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					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)

				
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posted:4/8/2013
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