Inventory. That monthly, sometimes weekly, exercise that almost every operator dreads doing — especially if month-end falls on a weekend! But it’s a necessary task to making sure that your cost of sales is in line and every good operator, GM and chef should appreciate knowing how their operation is performing.
There’s a Bigger Picture
But what are your reasons for completing inventory? Is it just so you know how your operation is performing? Is it to help discover missing inventory? Maybe you discover that one of the line cooks isn’t using a key ingredient in your signature dish…whatever the reason, let me add one more: Insurance claims…yep, insurance claims!
Recently, the Bellagio Hotel in Las Vegas, one of the Crown Jewels on the “Strip”, caught fire! Imagine a luxury hotel with (guessing) a $100 Million budget, some of the best, most attentive staff in the world, and hearing that it caught fire! How the..? What the…?
When It Hits Close To Home!
Imagine you get the call. It’s 2 am and it’s the local fire department telling you that your restaurant is on fire! But you just left your restaurant after a great Saturday night dinner service, inventory completed, and it’s now on fire!?! Thank God no one was injured, but your business is your life! Your only solace may be that you have your Agent’s personal cell phone number and you can start the claims process.
What does any of this have to do with inventory? Remember we said that in this scenario, you had just completed inventory. And because of that, the property coverage that you have built in your insurance policy should have a contingent for your inventory! So why is this important? Because, if you have an extensive wine list with high-end wines, how would you prove that you had them? How could you prove that the list of super-premium tequilas you’re so well known for was actually in the building? Your inventory!
Inventory Coverage is Key!
Many carriers, albeit not highly advertised, will allow for a little-known coverage form that covers your inventory (i.e., wine, spirits, and high-end food products like saffron, truffles, and other exotic ingredients). These items can add up, and quickly! This coverage form is outside of your regularly scheduled property limits yet it allows you to recover inventory items in addition to your equipment costs, FF&E, and other business and personal property.
What happens if you don’t have this coverage form on your policy? Don’t worry, all is not lost! Your property coverage limits should be such to help replace the cost…but you’ll likely only recover up to the limits of the property listed – and only if you have business and personal property protection!
So, you see, keeping a proper inventory, when paired with the right insurance coverage forms, can save you from a major financial hit if a disaster should strike! And believe me, if a fire can rock a Billion Dollar Hotel, it can happen to you, though we hope and pray it NEVER does.
Are You Covered? Are You Sure?
Now ask yourself this question: Does my coverage include my inventory? Are you sure? Have you seen the coverage form specifically on your policy? Have you asked your agent? No, you say? Call your Agent and specifically ask about this scenario. They should be able to tell you right away if your policy does or does not include coverage for inventory and if they’re not sure, well, it might be time to take a better look at your coverage and probably your Agent too.