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North East Risk Management

Insurance Definitions

Building Coverage: Coverage for the premises, building structure, the frame of the building.

Commercial General Liability Coverage (Coverage for CGL): This type of coverage provides comprehensive general liability coverage for commercial risks covering all liability exposures such as th ird party claims. Examples, slip and falls due to wet floors, uneven sidewalks, food poisoning, products and uncompleted operations. This type of coverage is to pay for damages to others as a result of the insured’s negligence.

Contents Coverage: This type of coverage is for the insured’s personal business property, such as tables, chairs, coffee machine, stoves, fryers, utensils, in other words all of the equipment that goes into a restaurant and that is not a permanent fixture to the building.

Business Income: Is defined as Time Element Insurance is the generic name given the coverage for consequential losses that are affected by the amount of time a risk (insured) has to be out of operation after a direct loss. Business Income has been defined as Net Income (profit or loss before income tax) the insured would have earned, plus normal continuing expense which include payroll.

Time Element Insurance generally includes the following: 1) Business Income Coverage, 2) Business Income with Extra Expense Coverage, and 3) Leasehold Interest Coverage.

Food Spoilage: This type of coverage will cover the food in the restaurant if it spoils do to a power failure. You can usually choose the amount of coverage you want for this type of insurance. The limits can be $2,000 / $5,000 / $10,000.

Liquor Law Liability: This type of coverage is designed to cover losses due to liquor negligence. The laws vary, but most provide that the owner of an establishment which serves alcoholic beverages is liable for injury or damages caused by an intoxicated person if it can established that the liquor license caused or contributed to the intoxication of the person.

Employee Dishonesty: This type of coverage covers for losses due to an employee’s dishonesty. Example: An employee takes money from the days in cash register, or takes personal belongings from a customer while employed.

Commercial Auto: This type of Coverage covers all vehicles registered under the business name, and especially if they are delivering food to households. This must be specified on the policy or they will not be covered for any losses that occur while deliveries are made. Remember it will cover all vehicles registered under the business name, but if they are being used for deliveries it will not cover the loss if the insurance company is not made aware of this, and sometimes it can be expe nsive if deliveries are being made.

Boiler and Machinery: This type of coverage will cover the refrigerators, coolers, freezers, the boiler of the premises due to mechanical breakdown. This type of coverage can cost anywhere between $350 to $650, and more some times.