Underwriting considerations
What should be kept in mind when underwriting coverage for a restaurant? Here's a list of considerations.
Has been in business for three years with the same ownership
Owner has direct personal involvement
Management team has been in place for at least one year
Has financial statements or a current Dunn & Bradstreet
Has an overall loss ratio of less than 50%
Makes frequent bank deposits of cash
Has modern, well-maintained equipment that will limit loss exposures
Has strong safety practices in place including employee safety training
Has stringent sanitation and food handling controls
Provides emergency lighting if seating capacity exceeds 50
Has exits clearly identified and easily accessible
Has well-lit, easily accessible entryways and parking facilities
Is equipped with an automatic fire suppression system, which at a minimum covers all grills, open-flame stoves, and deep fat fryers
The fire suppression system has a semi-annual service contract
The hood and ducts have a quarterly service contract
Meets UL300 standards (at a minimum) if cooking equipment was made in l994 or after and if vegetable oil is used in the deep fat fryer(s)
Has fire extinguishers available in kitchen and restaurant areas as provided by the National Fire Protection Association Life Safety Codes
Has a nightly housekeeping process that:
Checks and removes excess buildup of debris
Extinguishes all candles and properly disposes of ash tray contents
Properly disposes of trash nightly
Has a regular maintenance program for all refrigeration and air conditioning equipment
Has a liquor liability control program and a strictly enforced patron ID check procedure in place
(See the upcoming lesson on liquor for more information.)
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.
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