ELIGIBILITY

1. Classifications

• For eligible classifications, see list of 70 available Restaurant Classifications. Only well managed, better-than-average family style and fast food restaurants are eligible.
• For Oriental-Family-Style Restaurants, operation of Karaoke facility in conjunction with restaurant operation does not make the risk ineligible under this Program. However, if the receipts from Karaoke operation exceed 10% of total restaurant receipts, coverage may not be bound by the field producer, but the risk should be referred to the Company Underwriting before binding.
• When Karaoke is operated as a part of a separate Night Club operation, the risk may not be eligible under MVP Restaurant program, even if the Night Club is operated by the same owner of the restaurant.

2. Coverage
Both Business Personal Property (contents) and Business Liability (general liability) must be provided under MVP.

3. Maximum Values
The total replacement cost value for property coverage at any one location may not exceed $5,000,000. If inflation guard increases building value such that the property values exceed this limitation, this is acceptable.

4. Financial
The restaurant must have been profitable, based on at least one of the following standards:

• Private Financial Statement provided, showing a profit in the most recent twelve-month period and trending favorable from prior periods.
• D&B secured, showing above industry averages, on a ratio basis (DUG preferred) in the most current period.

5. Management
Same management for the most recent three years, unless part of a franchise. Franchisers usually provide some type of financial support for the franchisees and usually have strict training and guidelines, which serve to aid in the success of the restaurant.

Exception to this guide is a newly established Oriental Family-Style Restaurant whose owner has had a minimum three-years experience in running a successful restaurant operation overseas before settling in the United States.

 
INELIGIBLE RISKS

1. Alcohol/Liquor Sales

• Over 30% of total restaurant gross receipts.
• Allowing alcoholic beverages to be brought onto the premises by customers.
• Featuring "Happy Hour" or similar events.
• Separate bar area, unless the square footage of the bar area is 15% or less of the square footage for the entire restaurant. This area should be used mainly s a waiting area for customers. Entertainment and liquor receipt restrictions apply.

2. Activities

• Seasonal operations (close for 3 weeks or more consecutive each year).
• Sports Bars/Restaurants.
• Bed and breakfasts, resorts, or convention centers.
• Valet parking services.
• Live entertainment or dancing.
• Twenty-four hour operations or open after 12:00 midnight. (Exception can be granted by underwriter)
• Tableside cooking.
• Off premises catering operations unless under 10% of total sales.
• Owner and operated in conjunction with gasoline stations or with gas pumps on premises.

3. Building Characteristics

• Multi-story building having cooking exhaust system ducts passing through upper floors unless the ducts are enclosed in an approved noncombustible assembly.
• Less than two adequately lighted and unobstructed exits remote from each other per floor.
• Building exposed to vehicles parked facing the building without curbing or other substantial vehicle barriers.
• Located in a deteriorated or declining neighborhood and/or delivering of food to such areas.
• Building exceeding three stories in height, for building coverage, unless fire resistive.
• Buildings more than 45 years old are not eligible unless the roof, plumbing, heating, air conditioning and electrical wiring have been updated within the past 15 years.

4. Other

• Business under contract of sale (our applicant selling or about to sell).
• Use of flammable solvents or other flammable cleaning aids to clean equipment.
• Operating without a service contract with a reputable pest control company providing for a minimum of monthly inspection and exterminating services.
• Use of subdued lighting (usually intended to create a special atmosphere) unless specific illumination of all steps and potential trip hazards are provided.
• Lessor's Risk coverage. We want to insure the operation.
• Protection Class 10 properties.

 
LOSS CONTROL REQUIREMENTS

1. Trash/Disposal

• Garbage and trash must be removed from the building daily and stored in covered metal cans or dumpsters located at a safe distance from the building.
• Ashtrays must be emptied into separate noncombustible containers and should not be combined with other trash unless thoroughly soaked in water first. Ashes may not be rolled up in tablecloths.

2. Tripping Hazards

• Carpeting or floor covering must not be torn or frayed and must be free of tripping hazards.
• Floors must be clean, dry, uncluttered, non-slip and free of tripping hazards.
• Stairways must be equipped with handrails, well lighted and free of tripping hazards.
• Parking areas and walkways must be well illuminated, properly marked for parking spaces and free of debris and potholes.
• Plans must be in place for the prompt and effective removal of snow and ice from the parking lot and walkways.

3. Kitchen
Kitchen area MUST MEET NFPA (National Fire Protection Association) Standard 96 for fire protection, which includes:

• An operative automatic extinguishing system protecting hoods, ducts, and all cooking surfaces including deep fat fryers. The system should also have an operative manual release away from the cooking area.
• A contract with a reputable fire extinguisher maintenance company for a minimum of annual inspections and maintenance of the extinguishing Systems. Certificates of inspection must be on display or easily accessible to inspectors.
• Operative portable extinguishers available in the kitchen, recharged and tagged annually at a minimum.
• An operative automatic fuel shut-off to all cooking appliances and fans activated by the release of an operative automatic extinguishing system.
• An operative thermostat and high temperature shut-off to deep fat fryers.
• A regular in-house schedule for cleaning hoods, ducts and filters. Filters, hood and duct system should be cleaned at least monthly.
• A minimum of semi-annual cleaning by a professional firm of the hood, ducts and filters. Preferably, a written record of maintenance and service should be maintained with dates of cleaning/maintenance and by whom.
• Minimum clearance for hoods and ducts is 18 inches from all combustible construction.

4. Egress

• Emergency doors should be equipped with panic hardware to permit easy egress, be properly marked, and be lighted with exit signs.
• Back-up emergency lighting systems should take over, in the event of a power failure.
• Basement area storage must be neat and without obstruction of any means of egress. If five or more persons can be in basement area or if public access is possible, at least two adequately lighted and unobstructed exists, remote from each other, must be provided.

5. Other

• Strict quality control procedures must be maintained. Perishables must be properly refrigerated and be tracked by a dating system to ensure that only fresh foods are served.
• Employees must be trained in the proper method of assisting a choking patron; i.e., Heimlich Maneuver.
• Employees must be trained in emergency evacuation procedures, and all new employees must receive orientation in safety and emergency procedures.
• Dishwashing water temperature must consistently achieve temperature required to sanitize dishware and utensils.

 
ADDITIONAL REQUIREMENTS

1. Apartments
If the building contains apartments, we require operative automatic sprinkler protection as follows:

• If the restaurant is on the first floor with apartments above or alongside, the entire restaurant must be protected by an operative automatic sprinkler system, and the apartments must have operative hard-wired heat/smoke detectors.
• If the restaurant is on other than the first floor, the entire building must be protected by an operative automatic sprinkler system.
• We usually will not consider any building with more than two (2) floors of residential units.

2. Liability Charges
Additional Liability Charges must be made for the following:

• Playgrounds - indoor or outdoor amusement areas which may include slides, swings, mechanical rides or other play equipment.
• More than two amusement devices - video games, pinball machines, or other similar devices.
• For Oriental Family-Style Restaurants which serve only beer and wine (no hard liquor) the following rules and rates apply to Liquor Liability coverage, superceding the Liquor Liability rules shown on MVP Restaurant Program Rates pages. For this rule and rates to apply, however, the receipts from beer and wine served shall not exceed 10% of total restaurant receipts. For the restaurants that serve hard liquors in addition to beer and wine, the Liquor Liability Rules and Rates on the MVP Restaurant program rate page still apply.

3. Non-Owned Auto
Separate guidelines have been included in the MVP GENERAL UNDERWRITING GUIDELINES. Please refer to these pages when considering Non-Owned coverage for any Restaurant risks.

4. Other
MVP General Underwriting Guidelines must also be referenced for guidelines, which pertain to all MVP products inclusive of Restaurant.