, higher cash ceilings or other protections in the event of worker harm, damage to the physical premises or company property, and much more. Some examples of different liabilities that an excess policy could potentially cover might include:

  • Bodily injury resulting from workplace falls and more
  • Commercial auto coverage for company cars
  • Property damage due to theft, vandalism, or other covered circumstances
  • Liquor liability if alcohol is sold on the premises
  • Legal expenses and costs of combatting lawsuits

There Are Numerous Restaurant Liability Exposures That Need Protection

One of the main reasons restaurants, in particular, should consider excess coverage is that the food industry has a large number of unique exposures that may require extra protection. For instance, there are risks involving potential food contamination, health and sanitation issues in the kitchen or dining space, cooking-related employee injuries, and more. Without additional insurance, the restaurant could be exposed to legal and financial matters.

An ‘Umbrella’ Policy Helps Strengthen Restaurants’ Other Coverage

Umbrella insurance, so called because it ‘covers’ other insurance for more protection, can be very helpful for restaurants wanting to expand their coverage and strengthen existing coverage. Umbrella policies are particularly common in the hospitality, food and beverage industry, particularly because there are many unpredictable factors that could go wrong and require foresight to mitigate. For instance, a lawsuit against the restaurant, employees’ lost wages due to unforeseen incidents or employers’ liabilities involving wrongful termination are instances where additional insurance could be a lifesaver for the restaurant.

Although it’s common for many restaurant owners to have basic insurance in place already, the various risks and liabilities inherent to the restaurant industry may require getting excess liability insurance as well. As you discuss insurance options with your clients, make sure to bring up these essentials reasons restaurateurs should consider excess coverage for maximum protection and security for their business. The additional coverage could potentially lessen their long-term legal and financial burden and provide the peace of mind they need.

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 knowledgeable experts today at (888) 359-8390.

Posted in: Hospitality Insurance

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