Restaurant Insurance Claims
What does your restaurant insurance cover? Restaurants present unique challenges when filing property damage claims. The insurance company may deny your insurance claim for many reasons.
Policyholders need to review their policies and be aware of the responsibilities once a loss occurs. If you fail to cooperate with the insurer’s requests in the investigation, you may be denied. If you have any questions regarding these duties you should contact an experienced insurance professional for an opinion.
Restaurant fires are common. Review your property insurance policy annually to ensure you have the proper coverage.
Cleanup and other return-to-business operations that destroy or alter evidence could lead to a claim denial. Get prior approval from an insurer before those activities to avoid this situation.
With a restaurant property insurance claim, there is also typically a business income loss. Getting your restaurant back up and running may take years. Check your insurance policy to ensure you’re collecting what is rightfully owed to you.
In one instance, a restaurant was shut down due to civil authority ordering an evacuation. The claim was denied due to the lack of physical damage to the building. Because the business had the proper endorsement on the policy, they received coverage for the income loss because the storm had caused physical damage elsewhere and civil authority ordered the evacuation. The business did not have to suffer “direct physical loss” because they required that the policyholder be prohibited from access to the premises due to direct physical loss of or damage to property, other than at the “covered premises.”
Restaurants, food stores, and food brokers should also purchase Spoilage Coverage. This provides for losses caused by power outages on or off premises with the following language: “power outage,” meaning change in temperature or humidity resulting from complete or partial interruption of electrical power, either on or off the described premises, due to conditions beyond your control. Power outage is a common and significant threat to businesses.
One of the lesser-known insurance contracts is one specially designed to cover boilers. Boiler and machinery insurance is a type of casualty insurance covering damage to property of the insured or of others for which the insured may be responsible, and for damages from personal injury or death of any person caused by the explosion or collapse of a boiler. One of the questions that arise is whether there was an “accident” or “accidental breakdown” that is covered under the policy.
These claims are complicated and they often involve the review of both the boiler and machinery policy to determine who is responsible for the loss depending on the facts. It can be an expert-intensive analysis to appropriately navigate the boiler and machinery claim process and get to the recovery phase.