Market Research Report For California Restaurants

Transcription

1 October 2011 Market Research Report For California Restaurants Section One: Section Two: Insurance Companies and the Best Rates Section Three: Coverage Summary All information provided in this report and any documents ancillary thereto ("Report") are provided for information purposes only. Although the information found in this Report is believed to be reliable, no warranty, expressed or implied, is made regarding the accuracy, adequacy, completeness, legality, reliability, or suitability of any information, either isolated or in the aggregate. All information is provided "as is." Changes may be periodically made to the information contained in this Report. No notice is required with respect to any changes. If you find any errors or omissions, we encourage you to report them by to: Under no circumstances will Dragon Services, Inc., or its directors, officers, agents, contractors, employees or assigns be liable for any direct, consequential, indirect, special or punitive damages whatsoever arising out of your access to or use of this Report. (858) Copyright 2011, Dragon Services. Inc This report may not be copied or reproduced in any medium without the express written consent of Dragon Services, Inc.

2 Section One Insurance Companies and the Best Rates What are the lowest possible General Liability rates in California? Now we provide the answer. Insurance Dragon is a consulting firm. We are not insurance brokers nor do we sell insurance. Our staff has decades of experience, providing services to accounts of all sizes and complexity. After extensive research, we are pleased to provide this report. Industry Report: Restaurants California General Liability Best Possible Final Net Rates (After all credits) Best Net Rates Restaurant Carriers with General Liability rated on per $1,000 of Sales Restaurant Carriers with General Liability rated on Public Area Square Feet $ $2.15 $2.50 The rates above are based on a typical Restaurant, as described here: o Excellent Loss Experience for the past 4 years o Good employee hiring practices; good and frequent training programs; low turnover, relative to the rest of the industry / Good Housekeeping and Spill Clean Up Process o Comprehensive Safety Programs/ o Liquor Receipts under 25% of Total Sales / Catering Receipts under 20% of Total Sales o Liability Limits - $1,000,000 Each Occurrence, $2,000,000 General Aggregate o Medical Expense - $5,000 If your business matches the parameters we described and you are paying more than the listed rates, call us at (858) Insurance Dragon can help you find out why and let you know how you can lower your rates. Your Individual Rates may vary if your exposures are different from those listed. For example, if you have had a number of claims, you might not be able to realize the market-best rates listed. Insurance Dragon can produce a Market Research Report for your particular business. Our rates for client-specific Market Research Reports vary depending on the size of business. (858)

3 Section One Insurance Companies and the Best Rates Insurance Companies Actively Writing General Liability for Restaurants Consistently Most Competitive Regularly Most Competitive General Liability for Restaurants Allied Liberty Mutual Farmers Firemans Fund Travelers Zurich CNA Occasionally Most Competitive Safeco _ UCGA (CA. Rest. Group) Sequoia Hartford Golden Eagle Unigard Dongbu Financial Pacific XL Crum & Forester Note: All insurance companies listed are rated A- IX or better by A.M. Best. For any particular business, any one of the insurance companies listed above might be the most competitive. Even those insurance companies listed as Occasionally Most Competitive can deliver the lowest price at times. As we learn about other insurance companies writing Restaurants, we will add their names to this report. Some insurance companies work through agents and brokers. Other companies (e.g. Farmers) are Direct Writers, meaning you must work through their exclusive sales agents. Access points are critical! Having the wrong broker approach a competitive insurance company can result in no quote at all or a very poor quote. If you would like to know the name of a broker that has strong experience with Restaurants and a large concentration of business with any of the listed insurance companies, please call us. (858) Research Techniques The Rates identified in the report reflect the Best Possible Rates in California, by line of coverage. The rates are projected based on the rating assumptions listed. Best Possible Pricing was identified after working with Restaurant clients, after discussion with many brokers, and after review of our own internal pricing models and research tools. (The brokers we contacted are committed to delivering coverage at the pricing listed if given the chance to do so. These are real rates.) (858)

4 Section Two How to Use the Market Research Report In our role as consultants, we have worked with clients in virtually every industry seeing the same issues over and over. 1. Very Few Quotes: Businesses typically see only 2 or 3 quotes. There are many excellent brokers. Still, it has been very surprising to us how often our clients, in nearly every industry, tell us that they thought there were only 2 or 3 insurance companies that were interested in either their industry, or their particular business. They believed that was because of their prior losses, or a particular characteristic of their business. In our experience, there are many insurance companies interested in any particular business, no matter the industry or the loss history. 2. Rates are Mysterious: Businesses have no independent benchmark to tell them if their current insurance pricing is close to the best possible pricing in California for their type of business. Market Research Report The Solution 1. Save Time: Businesses can avoid the time-consuming and frustrating process of shopping for insurance if their current rates approximate the market-best pricing shown. 2. Market Knowledge: For the first time, businesses can know if the most competitive insurance companies are quoting. 3. Pricing Knowledge: For the first time, businesses can know if their insurance rates approach the best possible rates from any broker and any insurance company in all of California. (858)

5 Section Two Obtaining Good Quotes Insurance pricing is subjective and variable (no one knows what your future losses will be) so taking the wrong steps can result in higher premiums. 1. Written Arguments: Since pricing is subjective, you need to make sure that every underwriter sees in writing, all of the arguments on why your company has lower hazards compared to other similar Restaurants; in other words, why your company deserves lower pricing. From the Insurance Dragon website, you can download a list of many arguments that you and your broker can use in this manner. 2. Strong Application Package: Ask your broker to see a copy of the application and submission package sent to underwriters on your behalf, including the written arguments. The best brokers will be happy to show you their hard work on your behalf. (Not-so-good brokers may resist showing you their work) on Lum 3. Broker Choice: With insurance pricing being subjective, one particular broker may have a superior relationship with an underwriter that takes a fancy to your particular business. 4. Get Quotes Early InsuranceDragon.com has tips on how to do this. 5. Don t Share Numbers : If you have more than one broker bid, sharing details from one broker with another is selfdefeating and forces brokers to withhold quotes until the last minute. (Reference the Insurance Dragon website for tips on negotiating lower premiums.) Businesses are unaware that they overpay for insurance but we know that it happens around 80% of the time. (858)

6 Section Two A Few Key Arguments to Lower Your Premium Following are questions typically not fully addressed in insurance applications. Answering these questions in detail can help lower your premiums: Quality of Housekeeping you should indicate what the overall condition of your restaurant is and the process used to maintain the overall housekeeping of the premises. Be sure to expand on your Sill Clean Up Process and the steps that you take to minimize any exposure to your patron s tripping or falling. First Aid / CPR - confirm that one or more of your employees are certified. Comment on your procedure for dealing with a patron choking or being injured in some manner. Written Safety Program outline how comprehensive and far reaching your safety program is. For more information on Safety Programs refer to: Cal/ OSHA Injury & Illness Prevention Program Financial Condition because of the high failure rate of restaurants you need to make the underwriter comfortable that you are financially stable. There are other important questions to address with an insurance professional, but these are a few of the key issues for all Restaurants. Remember, always tell the full and complete truth. Failure to do so can jeopardize coverage when you have a claim. (858)

7 Section Two Claims Arguments If your business has experienced General Liability claims in the past, then you need to explain why your account is not likely to have similar claims in the future. This could have a significant impact on your General Liability premium. Here are some brief examples: You can obtain a free list of nearly 100 potential arguments at Dragon.com. Reduced Exposures One of the claims happened when one of our patrons tripped on a hole in our carpet. After that claim, we put new carpeting in throughout the entire restaurant. As a result this type of claim will not reoccur. Safety Program The claim happened because we were not as rigid in fully enforcing our Safety Program. Since then, we have instituted a comprehensive safety plan and we now hold weekly safety meetings. This particular incident is talked about repeatedly and we certainly do not expect it to ever happen again. Employee Training One of the claims happened when a new employee spilled a pot of hot coffee on one of our customers. We now have an expanded formal training program that all new hires must complete before they can begin working. The claim in question could not happen today because of our change in the way we do the work. These reasons are just examples. You would need to tailor the argument to match your situation. (You or your broker can obtain a free list of nearly 100 potential arguments at This list can trigger discussions with a broker that can save you thousands of dollars in premium.) As a reminder, all arguments should be in writing, allowing you to easily update and use them in subsequent years; also, you can make certain every underwriter has the ability to justify the lowest possible pricing. (858)

8 Section Three How We Do It Market Research Reports Coverage Summary/Quote Comparison One of the most difficult insurance challenges for businesses is comparing coverage proposals. Each broker uses a different proposal format, and in our experience, it is rare that a proposal addresses every possible issue regarding coverage, exclusions, and premium terms. If you choose to receive bids from more than one broker, we have developed a Coverage Summary/Quote Comparison to make the process easier for you. Simply send the following form to any broker that has a competitive bid that you are considering and ask the broker to complete the Quote Summary as part of their quote. Once completed, the Summary will allow you to easily compare coverage with your current insurance in a side-by-side display, making an apples to apples comparison easy. Any significant differences in the terms of the quote will be readily apparent. Our clients love using the Summary and we hope you will too. Please feel free to let us know if you have any questions. Insurance Dragon (858)