Bar and restaurant claims can present unique challenges compared to other commercial spaces, like churches, office buildings, and multi-family housing. Older bars and restaurants are typically equipped with big, heavy, and well-worn appliances, as well as outdated point-of-sale and audio/video systems.
After years of commercial abuse, these items can be in rough shape. Understandably, after a loss, policyholders may be inclined to seek out upgraded equipment or resist repair attempts during the claims process. But is replacement always necessary? Can the equipment be restored to pre-loss condition? A thorough on-site investigation of the claimed items can help answer these questions.
In this blog post, we'll reveal the top 5 best practices for handling bar and restaurant claims, as well as detail a real-life Zap Consulting case study that demonstrates the importance of an on-site damage assessment for bar and restaurant claims, as well as a variety of commercial spaces. Let's get cooking!
Best Practice #1: Identify a knowledgeable point of contact.
This is a big one. For any commercial claim, identifying a point of contact who is knowledgeable about the loss location, loss event, and claimed items, is ESSENTIAL. With sprawling claimed item inventories and multiple service providers from different industries, things can get complicated, fast. A well-equipped point of contact for the claim can help streamline the claim investigation process and mitigate the risk of miscommunication and unnecessary delays.
Best Practice #2: Get a clear inventory of items.
Seems simple right? Wrong. With bar and restaurant claims, nothing is ever simple. It can be challenging for policyholders to come up with a clear inventory of items through no fault of their own! These spaces include a lot of items! Not only do these commercial claims involve many items, but they can also vary widely in type, design, and industry.
The policyholder will want to take a look at the major kitchen appliances, including ranges, custom-built hoods, slicers, refrigeration units, and tap systems. Of course, many of these locations are equipped with security camera systems and all-important point-of-sale equipment. Extra amenities like arcade games, televisions, and jukeboxes are also not uncommon. Establishing a clear and complete inventory of items with possible damage from the loss is key to getting started with a bar or restaurant claim.
Best Practice #3: Understand the loss event.
Was the location impacted by a severe storm or hurricane? Did a fire start in the kitchen? Maybe the location was robbed and ransacked or experienced a burst pipe? Both the insured and the claims professional need a clear understanding of the loss event to properly evaluate the claim. Be sure to document the loss event details each time the story is described by the insured or point of contact. When visiting the loss location, take note of potential loss hot spots like the kitchen or bar area. For fire, water, or impact damage claims, where are the claimed items in relation to the source of the damage? Were any reports filed by other entities documenting the loss event? Gathering these details will help paint a full and complete picture of the loss event and ultimately assist in determining what is owed to the insured to restore the property to pre-loss condition.
Best Practice #4: Evaluate initial repair or replacement documentation.
For many commercial locations, particularly bars, and restaurants, time is money. After a loss, the policyholder often reaches out to their vendors and service providers to get the problems resolved, fast! This frequently occurs when point-of-sale systems and refrigeration units have suspected damage. Reviewing these initial estimates or proposals is an important step in understanding the potential cost of the claim, as well as the quality of the service providers you'll need to correspond with. The insured or point of contact should be sure to pass along any repair or replacement proposals, invoices, or receipts to the insurance carrier and claim investigation team.
Best Practice #5: Fully inspect the damage.
For claims professionals, this should be the easiest step when handling a bar or restaurant claim. Assign an experienced and skilled vendor to properly investigate the claimed damages to determine which items are damaged from the covered loss and what the cost will be to restore the insured to pre-loss condition. Is the kitchen equipment functioning properly? Is the POS system responsive to normal business operations? Can the customers imbibe safely from the tap system and enjoy a round of skeeball? An on-site inspection will assist in understanding the scope of damage and ultimately the cost of the claim for the carrier.
Case Study: “Throw in the kitchen sink, too!”
Lightning Damage to Restaurant Equipment
At a beachy bar and grill, the owners were reasonably displeased to discover several damaged items in the kitchen and dance club area of their establishment after a severe thunderstorm rolled through the small town the evening before.
From a three-thousand-dollar meat slicer and commercial microwave to a fog machine and security camera system, the damage was widespread across the commercial location; however, were all items damaged from the surge? Were all the items damaged beyond repair? What was the actual cost to restore the policyholder to pre-loss condition?
After a thorough on-site evaluation, Zap Consulting determined 34% of the claimed items sustained no damage...
Zap Consulting was called in to assess the damage, verify the cause of loss, and determine if the claimed items could be repaired or required replacement.
After a thorough on-site evaluation, Zap Consulting determined 34% of the claimed items sustained no damage whatsoever and required no repairs. Two major appliances were confirmed damaged; however, both appliances were able to be repaired, saving thousands.
Zap Consulting’s damage assessment and final report ultimately saved the carrier 55% and saved the policyholder weeks of lost revenue as they knew exactly how to move forward after the loss.
Conclusion
Key takeaway? In commercial spaces like bars and restaurants, the insured has a LOT of stuff. This case alone saw arcade games, point-of-sale systems, multiple refrigeration systems, and receipt printers, you name it! When the insured has so many items to claim, a thorough on-site investigation is essential to get an accurate picture of the loss as well as determine the figure actually owed to the policyholder.
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