SWG HOST – Hospitality Services Insurance: Patio Season Is Here and South Western Offers Patio Coverage for Restaurants

May 2019

Restaurant patios seem to be a growing trend. Traditional restaurants and bars that were not set up to include a patio are making the move by putting out tables and chairs in designated areas, giving their customers more dining options on beautiful summer days. Restaurant owners in Toronto are required by law to have a licence for these patio areas. And a patio licence means a need for all the appropriate insurance coverage. Each restaurant carries unique risks, and some ventures are riskier than others. Brokers must align themselves with underwriters who stay on top of hospitality trends and the potential liabilities that go with them.

Why Outdoor Seating Areas Need Coverage

Whether it’s a full patio or just a few tables and chairs in a designated area of the sidewalk, outdoor restaurant seating can pose numerous potential risks, including:

  • Customer and employee slips and falls (due to water or ice)
  • Fencing, patio furniture, decor, decks, signage, rented equipment
  • Crime (theft, vandalism)
  • Drinking and intoxicated patrons, bar-hopping, damage by patrons
  • Damage from bad weather (flooding, high winds, sewer backup, etc.)
  • Damage by traffic (auto accidents)

Doreen Teoh, Senior Underwriter with South Western Insurance Group, has worked in the hospitality market and understands the unpredictable nature of this class. “Usually the deficiencies in coverage don’t come out until there’s a loss, and it becomes almost a he said/she said situation between the broker, client, and possibly us,” she says. “It’s all about the coverages you’re providing and educating everybody to understand what’s at stake.”

How SWG Can Help

If their current insurance providers don’t offer patio coverage, then restaurant owners making the move to outdoor seating will look elsewhere. That is why SWG aims to cover as many areas of the industry as possible. Teoh goes beyond the information supplied on the brokers’ applications, taking additional steps to learn everything she can about the client to obtain as clear a picture as possible of any potential claims. She not only checks official channels to see where legal issues may arise, she also makes it a point to note an establishment’s reviews, and will steer clear of any venue that has multiple marks against its name. “At the end of the day, most brokers just want to deal with someone who knows more than they do,” she says. SWG’s underwriting prioritizes fast service in quoting and binding policies. “We realize that fast service can mean everything to a broker,” says Teoh, “and that’s what we aim to provide. Depending on our workload, we can sometimes even provide a quote in less than an hour.”

SWG’s Comprehensive Coverage

SWG can provide terms for risks across Canada. The policy will provide coverage for both bodily injury and property damage and will include forcible ejection coverage as well. Coverage & Limits:

  • Property Coverage – All Risk/Replacement Cost / Named Perils / Actual Cash Value Basis
  • Business Interruption – Profits / Gross Earnings / Extra Expense / Rental Income
  • Flood / Earthquake / Sewer Back-Up – subject to availability by Province
  • Crime Coverage – Employee Dishonesty / In/Out Coverage / Broad Form Money & Securities subject to a minimum class II safe on premises
  • Commercial General Liability with limits up to $10,000,000 and more if necessary
  • Tenants Legal Liability
  • Non-Owned Automobile
  • Mechanical Breakdown
  • Legal Expense Coverage
  • Stand alone Crime & Liability is also available

Extensions of Coverage:

  • Newly Acquired or Constructed Buildings $1,000,000 Limit
  • Newly Acquired Business Personal Property $500,000 Limit
  • Fire Department Service Charges $20,000 Limit
  • Peak Season $25,000 Limit
  • Personal Effects $5,000 Limit
  • Property Off Premises $10,000 Limit
  • Property In Transit $10,000 Limit
  • Accounts Receivable $10,000 Limit
  • Valuable Papers $10,000 Limit
  • Damage to Building by Theft $5,000 Limit
  • Professional Fees $25,000 Limit
  • EDP Equipment, Data and Media $25,000 Limit

Recap There will always be a need for coverage in the hospitality industry, and with more patrons opting to dine outside in nice weather, the outdoor seating trend continues to grow. “This is a wonderful class, as there will always be a need for this coverage,” Teoh says. “And if it’s not going to go away, we might as well fine-tune it to make it a winning class of business instead of one that always loses.”