Bar and restaurant owners who carry standard hospitality insurance may mistakenly assume that they're sufficiently covered. While minimum coverage options do offer some protection, these policies may only cover a portion of costs associated with liability incidents. This illustrates the benefit of excess liability in the hospitality industry - especially in establishments that serve alcohol and face increased exposure. If you're wondering why the hospitality industry needs excess liability, consider the following four factors that prove it's more than just a good idea. It's essential for any bar or restaurant that requires coverage for standard liabilities.
When considering coverage limits, you should encourage your clients to consider the potential expense associated with a liability incident. If your client operates their business in a state with dram shop laws, for example, they should estimate the financial liability that could result from an accident and its ensuing damages. It's likely that their existing coverage won't offer adequate protection against these expenses, thus proving the necessity of excess liability coverage.
Excess liability policies also benefit your client's establishment by strengthening their existing coverage. This type of coverage can function as a liability safety net, protecting bars and restaurants from the many exposures that emerge throughout everyday business. A standard policy may cover bodily injury, property damage, or liquor liability, but the limits for these exposures are often low. By adding an excess liability policy to this coverage, your clients can enjoy peace of mind knowing that they're protected against liability - even if it exceeds the limits of their initial insurance.
Anybody in the hospitality industry can tell you that there are many risks associated with operating a restaurant. A surprising benefit of excess liability coverage is its ability to incentivize risk reduction. Some research suggests that establishments that carry more insurance coverage are also more effective at mitigating common liabilities. This correlation indicates that excess liability coverage could help bars and restaurants minimize the occurrence of liabilities in the first place. To achieve this, establishment owners should make efforts to train staff in risk avoidance and ensure that all employees understand basic restaurant safety principles.
Perhaps one of the greatest risks facing restaurant owners is the potential threat to assets that may emerge if their insurance coverage is insufficient. If an incident occurs and it results in a claim or litigation that exceeds the policy's limits, an owner could be the subject of litigation seeking damages from their personal assets. This is a situation that anybody would want to avoid, of course, and the additional coverage provided by an excess liability policy can ensure that your clients' assets are safe.
At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom tailored solutions to meet any venue's specific needs. For more information, contact our knowledgeable experts today at (888) 359-8390.
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