Restaurant and Hospitality Insurance Coverage

Business owners in the restaurant and hospitality industry often need to juggle many areas of their businesses in order to keep their customers satisfied and loyal. Like any intricate machine, the mechanics of a restaurant's daily operations can quickly be derailed by a small problem which can lead to a massive drop in income in a surprisingly short time.

Equipment Breakdown Insurance, once only of concern to industrialists and other manufacturers, is fast becoming a staple of good restaurant and hospitality insurance coverage plans. For many restaurants and related businesses, equipment breakdown insurance can be an absolutely crucial aspect of their peace of mind and financial security.

With the degree of automation and interconnectivity found in modern commercial kitchens, even minor problems are loaded with the potential to seriously disrupt business and cut into profits. Something as simple as kitchen exhaust fans becoming unbalanced can quickly spiral into a massive problem. For example, the unbalanced fans can shake, causing the bearings to burn out which in turn causes the fans to shut down. In a busy commercial kitchen, exhaust fans are often of major importance, and the breakdown of a fan can allow the kitchen's temperature to rise to levels that create unsafe working conditions. Until a contractor can be brought in to make repairs, which can take anywhere from hours to days, a kitchen with no fans may need to be temporarily closed down out of concern for employee safety. With no kitchen, the restaurant would obviously have to temporarily close down as well, hemorrhaging profits until repairs could be made.

Fortunately, if a policy includes equipment breakdown insurance, the entire closed kitchen debacle can be easily salvaged. Equipment breakdown insurance covers not only the cost of repairing the defective equipment; it also covers any loss of income caused by the breakdown.

Insurance shoppers should be wary of the fact that the majority of commercial property insurance plans do not automatically pay for accidental equipment breakdowns or other technical difficulties, including electrical troubles. More importantly, they don't automatically cover any loss of income brought on by these events. In order to cover these situations, a business owner's commercial insurance policy should include equipment breakdown insurance.

Equipment breakdown coverage plans are now tailored to meet the needs of the restaurant and hospitality industries by focusing on things like mechanical equipment malfunctions, power surges, and short circuits, and their potential negative impact on business. This includes the previously mentioned costs such as repairs and lost income due to equipment breakdown, as well as costs racked up by renting substitute equipment while repairs are being made and the loss of food products due to spoilage in cases of refrigerator and freezer malfunctions.

The problems listed above are typically not covered by property insurance, which is why it's useful to have your property insurance and equipment breakdown insurance drafted in conjunction with each other in order to fill in any gaps and provide the best possible protection for all areas of your business.

In addition to covering the mechanical aspects of the kitchen in case of an emergency, equipment breakdown insurance can also be extended to any device deemed important to the successful day-to-day operations of a restaurant. In addition to grills, stoves, fans, dishwashers, and refrigeration units, things like restaurant air conditioners and heaters are also covered, as the lack of air conditioning or heat in certain weather can easily drive customers away.

Even a restaurant's computer networks can be covered with equipment breakdown policies. Things like electronic point-of-sale systems, inventory scanners, cash registers, and employee time clocks play an important role when it comes to effectively managing business. Equipment breakdown insurance allows restaurateurs to not only replace any of this equipment at no cost if it malfunctions, but also to recoup any lost profits that occurred as a result.

As an example of equipment breakdown insurance's importance, consider this situation.
A mid-sized restaurant that is forced to shut down for a period of two days due to a electrical malfunction in the kitchen can easily lose in the neighborhood of $25,000 income during that time. With an equipment breakdown insurance policy, that $25,000 is assessed as a business interruption cost, and is repaid to the owner. In light of that information, a business owner really can't afford not to opt for this kind of policy.

Getting Started

If you own a restaurant or related business and you're not sure about your level of protection, your first step should be to review your property insurance and determine if it already includes equipment breakdown insurance. If not, contact your insurance agent and try to find a policy that offers the broadest range of coverage. Double check to make sure that any and all equipment necessary to carry out daily business is covered. Depending on your insurance agent, equipment breakdown insurance can either be added to your existing plan or purchased as a separate policy.

Remember, your restaurant's kitchen equipment and other operating devices play a critical role in maintaining your customers' satisfaction. By protecting your business investment with equipment breakdown insurance, you can be sure that you're investing in your own future.Balcos Insurance is committed to ensuring their employees are the most professional, friendly and trustworthy insurance agents in the field. All Balcos Insurance agents have pledged to make sure you understand your washington car insurance coverage options and provide you with an insurance proposal that has been personalized to your unique needs. Our experts are committed to getting you the best value for your dollar and the most complete insurance coverage possible.
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