The ‘Life-Saver’ Coverage
Your bar & grill establishment is doing well after working 5 tough years to ‘win over’ the locals.
One day, a kitchen fire gets out of control and your restaurant is going to be ‘out of service’ for at least 6-12 months.
You’ve toiled night-and-day to establish yourself…and now you have to scrap everything and start over?
That’s when you remember about ‘business interruption insurance’.
Business Interruption Insurance – Defined
If, due to a ‘covered cause of loss’ (fire, theft, windstorm, etc), your restaurant / bar is unable to operate and generate revenue, this coverage keeps the business going…paying for things like relocation, rent, and payroll.
If a restaurant / bar is shutdown, and the incident is NOT due to a ‘covered cause of loss’ (ie – pest infestation), ‘business interruption insurance’ would not apply.
Add’l types of ‘Business Interruption’
In addition to the ‘fire’ example above, there are other ‘business interruption’ situations that can be insured…
|Contingent Business Interruption
A major hurricane comes through the region, but your restaurant is spared. The next day you get a call from your main food vendor saying they can’t make any deliveries because of the storm. This coverage pays for your restaurant’s lost income.
|Utility Services – Time Element Endorsement
Hoodlums vandalize and tear down a power-system that provides electricity to your restaurant. You don’t have power for 4 days. This coverage pays for your restaurant’s lost income over that time.
|Ordinance or Law – Increased Period of Restoration Endorsement
A fire destroys your restaurant. Because your builidng is older (built in 1950’s), it takes additional time (and lost income) to develop plans to bring it up to ‘code’ (ie – ADA compliance). This coverage pays for your restaurant’s lost income related to this extra time.
|Food Contamination Endorsement
A government authority shuts down your restaurant / bar due to a suspicion of food contamination. This coverage pays for lost income for the time needed to restore the operations.
Just because your policy shows ‘business interruption’, doesn’t mean that you have all these endorsement ‘bells and whistles’.
Often times these need to be specifically added at the request of the insured.
You can easily see if you have these endorsements on your own policy by looking at the ‘schedule of forms’.