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With social media providing easy access to consumers, it has become a focal point for restaurants in their marketing efforts. Approximately 80% of restaurants in the US use social media to establish and enhance their online presence, according to a 2013 eMarketer report. Facebook is the primary platform for restaurants’ consumer marketing, followed by Twitter, blogging sites, Pinterest, Instagram, Yelp and online reviews.

 

While Facebook is primarily thought of as a personal tool rather than a business tool, it works extremely well in the restaurant category. Diners can check in wherever they are and, in some cases, build up loyalty points for the number of check-ins. Facebook also gives the restaurant the option to offer specials to diners when they are on the premises. Some even allow customers to order drinks at a restaurant, rather than waiting for the server to appear. Pinterest also offers restaurant owners an opportunity to post photographs of their venue, drinks and dishes, and link back to the restaurant’s website. Yelp invites reviews from customers.Social media and restaurant insurance underwritingWhat you may not know is that social media is also becoming a key part of the restaurant insurance underwriting process. From a risk perspective, it’s a great tool for uncovering problems or discrepancies between an application and an online presence. Today, restaurant insurance underwriters look at your website, Facebook page, Tweets, MySpace, Instagram, Open Table, Yelp and even Google to see how you present your restaurant.Menus tell us what kind of a restaurant you are – whether you’re a fast food restaurant, a high-end gourmet restaurant or a family-friendly restaurant. Insurance products are generally designed to fit the specific needs of the type of restaurant. A fine dining restaurant, a family restaurant, and casual restaurants do not need or require the kind of insurance products designed for bars, taverns, sports bars and nightclubs, which have higher liquor receipts.Hours of operation are another area underwriters will review. If your restaurant is open past 1 AM, we assume you are serving more alcohol than food during the late night/early morning hours, which changes our perspective on risk. Let’s say your insurance application says you do not allow dancing; yet the photo gallery on your website shows a DJ playing music on a Friday night. That type of inconsistency is going to lead an underwriter to question the accuracy of the information he or she has received for the overall account.What you can doMy advice to restaurant owners is to continually update your website and monitor your online presence. Out-of-date information or inaccurate information on the internet, including social media, will delay the underwriting process. On the other hand, if your online presence is non-existent that makes us wonder how long you will be in business. No insurer wants to provide coverage to a restaurant that is not profitable or that has consistently negative customer reviews. Be sure that whoever is posting information to your Facebook page or doing your tweets is doing a good job of imparting accurate information. Monitor social media for problems such as an unhappy customer and work hard to alleviate those situations.ConclusionRestaurant insurance markets come and go – sometimes with alarming frequency. I suggest you look for an insurer or independent agent that specializes in restaurant coverage.  This will provide you with peace of mind and let you concentrate on building a profitable restaurant.   

Heidi Strommen is President of ProHost USA, a program administrator specializing in restaurant coverage. ProHost works exclusively with independent agents and brokers. Learn more about  Prohost USA and its products

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Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

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In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
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