Pizza Today June 2021 - 63

he cannot imagine a policy without a
virus exclusion.
" It's an ultimate fortress for the
industry, " Scaramastra says, adding that
while some insurers offer pandemicrelated insurance, such coverage largely
remains cost prohibitive. " I don't see a
viable road for the insurance industry to
willingly take on all of that risk. "
Insurers are also trying to wrap
their arms around restaurants' various
pandemic-era pivots, such as meal kits,
curbside pickup, selling liquor with
off-premises orders, off-site dinners,
online cooking courses and, of course,
delivery, which surged over the last year.
For restaurants running an in-house
delivery service, the associated liabilities
and necessary insurance can be costly,
a reality that leads many to outsource
delivery.
" These pivots are all potential new
exposures that could change coverage
and even bring additional premiums to
the table, " says Rosanne Boik of Chicago-based Kamm Insurance Group.
Additionally, Boik, who has been
working with restaurants on insurance
issues for more than two decades, is
urging many of her clients to consider
purchasing employment practices liability (EPL), which covers a business for
sexual harassment, wrongful termination and discrimination among other
charges.
" The industry is seeing wrongful
termination claims go through the roof
due to employees who were let go during the pandemic and not brought back,
alleging that they were not rehired as
a result of one of these charges, " Boik
says, adding that cyber insurance is
another additional coverage area worth
exploring given many restaurants'
increasing reliance on digital technologies and the ongoing, global work of
nefarious actors.
Boik also notes that insurance rates,
which were climbing before
COVID-19, continue to rise given the
accelerating number of claims as well as
mounting lawsuits against insurers tied

to business interruption.
" In some cases, we're seeing doubledigit rate increases, " Boik says.
To keep costs down and protections
high in today's climate, restaurants
should:
Understand coverage - and who's
providing it. Scaramastra regularly
encounters " sophisticated businesses "
who simply do not understand the
coverage they purchased, particularly so
with business interruption insurance,
while many others failed to carefully vet
their insurance provider.
" You're buying a series of promises
from a company to take care of you if
something goes awry, so you don't want
to deal with someone simply looking
for an excuse not to pay, " he says.
Control the controllable risks.
Look to safety issues of insurance, such
as loss controls, slip and falls and
kitchen incidents, and establish a
culture of safety in the restaurant to
minimize claims. If there are multiple
incidents of cuts in the kitchen, for
example, consider a staff training session on responsible knife use.
" Remember that employees aren't
thinking about the boss' insurance
premiums, " Boik says, " but the boss can
and should. "
Adopt a careful filing calculus.
Boik suggests pursuing higher deductibles on property to minimize premium
increases and to then be mindful of filing claims that might trigger premium
increases.
" Let's say you have a $1,000 deductible and then $1,200 in awning damage.
Is it worth it to file a claim for $200 if
your premium might go up? " she asks.
" Insurance is typically there for big,
catastrophic claims, so it might be wise
to keep the focus there if you want to
save on the premiums. "
Lean on a trusted broker. Much
like having the right accountant or

attorney, the right insurance agent,
particularly one familiar with the
restaurant industry, can offer thoughtful
counsel on appropriate coverage that
addresses common industry risks.
" It's a good idea to think about
things you're worried about, hear
what the broker thinks you should be
considering and then have a thoughtful
exchange about the products that
address risk, " Scaramastra says. n
DANIEL P. SMITH Chicago-based
writer has covered business issues and best
practices for a variety of trade publications,
newspapers, and magazines.

IS BUSINESS
INTERRUPTION
INSURANCE REALLY
NECESSARY?
As COVID-19 forced restaurant closures across much of the U.S., many
owners were surprised to learn that
their business interruption insurance
offered no relief.
" Business interruption insurance has
to be triggered by a direct physical
loss of property. If there's no physical
damage, then there's no business
interruption insurance, " explains
veteran restaurant insurance agent
Rosanne Boik.
As restaurants learned of this,
incredulously discovering that their
business interruption insurance
did not cover the greatest business
disruption of the last century, many
responded with lawsuits. While courts
across the country continue hearing
cases, many operators question the
validity of business interruption insurance altogether.
Boik, however, continues urging her
clients to retain business interruption
insurance.
" You want coverage in place for incidents that are included in your policy
form, such as storm damage, a fire or
a car crashing into the restaurant, "
she says. " That's when that coverage
kicks in and can help immensely. "

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