Have Past Restaurant Insurance Claims? Here’s How You Can Still Get a Decent Rate

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Have Past Restaurant Insurance Claims? Here’s How You Can Still Get a Decent Rate

Restaurant insurance is an important business cost for restaurants and bars. The insurance available to purchase helps cover a lot of different accidents and scenarios. Restaurant owners are wise to seek insurance that helps to cover many common problems in the industry, which can add up to create big financial problems.

When it comes to insurance, the price of a policy is important. It is factored into business costs and has a direct effect on the bottom line. Many owners try to never make a claim because they are worried about how that will reflect on the monthly premiums they pay.

How accurate is this belief though? For restaurant owners who have made a claim on their insurance, does their premium go up? If so, how much? To better understand these questions, let’s take a closer look at how pricing works for restaurant insurance coverage.

How Restaurant Insurance Pricing Works

Restaurant and bar insurance is typically purchased according to specific needs. Some of the different policies available to purchase are

  • General liability
  • Commercial property coverage
  • Worker’s compensation
  • Liquor liability

Each of these provides different coverage, such as:

  • Injuries to employees and customers like falls, burns, or cuts
  • Liability attached to food-borne illnesses
  • Property and inventory damage or loss
  • Interruptions to business
  • Liability related to serving alcohol

The largest factor in determining monthly premium costs is which policies are included. Knowing which situations are likely to happen in your restaurant and bar will help determine what coverage is needed. Other factors that can influence the price of a policy are location, times of business operations, how long you have been in business, and the equipment used.

Insurance is not just there in case something catastrophic happens, though it is good for that. It is meant to be used to help manage specific situations that can quickly turn costly. When a situation requires filing a claim with the insurance company, what happens next?

Making a Claim

Restaurant owners pay into insurance policies all the time, but do not always file a claim to get financial assistance. To make a claim, contact your insurance company and get a case started. Many times, the insurance will ask for specific numbers, receipts, and bills to determine what is covered and how much money to give the business.

Making a claim against insurance has traditionally caused an increase in premium pricing. However, it depends on the situation. Not all insurance companies will penalize business owners for making a claim on their policy. It depends a lot on what the claim is for and how many restaurant insurance claims have been filed in the past.

A better way to understand this is to compare the cost of the premium to a savings account. When restaurant owners spend a lot of time paying into it, making a claim or withdrawal here and there is not unreasonable. Business owners that continually file accidents are not going to have the funds required to cover all their restaurant insurance claims. To offset this cost, the premium price must go up.

In other words, filing a claim will not always cause your restaurant insurance premiums to increase.

There are many times that restaurant owners opt to not file a claim and cover the costs of a situation on their own. For example, if a customer slips and falls in a restaurant and requires medical care, it may cost the restaurant $5,000 for medical costs. If the restaurant owner files a claim, the insurance company will pay the $5,000 but may raise the monthly premium by $100. Knowing this can help the restaurant owner decide whether to file a claim or just pay the bill themselves.

How to Still Get a Decent Rate

If you have filed an insurance claim, or even multiple restaurant insurance claims, in the past and your premiums have gone up, it does not mean you are doomed forever. There are still several strategies you can use to get decent restaurant insurance rates. Here are the top three ways you can control the premium costs.

First, make some changes to your policies. Many restaurants, bars, and businesses in general get insurance coverage that is above and beyond what they need. If you have been in business a while, you have a better idea on what situations are more likely to happen. Contact an insurance agent to go over all the policies you currently have. Cutting out unnecessary policies or coverage options can help save money. Just a note of caution: by not having insurance, you are opting to cover the costs in the event those incidents happen.

Second, switch restaurant insurance companies. Just like how every insurance company has different prices, each will react to filing claims differently. If one insurance company is going to raise your premium prices significantly, it is worth getting quotes from other companies. Switching can help decrease your restaurant insurance rates and possibly get better coverage.

The third option to getting a decent rate is to wait it out. If you already have the coverage you want and pay the lowest price, it may just be a matter of waiting out the price increase. Some insurance companies will do a temporary increase in premiums. Do not depend on the insurance company to just lower your rate on their own though. Contact them in the future and ask for a better price if you have not filed any claims.

We Can Help

If you are frustrated with your restaurant insurance rates, let us help. Contact us for a quote and we will happily go over coverage options and rates for your specific restaurant needs. We pride ourselves on our high-quality customer service and want to help your business succeed.