Question

You operate a restaurant in the state of Vireinia, The restaurant offers a diverse menu of locally sourced recipes. The food industry has awarded your restaurant with many culinary achievement awards over the years. In addition to fine food, vour facilities include an upscale sports bar which serves alcoholic beverages in a bar/lounge environment. You employ a head chef and six other food preparation staff. Your location employs wait staff, dishwashers, hostesses and hosts, and managers. Operations include deep fat frying, cooking over open flames with woks and sauté pans. Your kitchen is equipped with proper Ansul fire suppression systems over all active cooking surfaces. You also have a walk in freezer and a walk in refrigerator. Fresh fruit, vegetables, meat and seafood are received weekly. You also have banquet and event facilities that you rent for events such as business meetings, weddings, parties and celebrations. You provide food and alcoholic beverages for these events. The only food you do not produce in house are bakery goods that you purchase from a local supplier. Janitorial services are provided by a vendor who does that work at night while your facilities are closed. Cash receipts are taken to the bank once per week at each location and stored in a safe and the manager's office between deposits. $1,800,000 Revenue $650,000 Building Business Personal Property $500,000 $120,000 $250,000 $0 Furniture, Fixtures Raw Material, Stock Equipment and supplies Finished product/Inventory Other 2015 Year Built Masonry Construction Protection Class ansul, sprink, alarm, fire ext. Private Protection restaurant w/o dance floor Occupancy station retail shopping and gas Adjacent Adjoining wiring/plumbing update None 2015

Answer 1

Ans.3: Herein 1st we need to calculate Total Insurance Value:

Total Insurance Value will be total value of Building and Business Personal Property= $650000+$500000+$120000+$250000=$1520000

Coinsurance requirement is 80 percent. So required amount of insurance would be $1520000 x 80%= $1216000.

Actual Amount of insurance is $400000 on Building + $500000 on Business Personal Property= $900000

So in case of Amount of loss of $5000, Insurance cover will be calculated as follows:

$900000/$1216000 x $5000= $3700. So penalty will be $1300; i.e. $5000 less $3700.

Herein this case $1000 is per occurrence deductible. So net amount to be received from insurance company will be $2700.

Ans. 5: Reading the entire case, I can recommend followings:

1. Herein case insurance cover taken should include following factors;

a. life of manpower,

b. Value of cash receipt of a week.

2. Public liability clause cover.should be taken.

3. Considering nature of business, coinsurance clause need to be 90%.