Why Hiding Cash Is Bad For Your Restaurant

hidden wagesA type of coverage found under general liability policy is business income interruption coverage. This coverage compensates owners for lost income if unable to keep business open due to a valid claim.

To determine how much money you are to be compensated for, the claim’s adjuster looks at your financial records. This is where many restaurant owners stumble and find themselves in a precarious situation due to improper handling of money.

Hiding Cash Transactions: A Real-Life Scenario

You own a restaurant; gross sales are two million dollars per year. The first $1,000,000 is through credit card transactions while the second $1,000,000 is generated through cash. The first $1,000,000 can be tracked by the IRS; the second $1,000,000 cannot, because cash sales are generally not reported to the federal government.

One night, a deadly fire engulfs your restaurant and causes extensive damage. You file a claim under your general liability policy and expect to receive your losses back through your business income interruption coverage.

Your business is closed for 1 year while you are re-building. The claim’s adjuster comes back and says that you will only be receiving half of what you expected because of hiding cash transactions.

Consequences for Concealing Hidden Wages for Restaurants

  • Loss of Income
  • Employees leave because you can’t pay them
  • Default on Bank Note
  • Unable to pay Rent
  • The big one business permanently closes!

Ask yourself this question, is hiding cash transactions worth the possible devastation to the business and loss of income that directly impacts you and the ones you support?

To find out the answer to this question and more, contact Brian Kilcoyne at H&K Insurance today!

Brian Kilcoyne marries restaurant owners with custom policies all throughout the Greater Boston Area. He prides himself in protecting your assets just as much as he takes pride in watching his son do battle on the wrestling mat and skiing with his family. No matter if he’s in front of a client or atop a mountain, Brian puts forth his best effort in everything he does. Contact him at 617-612-6515 or email him at briankilcoyne@hkinsurance.com.