In a post-pandemic world, it seems like restaurants of all sizes and categories — even pizzerias — are opening drive-thru lanes dictated by consumer needs for omnichannel accessibility. But before you open a drive-thru restaurant or tack one on to an existing store, one of the first things you should do is check in with your insurance agent to make sure all of your bases are covered.
We spoke with insurance expert John Cassetta, who works as a restaurant insurance solutions leader for small business insurance company CoverWallet about what operators should think and ask about in the realm of business insurance before they open a drive-thru lane. Here are some of his top tips and points.
Must-have insurance for drive-thru restaurants
“If you're a restaurant owner that will be necessary to have. You absolutely have to have a business owner policy, which comprises of commercial property, general liability and business interruption insurance. Then, workers compensation insurance is something that you're seriously going to need to have in almost every scenario.”
Drive-thrus don’t need special insurance, but they do need special consideration
“When you add a drive through to the context of the conversation, it doesn't change the coverage that you need to have, but it adds to the degree of difficulty within some of those. You need to be more aware of certain components within the business owners’ policy. […] The business owners’ policy covers all of those situations, whether it's damage to your property, any liabilities that may have been created by something that you did while transferring the food through the window to the car-- those are going to be liability issues. And then if you have a claim on the property that causes your restaurant to be inoperable for a period of time, that's going to include the business interruption insurance.”
When you’d need business interruption insurance
“What could interrupt your business? Maybe a car driving through your restaurant, and depending on the layout of the drive thru, you might have something where a car clips the building, making the drive-thru inoperable. […] So knowing that you've increased the likelihood of something like that happening means that you need to be a little bit more mindful of one coverage versus the other.”
Instances of liability in pizza drive thrus
“Getting a pizza box through a drive-thru window might be a little bit difficult, and then suddenly ‘oops!’ you dump a large pie on somebody’s lap and their car seat. There's a big difference between handing you a pizza box that could pop open versus pre-wrapped cheeseburgers. Then what if your customer is wearing shorts and gets hot cheese on their lap, and now they have burns. So from a general liability standpoint, that’s an increased likelihood, as well as an increased severity of possible incident.”
Why you need workers’ compensation insurance
“There have been incidents where some guys are going through a drive-thru and reach out and try to cut the employee or pull them through the window in an attempted kidnapping. As crazy as it sounds, that’s a workers’ comp issue even though it’s a crime that’s being committed because an employee was potentially injured during the context of their employment.”
Know what business owners have control over
“Not all claims are created equal, and not all drivers in cars that cause damage are created equal. So, what do you as a restaurant owner have control over? […] You want to make sure you know if you're responsible for the building -- you may be leasing it so you're not responsible for it, only within in the terms of your lease. But then anything you add to the building, like the drive-thru call box, you’re responsible for. Knowing the value of that, as well as from a cash flow standpoint, selecting the proper deductible […] I've done myself a disservice if I have to file a claim, and I can't afford to pay my out of pocket portion.”
What insurance doesn’t cover
“Insurance is there for the things that are sudden and accidental. Things that happened to your property that were preventable, or that happened over an extended period of time-- those are less likely to be covered through insurance. So, a car driving through your drive-thru window, a fire, those are clearly insurable. If the ordering kiosk rusts over time, that was clearly avoidable and happened slowly.”
Make sure your insurance is still meeting your needs
“Pick up the phone, speak with your agent and tell them ‘this is what I have, am I adequately covered for the exposures I just added?’ The best way to do it is to ask the questions. I think that now more than ever, especially with all the evolution of how creative restaurant owners have had to become over the last several years, keep reviewing your policy: don’t just set it and forget it. Maybe you bought insurance five years ago, and things have clearly changed so make sure you’re reviewing your policy periodically.”
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