Insurance issues

New Year’s Resolutions:

Hit the lottery
Get thin
AVOID FINANCIAL DISASTER!

I can’t help you with #1 or #2, but I can help with #3.  Here’s six simple things you just gotta do at the start of every year that will help you put your pizzeria on cruise control when it comes to insurance…

Ok campers, I know insurance is not at the top of your New Year’s to-do list. I’d much rather show you how to loose 25lbs. and get 250k in cash, but we all have certain gifts. Mine? Well this is it! Here’s the deal – if you take some time to look over your policies at least once a year you will be in pretty good shape for the rest of the year. I’m going to list a few things I want you to look over. There may be others, but these are the ones on my short list. By now you know that this is not legal advice and I don’t want you to rely only on this article when you make decisions. Be prudent and get local specific help as well.

Check to See Who is Insured

Simple, but true… if you don’t have the right names in item #1 on your policy (Named Insured) you are in for trouble. This is the place in the policy where it spells out just who has rights and duties under the policy. So, get this right. TIP: Be sure that all entities that need insurance are named on your policy. Example: If you own the building personally, YOU must be included.  If your business is a corporation or LLC, THAT entity must be included. If you have a pension fund, THAT entity must be included. Your policy might read something like this:

Joe Smith &/Or Smiths Pizza Inc &/Or The Smith Pizza Inc Pension Fund

Check to See What is Insured and Where it is Insured

If you want the building insured, make sure it’s listed on the policy. If you want your things inside the building insured, do the same thing. Take nothing for granted. Like the “X-Files” motto – TRUST NO ONE. TIP: If you do trade shows or street fairs or anything else that takes your operations and/or property off your premises, make sure that those items/events are listed on your policy as covered. A lot of policies have “gimmies” that add a bunch of small coverage additions for little or no cost (called “Extension Endorsements”). Look these over carefully. There may be some really helpful things there.

Make Sure The Policy is Accurate

Look at the “Description of Operations” and make sure it reflects what you really do. Some policies are really limited and specific in nature. I know of one policy that will insure pizzerias only if:

1) 2/3 of sales are from Pizza.
2) There are less than 40 seats.
3) There is NO table service.
4) You close no later than 11 p.m.

Pretty specific? YES! Think they are serious? YES! Want to chance a denied claim? Not me! TIP:  More companies are adding a “Classification Limitation” endorsement to policies. The net effect is that if what you do does not match the classification listed the policy will magically transform into ‘waste paper’ at the time of a claim!

Look At Your Workers’ Comp Policy

Look at the payroll and classification sections again to make sure that the classifications reflect what you do! If you have a policy that only shows “Clerical,” get it changed.  If you show payroll that’s nowhere near accurate, get it changed. Make sure that all “workplaces” are listed in the policy.  If you have two stores, the policy better list them both. If not, you are in deep trouble at the time of a claim. TIP:  It’s no good for you to ‘low ball’ payroll to try avoiding cost. First, it doesn’t work. Work Comp policies have a three year look back provision. They can and do go back three years and bill you for “low ball” payroll estimates. Second, by using accurate payrolls, you pay for the cost of insurance out of current earnings and you are forced to consider the real cost. Third, there is a new trend towards prosecuting for insurance fraud if you “low ball” payroll.  Think I’m foolin’? Look at this from the California Department of Insurance Official Web Site:

SAN FRANCISCO, CA – Investigators from the California Department of Insurance (CDI) Fraud Division and the Employment Development Department (EDD) arrested a San Francisco roofing contractor on three felony counts of workers’ compensation premium fraud and nine felony counts of payroll tax evasion.  …. from  Fremont… he was arrested today and booked into the San Francisco County Jail. Bail was set at $100,000. If convicted, he faces up to 13 years in prison, $250,000 in fines and $113,000 in restitution….

Deal With The Delivery Liability Monster Now

If you have any kind of delivery you simply must have this insurance. I don’t care if you have an Ex CIA agent with no birth certificate, four passports and no traceable identity delivering for you… you need this insurance.  There is no off-shore, back door, low kick, rotten lick, dirty trick scheme that’s going to get you off the hook. If someone delivers for you , you will be in the liability loop and without insurance to protect your interests you set yourself up for a fall. ‘Nuff said.

Get Your Risk Management Program Together

This is about the non-insurance things you do to keep your risk under control.  The short simple list:

  • Make sure your fire suppression system and your hood and duct systems are under maintenance contract.
  • Get a licensed plumber and a licensed electrician in and have them do a “once over.” Get a written report and put it away.
  • Get your driver monitoring system in place! If you haven’t done this yet, do it now. You simply must check the license status of each and every driver on a regular basis. I like monthly. If you find you have a ‘clinker’ or if you get a ‘clinker,’ get rid of that driver. Nothing personal – strictly business.
  • Review insurance limits.  How much building insurance do you have? How much personal property insurance do you have? How much liability insurance  do you have? And on and on… Listen, too much insurance is no better than too little.

TIP: I think it’s a great idea to have all your insurance policies renew on the same date. This lets you do a one shot over all review of your program and it lets you put everything together for finance purposes! Now, you may get some flack from your agent or from the insurance company.  Don’t back off on this. With very few exceptions it’s just that they don’t want the added work it takes the first year. You may have to work around the date of your Workers Comp renewal – but so what?

Summary

I’ve saved this one for the end because this way you just might remember it. When something changes, pick up the phone and call your agent! Give the poor guy a shot at actually doing the job for you….

  • Get a new truck? – Call your agent
  • Add new equipment? – Call your agent
  • Starting Catering? – Call your agent

Are you beginning to see a pattern here? I hope so!  Get into the habit of calling your agent. Look, this is the best time for a tune-up and review of your insurance. If you do it now and do it well, you shouldn’t have to look at this stuff for another whole year. My standing offer:  If you have any questions, call me (201 945 3100). I’ll do my best to help you out and I’ll put you in you touch with the PizzaSure.Com representative in your state.