Three Insurance Resolutions for 2018

insurance resolutions

For many of us, the new year is a time to reflect and make a resolution to accomplish new goals and fix what we don’t like. Whether it is personal or professional, there is always room for improvement and change.

HUB Insurance Robert Fiorito
Robert Fiorito, HUB Insurance

Starting fresh and taking action to proactively implement the business measures outlined below will help you reduce insurance costs, prevent unnecessary claims and will assist overall at the time of your renewal. Here are three insurance resolutions for 2018:

1) Don’t Pay For Someone Else’s Mistakes, Review All Vendor Contracts:

Common causes of third party liability losses can be traced back to inadequate contracts signed with vendors.  Even with legal counsel involvement, it is common to miss the fine print in the insurance language that ties the two parties together.  Your insurance advisor should be reviewing your vendor contracts to ensure that your liability is contractually transferred to the hired vendor for damages they cause.

Securing a vendor’s certificate of insurance is usually not enough since it’s not considered evidence of coverage. In addition, a vendor may be issued a cancellation while they are performing work at your property.  It’s important to have an indemnification and hold harmless agreement, and for higher risk projects, be named as an ‘additional insured’ on your vendor policy so that you are protected by their coverage.

Your insurance advisor should also be verifying coverage for any exclusions for certain types of work, adequate limits for coverage, and assisting in qualifying the vendor when necessary.

2) Review Your Overall Safety Plan:

M. Tucker July 2018 728×90

As a restaurant owner/manager, demonstrating that you are committed to the safety of your premises, patrons and employees is highly recommended in a number of ways. Having a system to document inspections to identify hazards for items such as fire, emergency response, slips and falls, snow/ice removal, playgrounds, clubhouses, etc. can prevent an injury or property loss from happening.  An inspection checklist can also help your insurance advisor and carrier in potentially defending a claim caused by a plaintiff. In addition, having a formalized safety/risk management plan is viewed very favorably by insurance carriers in terms of premium pricing. Your insurance advisor’s risk consultants and claim advocates are valued partners in helping you prevent claims, and when they do occur, contain the severity.

3) Ensure Protection Against Harassment Claims in Today’s Litigious Environment:

Like most businesses, restaurant and food service companies of any size are vulnerable to claims brought by their employees, former employees or potential employees. In our increasingly litigious society, the threat of a lawsuit hangs over every business transaction, large or small. Even restaurants who adhere to the law at all times are likely be sued by an aggrieved employee or customer at some point. While many suits are groundless, defending employment-related claims can be financially devastating.  If you carry employment practices liability insurance (EPLI), your business has a measure of protection against lawsuits from current, prospective or former employees who allege “wrongful acts” such as discrimination, sexual harassment or wrongful termination.

But what happens if a patron sues you for discrimination or harassment? Are you protected?  Many employers do not realize that they have a gap in their insurance coverage that leaves them vulnerable to discrimination and harassment lawsuits from restaurant patrons, vendors and suppliers.

Standard EPLI policies only provide coverage for lawsuits brought about by employees or prospective employees, and most commercial general liability (CGL) policies specifically exclude coverage for harassment and discrimination. Third Party EPLI fills the gap between these other coverages, providing protection against allegations of wrongful acts made against your restaurant and staff by a third party. Review your existing policy to make sure that you are covered. Your insurance advisor should be looking for the most comprehensive EPLI policy that includes coverage for third party exposures.

Proactivity is Key: The beginning of the year is the best time to tackle these suggestions as it allows them to have ample time to identify, correct and implement enough procedures to make an actual difference with your insurance carriers at time of renewal. Most importantly, work with an insurance advisor that can walk you through these processes and make sure that you are adequately protected and presented in the best possible light to insurers.

Robert Fiorito
Robert Fiorito serves as Vice President with HUB International Northeast, a leading global insurance brokerage, where he specializes in providing insurance services to the restaurant industry. As a 25-year veteran and former restaurateur himself, Bob has worked with a wide array of restaurant and food service businesses, ranging from fast-food chains to upscale, “white tablecloth" dining establishments. Robert can be reached at 212-338-2324 or by email at robert.fiorito@hubinternational.com. For more information on HUB, please visit www.hubinternational.com.