Restaurants Have Unique Business Losses
Restaurants have unique losses that occur after a disaster hits. Policies differ in the coverages they provide. Some cover food spoilage, loss of revenues, business interruption coverage which provides net profits, and potential for coverage relating to equipment breakdown. Each policy may have different limits based upon damages incurred including inventory, food, and other coverages. Insurance companies make these intentionally complex so that the business owner doesn’t have time to pursue them all. The Ross Legal Group can help make sense of it all and tell you what your rights are. Please contact us today for a free policy review.
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 Business Income Loss
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 of 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 outages are a common and significant threat to businesses.
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