Loss of Attraction

What You Need to Know

Standard business interruption insurance only pays when your own property suffers direct physical damage, so it wouldn't pay a penny in a loss-of-attraction scenario. Loss of Attraction coverage – also called civil authority coverage or dependent property coverage – fills this gap by recognizing that your business success is interconnected with nearby properties and attractions.

The coverage typically requires a civil authority order prohibiting access to your area, or physical damage to a specified dependent property within a certain distance of your restaurant. It's typically added as an endorsement and comes with limitations, such as a maximum of 30 or 60 days of coverage.

Why It Matters for Restaurant Owners

Many restaurants depend heavily on foot traffic generated by nearby attractions, and the closure of those attractions can be financially devastating even if your restaurant remains physically undamaged.

If you operate a restaurant near a sports stadium and the stadium is damaged and closed for the entire season, your revenue could drop 50% or more, but standard business interruption insurance wouldn't cover this loss. Similarly, if your restaurant is in a shopping district and a major fire damages several neighboring buildings, causing the area to be closed off by the fire department, you may be forced to close or experience severely reduced traffic with no coverage under a standard policy.

If your restaurant's success depends significantly on one or more nearby attractions or businesses, Loss of Attraction coverage is an important endorsement to consider, protecting you from a real and potentially severe exposure that standard policies don't address.