Posted by Gord on November 17, 1999 at 16:59:33 :
In Reply to: Liability Insurance posted by James Crandall on November 17, 1999 at 01:13:39 :
I was an insurance adjuster in my former life and the first piece of advice I would give you is to stop selling food this instant until you get coverage. The liability portion of your homeowner's policy is 99% likely to not cover you.
Your current broker will likely not be able to help you. Personal lines insurance and commercial lines are two very different beasts.
In terms of the need for liability insurance? Put it this way: if McDonald's can be successfully sued for millions of dollars after someone spilled coffee on their lap (there was no warning on the cup that the coffee was hot!), what do you think your chances are if you inadvertantly cause food poisoning-related injury or death. Or if you cause "emotional trauma" because the salad had a slug in it at someone's wedding (it was the most important day of my life, your honor, and I just burst into tears every time I think about it and I want a million dollars because that will make it all better) ?
One of the things liability insurance does is pay if there is a reasonable basis for the claim. The other, perhaps more important, thing it does is the insurer acts as your attorney in such matters and they pay for the cost of the legal fees in defending against claims. Unless you have deep pockets, you could well win against a claimant but lose bigtime in lawyer fees if you're paying it yourself.
Start by calling the insurance company who has currently underwritten your homeowner's policy (not the broker, the insurer) and ask if they sell commercial packages and who you can talk to (explain that your personal lines broker couldn't help). Deal with someone who specializes in CGL lines (commercial general liability). There is a real art to preparing a good commercial or personal policy and typically brokers who try and do both tend to do neither one well. And don't go cheap on the policy. You get millions of dollars worth of protection for hundreds of dollars.
Your CGL policy may also include a "tenants coverage" component which covers the equipment and premises of anyone whose kitchen you may be renting. Talk to your broker.
Once again, though, (in my opinion) you shouldn't even consider serving another meal until you have coverage in place. It's a litigious world and you are playing a potentially multi-million dollar crapshoot without coverage.
Just my thoughts.
Gord