Restaurant

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Restaurant
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What Do We Write?

• Establishments primarily engaged in the retail
  sale of prepared food and drink for on-premises
  immediate consumption
• SIC Code 5812

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Eligible Restaurants

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

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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

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Ineligible Restaurants

• Restaurants which have cover charges, bouncers,
  DJs, 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.)

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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 restaurants
  financial reports to determine if the risk is
  eligible.

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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)

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Coverage Plans Available

• Primary Coverage Endorsement
• Premier Coverage Endorsement

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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

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Restaurant Primary Package Endorsement (Continued)

• Pays up to 2,500 for fire extinguisher recharge
• Provides 2,500 for damage to customers 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

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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

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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

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Restaurant Premier Package Endorsement (Continued)

• Provides 10,000 for damage to customers
  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

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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

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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.

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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 insureds restaurant or a
  restaurant of the same trade name or operation.

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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.

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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 insureds 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.

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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.

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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.

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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.

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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.

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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.

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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)

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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

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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

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Qualifying Premium

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

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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

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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

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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

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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.

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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).

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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.

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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

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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

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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)

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Characteristics Considered

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