When running a restaurant business in California, dealing with the ins and outs of restaurant insurance is something most owners would rather avoid. However it is imperative as an employer and as a business owner to have valid insurance coverage. It is also vital to adhere to the guidelines set down by the insurance company or the coverage could be invalidated.
California restaurant burns due to obsolete fire suppression system
Recently a California Restaurant owner found himself in dire straits after being brought to court by his insurer. The reason? After a fire approximately six years ago, his insurance company paid out $15,000 in damages. It was later found that the restaurant had an obsolete fire suppression system at the time and any insurance coverage in place was invalidated. An appeals court judge has ordered the owner to return all $15,000 to the insurance company in question.
Always be aware of insurance exclusions
The problem with the insurance coverage was a provision that is sometimes included in commercial policies which require the owner to maintain a certain standard of fire suppression system on the premises. However, the insurer then discovered that the fire-suppression system installed at the restaurant was obsolete, which activated this provision and as a result they were not obligated to pay the claim. In the resulting court appeal, lawyers for the insurance company argued that the restaurant’s owners and managers knew the system was obsolete. They still failed to correct the issue. Had they done so, the fire may have been prevented.
“Dry” fire suppression systems are obsolete
The fire caused substantial damage to the restaurant and the obsolete fire-suppression system failed to operate properly. The system used a “dry” fire-suppression system from the 1970’s that has since been mooted obsolete by fire safety experts in favor of a “wet” fire suppression system.
The advice here is straightforward for restaurant owners in California. Examine insurance agreements carefully, and discuss cover and exemptions in detail with the insurance company. Always adhere to the latest in fire safety standards to avoid invalidating fire coverage.
Contact Sutherland-Scherff today to discuss fire coverage for your restaurant.
So Sutherland-Scherff have put together some Top Tips to highlight ways of managing Loss Control for operators of restaurants and food service establishments such as cafes, pizzerias, delis that cook and serve food. Areas included are:
- Food Safety
- Fire
- Sanitation
- Equipment
- Crime
