The Insurance Family Blog

Protecting your restaurant from loss of utility services

Posted by Susie Scherff on October 20, 2011 at 3:46 AM

A commercial property insurance policy can usually be depended upon to handle direct loss to structures, equipment and related property that are owned by a restaurant or other food service business.  However, what happens when weather conditions take a turn for the worse and cause indirect damage by knocking out utility services to your establishment?  Examples of losses include damage by heat-induced transformer breakdowns; or broken power lines, including compressors, motors and switches, which could result in food spoilage.

Equipment damage may also occur due to an accidental and sudden loss of power.  Power surges may harm expensive equipment.  A commercial property policy may be of little or no help for such instances.  Generally, such policies exclude coverage for loss that involves the failure of utility services.  Therefore, your food service business could be harmed when a utility failure or interruption of any type occurs away from the insured business location.

Fortunately, you can buy additional, optional coverage to protect against utility service-related losses.  A restaurant usually has the option to buy the type of coverage it needs, such as services for water, telephone/communications (either including or not including land lines), gas and electric power.

A company that selects such coverage usually has the option to protect different classes of property including what business locations to insure, type of property (the firm’s own property and/or property that belongs to others, such as customers), and the sources (perils) of loss covered. The choices usually have to be reflected on the insurance policy itself, meaning that the information has to be listed on a policy declarations page or schedule.

Where available, the coverage option usually defines the utility services listed on the schedule. If your business is concerned about its vulnerability to power-related loss, be sure to check with Sutherland-Scherff about this valuable coverage option. We’re available to assist you anytime so feel free call us at 888-400-1133.

Topics: restaurant insurance, commercial insurance for restaurants, food service, utility interruption, property insurance for restaurants, off premises utility interruption, restaurants