RESTAURANT INSURANCE CASE STUDY
Restaurant at $2M Revenue, Business Pack Remarketed After Four Declines
The restaurant's policy schedule still showed the revenue from when the cover was first written. Updating it to the real figure and taking the risk to eight insurers produced four declines and four quotes more than $8,000 apart.
THE SITUATION
A restaurant approached Tank Insurance for its business pack. The schedule had not kept pace with the restaurant's growth: it still showed around $500,000 revenue and four staff against actual turnover of around $2 million. A self-managed super fund also needed to be noted as an interested party on the property sections.
The client wanted the cover corrected to the real business and priced against the market.
OUR APPROACH
An under-declared revenue figure is a claims problem waiting to happen, so the first step was to confirm the current numbers in writing and rebuild the submission on them.
- Revenue was confirmed in writing, and the staff count and interested party were rechecked, before any insurer was approached.
- Eight business pack insurers were approached. Four declined the restaurant, and four quoted.
- The four quotes ranged from approximately $5,900 to $13,900 for comparable cover, which is why the remarket was worth doing.
THE CHALLENGES
Business pack insurers decline restaurants for reasons that may have little to do with the individual venue: cooking exposure, cuisine type, trading hours and the insurer's existing hospitality book all play a part. Four declines out of eight on this risk reflects each insurer's appetite, not the client.
The wider point is the spread. One insurer quoted more than double the cheapest, and another two thirds more, for the same restaurant. Without a remarket, the client would not have known.
THE OUTCOME
The business pack was placed with Zurich at a premium of approximately $5,900 a year, with revenue declared at around $2 million and a self-managed super fund noted as an interested party.
Final Solution: A business pack for a restaurant with around $2 million revenue at around $5,900 a year, with the schedule corrected to the business as it actually trades.
This case records one historical outcome; current insurer appetite, premium, timing and terms depend on the complete risk at the time of application.
For the wider buying context, see our restaurant and bar insurance guide and the business insurance brokers page.
RESTAURANT OWNER QUESTIONS
What this placement answers for other restaurant owners
How much does restaurant insurance cost?
What happens if my policy still shows old revenue figures?
Why would an insurer decline a restaurant?
RESTAURANT INSURANCE
Put this placement in context
Case-study results are historical and are not a promise of current pricing, capacity or policy terms. This page is general information only and does not take account of your objectives, financial situation or needs.
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Send us the current schedule and your real revenue. We rebuild the submission on the business as it trades today and take it to the insurers that write hospitality.