Restaurant

What Do We Write?

• Establishments primarily engaged in the retail sale of prepared food and drink for on-premises immediate consumption

• SIC Code 5812

Eligible Restaurants

• Quick Service (Fast Food)• Casual or Family Style Dining• Fine Dining• No Cooking

Ineligible Restaurants

• Bars and taverns, including sports bars, and institutional food preparation. Any other establishment where the primary focus is other than food service.

• Casinos, Caterers, Concession Stands, Dinner Theatres, Micro Breweries, Night Clubs, Sports Bars, Taverns

Ineligible Restaurants

• Restaurants which have cover charges, bouncers, DJ’s, bands or dance floors which exceed 150 square feet.

• Any restaurant with more than an incidental game exposure. For example: video arcades, multiple pool tables, dart boards, or rides are ineligible exposures. (See specific state issues section.)

Ineligible Restaurants

• Restaurants or delis with brewery on site are submit for approval. Farmers will consider restaurants that have an incidental brewing exposure. However, Farmers is not a market for brewing operations which operate an incidental restaurant exposure.

• Underwriters will review the restaurant’s financial reports to determine if the risk is eligible.

Ineligible Restaurants

• Existing restaurants with no previous insurance or with periods of time without coverage

• Caterers or banquet halls• Food delivery is excluded on all

restaurants that we write. Farmers will attach endorsement E3313 on all policies (W7920 in Washington)

Coverage Plans Available

• Primary Coverage Endorsement• Premier Coverage Endorsement

Restaurant Primary Package Endorsement

• Provides seven extra coverages not found in the ISO BOP.– Covers property within 1,000 feet of

building– Allows 60 days coverage for property

moved to protect it from damage– Provides an arson conviction reward– Provides $1,000 for Fire Department

Service Charge

Restaurant Primary Package Endorsement (Continued)

• Pays up to $2,500 for fire extinguisher recharge

• Provides $2,500 for damage to customer’s property

• Covers newly acquired property up to $250,000 in value

• Pays up to $1,000 for claims expenses incurred while helping settle a claim

Restaurant Premier Package Endorsement

• Provides twenty coverages not provided by the basic ISO BOP.– Covers property within 1,000 feet of building– Allows 60 days coverage for property moved

to protect it from damage– Provides an arson coverage reward– Pays up to $10,000 for fire extinguisher

recharge expense– Provides Franchise Restaurants Food Borne

Illness Coverage

Restaurant Premier Package Endorsement (Continued)

• Provides $1,000 lock replacement coverage• Provides brands and labels coverage• Provides $10,000 coverage for back-up of

sewers and drains• Provides blanket coverage for personal

property at two or more described locations

• Provides $25,000 Excess Spoilage coverage

Restaurant Premier Package Endorsement (Continued)

• Provides $10,000 for damage to customer’s property

• Pays $250,000 for newly acquired personal property

• Pays $500,000 for newly acquired or constructed buildings

• Provides $10,000 Special Computer Coverage

• Provides Equipment Breakdown Coverage

Restaurant Premier Package Endorsement (Continued)• Pays up to $5,000 for claims expenses

incurred while assisting Farmers in adjusting a claim

• Removes the 72 hour waiting period for business income and extra expense.

• Provides business income from dependent properties (Such as a food supplier) or from interruption of power

• Provides Outdoor sign coverage• Provides earthquake sprinkler leakage

coverage

Optional Endorsements

• Contamination Shutdown– Provides up to $50,000 coverage for loss

of income as the result of a shut down ordered by the board of health or other governmental authorities because of actual or suspected contamination (e.g. hepatitis) at the restaurant premises. Also provides for up to $50,000 to cover sanitation and cleaning of contaminated equipment and for inoculations.

Optional Endorsements

• Food Borne Illness• Available for franchise restaurants that

have selected the Premier Package endorsement. Provides coverage for loss of Business Income due to media publication or announcement of food contamination at the insured’s restaurant or a restaurant of the same trade name or operation.

Optional Endorsements

• Utility Services--Time Element– An optional coverage on the Primary

Package, $10,000 coverage is included in the Premier Package. Provides coverage for the loss of business income or extra expense caused by the interruption of water supply, communication or power supply services to the described premises. An eight-hour deductible applies.

Optional Endorsements

• Liquor Liability– Covers the amount the insured is legally

obligated to pay as damages for injury arising out of the selling of alcoholic beverages from the insured’s location (subject to policy exclusions). Coverage is written for limits up to $1,000,000. Limits may not exceed the General Liability limit, or be less than those required by state statute.

Optional Endorsements

• Employee Benefits Liability Coverage– Covers the amount the insured is legally

obligated to pay as a result of making errors in the administration of any employee benefits program. Coverage applies after a $1,000 deductible. This coverage is written on a claims made basis, which means that all covered events must take place and the claim must be reported during the policy term for coverage to apply.

Three Company Marketing

• Three Company Marketing– Designed to achieve proper pricing on

each policy, to make a positive contribution to surplus, and to be competitive in the marketplace. This plan has various eligibility requirements which determine whether the risk may be written in Mid-Century Insurance Company, Truck Insurance Company, or Farmers Insurance Exchange.

Mid-Century

• Mid-Century– Risks that represent the lowest potential

for severe losses and the highest probability of underwriting gain will be eligible for placement in Mid-Century Insurance Company.

Truck Insurance Exchange

• Truck Insurance Exchange– Risks which do not meet the requirements

of for Mid-Century placement may be eligible for placement in the Truck Insurance Exchange.

Farmers Insurance Exchange

• Farmers Insurance Exchange– Those acceptable quality risks that do not

meet the guidelines of the Mid-Century or Truck Insurance Companies, but otherwise meet underwriting requirements will be eligible for coverage in Farmers Insurance Exchange.

Company Placement

• Company Placement– To determine the appropriate company

placement, the following characteristics should be evaluated:• Restaurant Type• Business experience• Premium Size (Before application of

credits)

Restaurant Type

• Ultra Preferred– Franchise or Fine Dining, or five or more

locations owned by an individual or business

• Preferred – Other than franchise or fine dining, less

than five locations

• Farmers– Other than franchise or fine dining, less

than five locations

Experience in Business Requirement

• Ultra Preferred--Not applicable if fine dining, or five or more locations

• Preferred--Three years same ownership/management

• Farmers--New ventures acceptable

Qualifying Premium

• Qualifying Premium– Ultra Preferred $2,500– Preferred $2,500– Farmers $ No Minimum

Characteristics of Desirable Restaurants

• Same ownership for three years• Personal involvement of the insured

in day-to-day operations• Same ownership and management

team for at least one year• Dun & Bradstreet report that verifies

sound financial condition and a positive cash flow

Characteristics of Desirable Restaurants (Continued)• Has modern, well maintained equipment

which will limit loss exposure and insure patron and employee safety

• Has strong safety practices in place, including regular self inspections as well as employee safety training and drills

• Has an overall loss ratio less than 50%

Characteristics of Desirable Restaurants (Continued)• Has a liquor liability control program and

a strictly enforced patron ID check procedure in place (Where liquor is served)

• Provides emergency lighting if seating capacity exceeds 50. Interior hazards are controlled by use of contrasting colors, signs and directional lighting.

• Has exits clearly identified and easily accessible

Characteristics of Desirable Restaurants (Continued)• Has well-lit, easily accessible

entryways and parking facilities. Parking facilities are paved, well maintained and free of ice and snow. Any obstruction such as standards, car stops or speed bumps are clearly marked.

Characteristics of Desirable Restaurants (Continued)• Is equipped with an automatic fire

suppression system which at a minimum covers all grills, open-flame stoves, and deep fat fryers. The suppression system has a semi-annual service contract. The hood and ducts are on a quarterly service/cleaning contract. Meets UL300 standards (at a minimum) if cooking equipment is made in 1994 or newer and if vegetable oil is used in deep fat fryer(s).

Characteristics of Desirable Restaurants (Continued)• Has fire extinguishers available in

kitchen and restaurant seating areas based on requirements set forth by the current “National Fire Protection Association Life Safety Codes.”

Characteristics of Desirable Restaurants (Continued)• Has a nightly housekeeping process

that:– Checks and removes excess buildup of

debris– Extinguishes all candles and properly

disposes of ash tray contents– Properly disposes of trash nightly

Characteristics of Desirable Restaurants (Continued)• Loss Prevention Measures

– Makes frequent deposits of cash– Has a regular maintenance program for

all refrigeration and air conditioning equipment

Premium Modification Plans (IRPMs)

• Farmers has developed a number of premium modification plans to price our products fairly and competitively. In this section we will review:– Individual Risk Premium Modification Plan

Profitability Discount– Commercial Auto Package Discount– Premium Size Discount– Workers Compensation account completion

credit (Nevada only)

Characteristics Considered

• Management• Employees• Premises• Protection• Entertainment (if any)