Everything You Need to Know About Insuring Restaurants in Alabama
Shopping for restaurant insurance in Alabama is challenging if you don’t first know your exposures. There are many different types of insurance available, but it’s easy to get overwhelmed when you don’t know what you really need or don’t need. Below are a few of the most common exposures we see restaurants experiencing. One suggestion is to jot down your most important unique risks (in terms of likelihood and severity) before you start shopping insurance coverage. This will allow you to prioritize risks and decide whether certain types of coverage are worth the costs.
Finally, don’t underestimate the value of a good insurance agent. Selecting the right one can make a big difference. Also, our Ultimate Guide to Buying the Right Comprehensive Business Insurance will help you maximize savings and coverage in the shopping process.
The most common exposures faced by restaurants in Alabama are as follows:
- Slip & fall accidents
- Employee injuries
- Kitchen fires
- Food-borne illness
- Over-served patrons (alcohol)
- Employee Lawsuits (e.g. discrimination, harassment, etc.)
- Auto accidents (e.g. food delivery)
Once you understand your restaurants biggest threats, you’ll need to know about the coverage you can buy. There are a few critical coverage options you should know about. Below is a list of coverage which can frequently be carved in or out of policies. For a list of property and casualty insurance policy types, check out our Commercial Insurance Solutions page.
- Fire, lightning, wind/hail, smoke, water, etc.
- Ordinance or Law – increased costs after a loss due to updated building code enforcements
- Mechanical breakdown
- Theft (by employees or others)
- Accounts Receivable recovery expenses
- Business Interruption – loss of income and increased expenses following a loss
- Funds Transfer Fraud – outside parties who gain electronic access to your financial accounts
- Cyber Crime – scammers who trick your employees or bookkeeper into transferring funds through the use of “social engineering“
- Bodily injury or property damage to others – most commonly protecting for slip and fall accidents or food borne illness
- Personal and advertising injury – liability for slander or advertising copyright infringements are most likely exposures addressed with this coverage
- Liquor liability – if you sell alcohol, this is required by ABC Board at $100K limit, but we recommend buying higher limits when possible
- Employee injuries – work comp is the solution and is required by law if you have five or more employees in Alabama
- Auto liability – for your owned and non-owned autos – do not forget the exposures to your business if employees get in an accident while driving their autos on company errands
- Employment Practices Liability – employee claims of discrimination, wrongful termination, harassment, etc. – these policies can vary widely on coverage, but the most important aspects are a broad definition of “wrongful act” and inclusion of wage & hour claims
- Privacy and Data Breach (i.e. “Cyber) – financial or other personal information stored in your database could put your restaurant at risk if the information were ever breached by outside parties, including PCI fines and penalties
- Leased Labor – make sure you carve in coverage for any workers you hire through leasing agencies because work comp and general liability insurance policies do not provide any protection unless they are deliberately altered
- Employee Benefits Liability – coverage for negligence resulting from administration of employee benefits
- Fiduciary Liability – if you offer retirement plans, this is insurance to protect you against liabilities caused by your actions as Fiduciary
- Garagekeepers – if you offer valet services, then this will protect you for damage to your customer’s autos
- Punitive Damages – in AL, punitive damages can be up to 3x of general damages and they are “insurable” yet many insurers exclude coverage, so try to buy liability policies that include punitive damages
The most competitive insurance carriers for restaurant insurance in Alabama are listed below. These are considered competitive based on their rates and broad coverage availability. Many of these carriers have policies specifically designed for restaurant and food service businesses.
Also, it’s worthwhile to first give a brief overview of how insurance policies are distributed to consumers (you!):
- Insurance Agents – Licensed agents who sell insurance policies to individuals and businesses.
- Insurance Carriers – These are the “insurance company” who actually underwrite and assume the financial risk of writing insurance policies. Sometimes they sell direct to the public, but often sell through Independent Insurance Agents.
- Wholesale Brokers (or MGAs) – Intermediaries who distribute Insurance Carrier policies via Independent Insurance Agents. Sometimes there are insurance carriers who only sell through Wholesalers, so your agent may present quotes for policies sold through these intermediaries.
- Self Insured Funds – Similar to insurance companies and function almost exactly like them, but usually are designed for work comp within a state. They are very popular in Alabama because their financial strength is solid and their rates are very competitive.
All lines of insurance coverage (Insurance Carriers):
All lines of insurance coverage (Wholesalers):
Work Comp only (in Alabama, the self-insured funds provide very competitive work comp rates):