By Michael P. LaMarca
Imagine this: Everything you have built in your business is gone. All your blood, sweat, tears—not to mention all the money you invested—have been lost. Worse yet, it has been taken away from you because of someone else’s actions. This scenario might be difficult to imagine, but, unfortunately, it is far too often a reality for many business owners.
Pizza shop owners are often so hyperfocused on their day-to-day operations that they forget they face many other pitfalls that come with running a business in today’s litigious world. Utterly consumed with fundamental tasks—finding employees and creating unique menus—they fail to protect their business, their intellectual property, their web domains and social media handles.
But there are solutions to each of these concerns. First, you need to make sure you and your business are covered with the proper insurance policies. A common misperception is that your general liability policy—which I call your “slip-and-fall policy”—covers any claim against you and your business. The truth is, your general liability policy is very limited in its protection. In addition to that one, which you most likely have, there are several other business insurance options that you need to be aware of. Let’s take a closer look at all of the key policies you’ll need to protect your pizza business.
General liability policy (GL): This one protects against third-party claims of bodily injury, property damage and advertising injuries (libel/slander). This is the most common policy and the one your landlord probably requires. But it’s a very limited policy, and it really only protects you if an injury occurs on your property. Business owners often believe that this policy will protect them across the board, but it does not.
Business owners or directors and officers policy (D&O): I refer to this one as the “I can sleep at night policy,” because it protects the directors and upper management of your company against legal fees and financial losses resulting from business decisions. Anyone can come after you in court for anything, and this policy protects you—more or less—from those kinds of claims. It just might be the most important policy you can get.
Employment practices liability (EPLI): If the business owners policy is the most important one, EPLI is a very close second. This policy protects your business against employee claims of wrongful termination, discrimination, harassment or retaliation. Again, it will cover any legal claims for which any employee would come after you. This policy typically covers any damages as well as legal fees. It does have some limitations, however, such as minimum-wage claims.
Cyber liability: This policy is crucial for doing business in today’s world—for any businesses that manage networks, process credit cards or store client data. Cyber liability helps cover costs from data breaches and ransomware attacks. A potential cyber liability claim can carry penalties or damages in the tens of thousands. I guarantee there is not one person reading this article who is well-versed enough in today’s technology to be able to forego having this coverage. It’s a must nowadays. Cyber attacks can come from anywhere at any time, and they will usually go undetected until it is too late.
Non-owned auto liability: This policy covers you when you have workers making deliveries for you in their own cars. It provides physical damage and liability protection for any cars, trucks or vans used primarily for business operations. Drivers still need to carry their own auto insurance policy so that their policy can respond to a claim while they’re on the road for you. In the meantime, non-owned auto liability coverage provides additional protection for your business.
Commercial umbrella insurance: This is the “ultimate sleep at night policy.” It extends the payout limits of your existing primary policies (like general liability or commercial auto) when a catastrophic claim exceeds those caps or limits. For example, if you get sued for $1 million and your coverage is set at $500,000, this coverage will fill in those gaps.
Having these policies still won’t provide 100% foolproof protection, and there are many times when a business owner’s actions could nullify any coverage. But sometimes mistakes or accidents happen, and if you try to run a good, safe, honest business, these policies will keep you protected. If you do anything this month, call your insurance agent and ask, “Am I fully protected?”
Michael LaMarca is owner/CEO of Master Pizza Franchise Group in Cleveland. To engage with him directly, follow him at @michaelplamarca on Instagram and Facebook.
