- Career Corner
Insurance decision keeps his workers afloat after fire
by Michael Kinsman
But restaurant owner Dan Thomas wasn't in much of a party mood when he was summoned to his restaurant on the night of May 7. He saw eight fire engines and 85 firefighters and knew his restaurant was in deep trouble. "I can't describe the feeling I had," Thomas says. "I knew we had a big problem." A kitchen fire, ignited by deep fat spilled onto a hot grill, burned a substantial part of The Gathering, causing an estimated $800,000 in damages. It is expected to be three to six months before the restaurant reopens. "Usually when something like this happens, your workers sort of scatter and find new jobs, particularly in the restaurant business," says Jack Coleman, manager of the restaurant for the past 12 years. "When I saw what had happened, I thought I would definitely be looking for another job."
Like other workers, Coleman had already applied for state unemployment insurance by the time he discovered that owner Thomas was one step ahead. When buying business interruption insurance, Thomas had labeled 25 of his 27 employees as key employees. He paid an additional premium to ensure the workers would be paid if the restaurant were temporarily closed. With that designation, most workers will receive their full pay until the restaurant reopens. The only workers who will not receive full pay are waiters, waitresses and bartenders who depend on tips, as well as two employees who work fewer than 15 hours per week. The Gathering employees were quick to cancel their unemployment claims once they learned of this. They got their first insurance paychecks on Friday. "In my case, the waiter who opens the door in the morning or the cook who locks the doors at night are key employees," Thomas says. "If they weren't doing that, I'd be down there doing it." Thomas, who's operated the restaurant for 20 years, knows that he has built a loyal and efficient staff and that it would take a long time to reassemble such an able crew. "I would hate to start over from scratch," he says. "Some of these employees have been with me 15 or 18 years. They mean something to me." So even though Thomas paid into the state's unemployment insurance fund each week, he wanted to make sure that he could protect his workers if something caused his business to close temporarily. "It has cost me more, but how much more I don't know," he says. Eric Ehrenfeld, vice president of the Michael Ehrenfeld Co. insurance brokerage in San Diego, said that while most businesses have insurance to cover lost income due to business shutdowns, it's uncommon to find so many employees covered by insurance. "It's very rare," Ehrenfeld says. "Generally, though, these policies only cover the top management." Andrew Enrique, a full-time cook who has worked at The Gathering for six years, thinks Thomas is a savvy business owner. "He's got a good group of people that he wants to hang on to," Enrique says. "Why would you take the chance of hiring new people who might leave after a couple of days when you've already assembled this good group of workers? Would you trade your .385 batter for an unknown?" Because it employs many part-time workers, the restaurant industry's 56 percent turnover rate is the highest of any major industry, according to a report by Deloitte for 2004. Coleman predicts that at least 80 percent of The Gathering's employees will be back on the job the day the restaurant opens. "I'd like to say that 100 percent of them will be back, but that might be pushing it," he says. Thomas thinks he has done the right thing. He hopes his insurance will meet most of the costs of being temporarily out of business, including assuring him that his core staff will remain intact. "I'm in contact with my employees and hopefully when we can reopen the business, they'll return. But there's no guarantee." © Copley News Service |
 |
||||||
| Share Tweet | ||||||
|
||||||
|
||||||||||||
| ||||||||||||
| Popular Tags | ||||||||||||
|
||||||||||||
| Featured Testimonials | |||
|
|||
|
| Facts | |||
|
|||
|
|
Facebook comments: |
 |
|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
