Risks Restaurant Owners Need To Know

Owning a restaurant can be a dream come true despite the stress and hard work. However, running a restaurant business also comes with an array of risks and hazards, and you need to be prepared in case the unexpected happens. 

Luckily, The National Restaurant Association has provided us with a list covering all the various risks you could be facing as a restaurant owner/operator. Most importantly, it’s essential that you learn how to address new and well-known risks. 

Below, we have divided the risks into four different categories to help you navigate through them easily. 

1. Premises risks: this category touches on all concerns dealing with owning and/or renting your commercial property. This covers damages from nature, storms, vandalism, and food service risks. 

• Kitchen fires and smoke can cause significant injuries and structural damage. You should keep ventilation ducts clear of grease and dirt. 
• Patrons can easily fall and slip inside the restaurant and even outside in the parking lot and sidewalks. You can potentially lose the worth of a day of profits if you overlook potential hazards.
• Power outages, damages due to weather, and equipment breaking down can cause you to lose product and, therefore, income. However, Equipment Breakdown insurance can help you cover mechanical breakdowns. Likewise, Business Interruption insurance can help you cover costs associated with income lost if your business operation is affected by such risks.

2. Food service risks: customers can get sick at any time if you or your team haven’t handled the food appropriately. Restaurant goers can get sick from eating food that may have become spoiled during shipment and/or during the handling and preparation processes. Fortunately, Food Contamination insurance can cover your back and that of your customers.

• Over the past few years, customer expectations towards disclosing allergens have become more relevant. Customers need to be informed about allergens in the food products you serve that might contain gluten or peanuts, etc. even if the food is only handled and prepared near such ingredients.
• Your staff will need special training on food allergens, depending on your local and state laws.
• Don’t forget to have a food allergen response plan in the case of anaphylaxis.
• Ignorance is not an option to be disinformed about allergens. Depending on the jurisdiction and incident circumstances, you might be liable for an illness caused by the foods you serve.

3. Alcoholic beverage risks: liquor-related injuries, and damages are a real thing.

• This includes being aware and taking steps to prevent underage patrons from being served or recognizing people who are intoxicated or close to the edge.
• Depending on your local state laws, your employees might need training in alcohol service.
• On the other hand, you should consider Liquor Liability insurance to cover these risks. 

4. Staffing risks and employee turnover is to be expected, and retaining employees is a real challenge. The biggest challenge is finding and retaining employees in a high turnover environment. Managing restaurant risks also depends on your staff leadership and what they are prepared to do in order to manage risk issues. The safety of your employees and that of the patrons heavily rely on your team and their knowledge and capabilities. 

• On the other hand, staff risks are another issue you could face, such as employee theft. Staff members could potentially smuggle out supplies or cash from the drawer.
• Most common transactions are done by credit card, debit card, or smartphone. Your guests might disclose personal information that exposes them to loss, and this liability can extend beyond the restaurant. To be ready for such an event, you should consider getting Fidelity insurance to make sure your business and patrons are protected. 

5. Workplace harassment risks are also something all businesses should be aware of. We live in an era where we need to be sensitive, and understanding of racial, ethnic, religious, and sexual harassment. Restaurant managers need to establish and sustain respectful codes of conduct with all team members. You should consider Employment Practices liability insurance in this regard.  

At the end of the day, proper training in safety procedures can save your business money and prevent risks in the workplace. You need to make sure your staff is educated on these procedures and that if the unexpected happens, they are prepared. This also means you need certain insurance policies included in your commercial package so that all parties are protected if an accident does happen.

Contact one of our insurance specialists to determine whether your commercial and workers’ comp insurance programs are covering all of your bases.