The Importance of Reading a Restaurants and Food Service Loss Run

Before quoting a restaurants and food service account, it's crucial to understand the loss run. This document shows the claims history of the business, helping you assess risk accurately. The industry is known for higher exposure due to factors like slip-and-fall accidents, kitchen burns, and food-handling incidents.

Reviewing the loss run can reveal patterns that could affect your quote, such as frequent workers' compensation claims or high liability costs. For example, a restaurant with multiple slip-and-fall claims in a single year might be more expensive to insure. Knowing this up front helps you prepare for the right pricing and coverage.

What to Look for in a Restaurants and Food Service Loss Run

When you open a loss run for a restaurant or food service business, you're looking for several key elements:

  • Frequency and Severity of Claims: How often claims occur and how costly they are. A high number of small claims may signal operational issues, while a single large claim could be an outlier.
  • Claim Types: Look for patterns such as repetitive workers' compensation injuries, liability claims from slip-and-falls, or property damage. This can help you identify high-risk areas within the business.
  • Timeframe: Ask for several years of loss runs. Pay attention to whether claims are consistent over time or if there was a sudden spike.

Common Class Codes for Restaurants & Food Service

Restaurants and food service businesses fall under specific workers' compensation class codes. These codes determine the rate and exposure basis for the coverage. For example:

  • 9082: Restaurant NOC
  • 9083: Restaurant: Fast Food – For fast food establishments. Some states like California use 9079 for fast food, so always verify the state's code.
  • 8043: Retail Store NOC – Including Service of Food – Not Restaurants
  • 9080: Dance Hall – All Operations

Remember, these codes are rating classifications and do not define the scope of coverage. Coverage is determined by statutory requirements and the policy itself.

How to Use a Loss Run to Make a Better Quote

Armed with a loss run, you can make a more accurate quote by considering the business's history and potential future risk. Here's how to use it:

  1. Identify Risk Patterns: If the restaurant has recurring claims in a specific area, such as slip-and-fall injuries, you may need to recommend additional training or risk mitigation strategies.
  2. Adjust for Seasonality: Some restaurants see higher claim frequencies during peak seasons. For example, a restaurant with a busy holiday season may have more slip-and-fall claims due to increased foot traffic.
  3. Review Owner Inclusion Elections: If the restaurant owner is included in the coverage, this may impact the quote. Make sure to confirm whether the owner is an employee and whether they're opted in.
  4. Check the Claims Impact: A heavy claims history can raise the experience modification or bring surcharges, which can significantly affect the final quote.

Common Challenges in Restaurants & Food Service Loss Runs

Restaurants and food service businesses can present unique challenges when it comes to loss runs. Here are a few common issues to watch for:

  • High Turnover: High staff turnover can make it difficult to assess risk accurately. Employees may be inexperienced and more prone to injury.
  • Slip-and-Fall Claims: These are common in restaurants due to wet floors, spills, and crowded spaces. Look for a history of these types of claims to gauge risk.
  • Commissary Work: Some restaurants operate out of a central kitchen (commissary), which can have different risk factors compared to traditional locations.

Next Steps for Agencies: Streamline Your Workflow

For agencies, using a loss run effectively is part of a larger workflow. At Cennairus, we help streamline the process by enabling one submission to reach several carriers and specialty markets; some are connected by API and others are worked by email or a program desk. This means you can efficiently quote and place restaurants and food service accounts without juggling multiple systems.

By using tools that automate document intake like ACORD forms and loss runs, you can focus more on risk assessment and less on administrative tasks. This is especially useful in fast-paced niches like food service, where accuracy and speed are key.

If you're ready to streamline your quoting process for restaurants and food service accounts, join Cennairus and start placing coverage more efficiently.