While the size and location may vary, most of our hospitality and recreation clients share commonalities: they serve food and liquor, are open to the public, and operate on expansive properties. Most importantly, they all face ever-changing exposures that lead to heightened risks—from rising operating, energy, and food costs, to specific industry issues like bedbugs and guest injuries.

How can golf course and restaurant insurance protect you?

Use the yellow hot spots and explore how golf course and restaurant insurance can help protect against common risks.
Golf Course

Tee and Green

Risk Factor

The surfaces, tees, and greens are susceptible to storm damage, vandalism, and other risks.

Solution

Make certain your policy contains tee and green coverage and includes the wording "all playing surfaces." Seek a high limit of coverage ($1,000,000 or more) and make certain there is no per hole limitation.

Flood Insurance

Risk Factor

As exposed by Superstorm Sandy and other significant weather events in recent years, flooding can occur in almost any location and to any business. Are you protected?

Solution

Flood insurance is not part of any property or liability policy. It is a standalone policy that reacts independently from all other coverage. Whether or not your course is (or is not) in a designated flood zone, consider coverage in anticipation of an unforeseen weather event.

Pollution

Risk Factor

Your course's rolling slopes of emerald green are not a product of nature alone. The chemicals used to keep the grass lush create exposures for pollution that can often be overlooked.

Solution

There may be a need to protect against tank leakage and other pollution. Look for a complete environmental insurance policy to address all of your exposures, beyond just the normal herbicide and pesticide coverage for over spraying.

Employment Practices Liability Insurance (EPLI) / Directors and Officers (D&O)

Risk Factor

On average, it's estimated that three out of five businesses will be sued by their employees. Golf courses, just like any other business, are vulnerable from the pre-hire process through to a possible reduction in workforce. Claims can stem from just about anything, such as someone taking a joke the wrong way and being offended. In addition, key personnel (such as directors, officers, and other board members) may be at increased risk resulting from possible discrimination, slander, and more.

Solution

Seek the broadest policies available with the highest rated carriers and have separate limits for both employment practices liability and directors and officers liability. Review all of your liability policies, as gaps or overlaps may occur with third-party discrimination coverage, fiduciary liability coverage, and commercial general liability.

Valet Parking

Risk Factor

Providing a valet service is convenient for your guests, but damaging a vehicle or property, or causing injury, is a very real risk associated with it.

Solution

Obtain a general liability policy to protect your business from lawsuits by a third party. Be certain that a garagekeepers legal liability policy is also in effect with adequate limits to cover any physical damage to a guest's vehicle or other vehicles on-site. If you are using an independent valet service, obtain a certificate of insurance to verify they have the proper coverage with adequate limits. Also make sure that your business is named as an additional insured under their policy.

Cyber Liability

Risk Factor

Just about all businesses rely on technology in some way. It's increasingly used to store sensitive information, such as credit cards, passwords, and social security numbers. However, you're at risk if this information is lost, stolen, or compromised. In fact, you may even be legally obligated to alert those impacted by the breach and possibly pay for any financial loss incurred.

Solution

Experiencing a data breach is often not a question of if but when. Securing a cyber liability policy can offer coverage for expenses associated with compliance regarding data breach notification laws, securing legal counsel to advise on incident response, credit monitoring services, as well as paying for regulatory defense and penalties arising from privacy law violations.

Golf Carts and Major Maintenance Equipment

Risk Factor

You have considerable exposure to damage or loss of golf carts and maintenance equipment caused by accidents on the course or by normal perils of fire and vandalism.

Solution

Obtain replacement cost coverage on both the carts and maintenance equipment, as having this protection will lessen the overall financial impact of depreciation.

Business Interruption Coverage

Risk Factor

Adequate property coverage is a crucial component of your insurance portfolio. If you lose the clubhouse, you could potentially have a multi-million dollar loss with business interruption and loss of income, including loss of existing golfers as well as potential new golfers.

Solution

Make sure your short- and long-term revenues are properly protected. Property limits should meet or exceed the club's most recent building appraisals. In addition to the limits assigned to the structure itself, consider business income coverage to cover anticipated revenue loss from the normal day-to-day club operations. Also, include other income generating events such as weddings, special golf outings, and other events arranged with outside organizations.

Restaurant

Liquor Liability

Risk Factor

Any establishment that sells, serves, or assists in the purchase or use of liquor is open to a liability claim as a consequence of someone getting inebriated to the extent that injuries or property damage result.

Solution

If you are in the business of selling or serving alcohol, it is critical that you protect yourself from potential financial losses by obtaining a liquor liability insurance policy. Having the right policy in place could help cover your legal costs, court fees, and any civil or criminal damages stemming from an incident involving liquor.

Valet Parking

Risk Factor

Providing a valet service is convenient for your guests, but damaging a vehicle or property, or causing injury, is a very real risk associated with offering this service.

Solution

Obtain a general liability policy to protect your business from lawsuits by a third party. Be certain that a garagekeepers legal liability policy is also in effect with adequate limits to cover any physical damage to a guest's vehicle or other vehicles on-site. If you are using an independent valet service, obtain a certificate of insurance to verify they have the proper coverage with adequate limits. Also make sure that your business is named as an additional insured under their policy.

Business Income

Risk Factor

In the event of a covered cause of loss, most policies include coverage for the income you cannot collect. What happens if one of your key suppliers, such as your food or beverage distributer, is incapable of supplying you with what you need to keep your business running?

Solution

Make sure that your business income insurance includes contingent business income coverage to protect against the loss of potential earnings to your restaurant caused by the inability of a key vendor to provide a component necessary for the completion or execution of your services.

Employment Practice Liability Insurance (EPLI)

Risk Factor

On average, it's estimated that three out of five businesses will be sued by their employees. Restaurants, just like any other business, are vulnerable from the pre-hire process through to a possible reduction in workforce. Claims can stem from just about anything, such as someone taking a "joke" the wrong way and being offended.

Solution

Coverage to protect you against this risk normally comes as a standalone policy. The right coverage is critical to your risk management process as it protects against discrimination, wrongful termination, sexual harassment, and other employment-related allegations. Typically, the policy will cover your business as well as your directors and officers. Third party coverage is an added option, usually accomplished via a policy endorsement, and addresses claims made by customers or vendors against you from acts committed by employees.

Sign Coverage

Risk Factor

Exterior signs associated with your business are vulnerable to fire, vandalism, and weather. Most commercial property policies offer a sublimit of coverage for signs, but it might not be enough.

Solution

Evaluate your sign exposures and determine if your existing commercial property insurance policy provides sufficient coverage. If not, increase the policy limit as required.

Systems Breakdown Insurance

Risk Factor

Equipment such as freezers, stoves, dishwashers, and air conditioning units are vital when running a restaurant. If a power surge or mechanical failure results in equipment breakdown, your business can experience expensive repairs and lost income.

Solution

Make sure you maintain systems breakdown insurance, including business interruption and spoilage coverage so that you can get your business up and running again without suffering financial setbacks.

Flooding

Risk Factor

As exposed by Superstorm Sandy and other significant weather events in recent years, flooding can occur in almost any location and to any business. Are you protected?

Solution

Flood insurance is typically not included in a commercial property insurance policy, but can generally be added by endorsement as long as the property is not in a high risk flood zone. If coverage is excluded from the policy, you should look into the cost to add it. If your property is in a high risk flood zone, you will need to obtain a standalone policy. In either case, it’s important to have coverage.

Cyber Liability

Risk Factor

Just about all businesses rely on technology in some way; it's increasingly used to store sensitive information, such as credit cards, passwords, and social security numbers. However, you're at risk if this information is lost, stolen, or compromised. In fact, you may even be legally obligated to alert those impacted by the breach and possibly pay for any financial loss incurred.

Solution

Experiencing a data breach is often not a question of if but when. Securing a cyber liability policy can offer coverage for expenses associated with compliance regarding data breach notification laws, securing legal counsel to advise on incident response, credit monitoring services, and paying for regulatory defense, as well as penalties arising from privacy law violations.

Improvements and Betterments

Risk Factor

Most restaurant owners remember to insure their contents, such as tables and chairs, but do not factor in the cost of the improvements they have made when selecting a building or contents limit.

Solution

If you have done or are considering a renovation to your restaurant, factor the cost into the building limit if you own the building or contents limit if you lease.

Food Contamination / Spoilage Coverage

Risk Factor

A power outage, mechanical failure, or other covered event can cause food to spoil, which then must be discarded.

Solution

This coverage will cover the replacement cost of the spoiled food. Most policies include coverage, but you should confirm the limit is sufficient.

Employee Theft

Risk Factor

Two things a restaurant has easily accessible are food and money. Employees have been known to run scams to pocket money or steal food to take home or give away to friends and family members.

Solution

Make sure you have coverage for employee theft. This can help compensate you for some of your financial losses.

Commercial Auto / Hired and Non-Owned Auto Liability

Risk Factor

If your restaurant offers food delivery service, whether the drivers are using their own vehicles or those owned by the company, you can be named in a lawsuit as a result of injury or damage caused by them while making a delivery for you.

Solution

A business auto insurance policy should be maintained if the vehicles are owned by the company. If employees are using their own vehicles to make deliveries, then hired and non-owned auto liability coverage should be maintained. Both will defend you if you are named in a lawsuit as a result of an employee getting into an accident while making a delivery for you.

Workers' Compensation

Risk Factor

Most states require an employer to provide coverage for any injuries your employees experience while on the job, as well as any job-related illnesses.

Solution

Maintain workers' compensation insurance to provide benefits to eligible employees; otherwise, you can be penalized for every day that coverage is not maintained, as well as for any benefits an employee would have been eligible for in the event of job-related injury or sickness.

“Kapnick has a great team who keeps us up to date on Heath Care Reform and any other legislative changes that may impact our business. They have introduced us to an online benefit system…which has improved our efficiency and recordkeeping process. Kapnick assisted us in the implementation of a new Wellness Program that has encouraged our employees to lead a healthier lifestyle. Overall, Kapnick simplifies our healthcare needs, addresses our concerns in a timely manner and provides professional customer service.”

Experts

Angela Dean

Sr. Vice President, Client Executive

angela.dean@kapnick.com
248.327.0449
LinkedIn

Bill Lyle

Client Executive

bill.lyle@kapnick.com
734.274-4442

Let’s discuss your hospitality & recreation insurance.

One of our insurance advisors will reach out to you to review your information and present you with the appropriate  hospitality & recreation insurance solution. There’s no obligation, just good-old-fashioned advice.
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Kapnick Insurance Group offers comprehensive hospitality & recreation insurance throughout the United States and internationally.