Special Insurance Issues For Restaurant Owners

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Your chance to own your restaurant could be the best opportunity of your life. Restaurant business can also pose a high insurance risk. Your dream can be kept safe by having insurance protection and a realistic plan for reducing your risk.

Kitchen Fires – Prevention is your best safeguard! You should ensure that your fire suppression systems are in place and properly maintained. Insurance companies often require that you have an adequate fire suppression system in place and a vent hood overhead for any heat producing equipment. It is important to properly handle grease in the kitchen. Grease poses a risk of starting a fire or fuelling one that has been started from another source. Note: Since January 1, 2008 the Texas Insurance Code has required that commercial cooking areas be protected with a UL300 wet foam system. A dry chemical system has been declared obsolete by the fire code inspectors. The use of hotter oil fryers in food preparation has led to this new standard. Only a Wet Foam system can cool enough to prevent these cooking oils reigniting.

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Electric Fire – Second to a cooking or a grease fire, overloaded or malfunctioning electrical equipment is a particular risk for restaurants. Three restaurants in Austin were destroyed by electrical problems in 2006. When I inspect a prospective food service company, I pay particular attention to electrical problems in the kitchens. Many times I find faulty electrical wiring, worn out appliances and circuits that are too loaded. These are all dangerous risks.

Slip & Fall Lawsuits – While having a customer slip and fall is a risk for any business open to the public, restaurants are at particular risk because of the large number of customer visits and the added hazard of food spills. General Liability Insurance is crucial to reduce your risk to the public. After a customer fell into a pothole in their parking lot, one of our restaurant clients was sued. You should walk around the entire location of your restaurant to identify any obstacles or walking surfaces that might cause people to trip or fall. These hazards should be eliminated if possible. If they cannot be removed, mark them as potential trip hazards. Stairs should be protected with sturdy handrails. Prepare a plan and have the equipment ready in case of food spillages. Make sure your staff and shift managers are aware of the importance of having spills cleaned up quickly for guest safety.

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Food Related Lawsuits Restaurant owners may be sued if a customer is ill from eating or has contracted a foodborne illness. Restaurants must ensure that food is handled properly. In Minnesota, for example, salmonella was a common cause of illness in cafe patrons. Safe food handling is not something you can do by taking shortcuts. Make sure you know where your food products come from. You can keep your food supply fresh by ordering wisely and throwing away food that is nearing expiration. Keep food preparation areas clean.

Liquor Liability You should ensure that you have insurance in place to protect yourself from any alcohol-related lawsuits. Serving patrons who are under-aged or intoxicated can put your Liquor License at risk. Ensure that your alcohol servers are TABC (Texas Alcohol Beverage Commission), certified, and follow the TABC rules. With the proper practices, beer or wine can be an important profit centre for your restaurant venture. Include Liquor Liability insurance in your policy.

Property Risks – Operating a restaurant often includes considerable equipment, building improvements and food stock. A lease may also require adequate property insurance protection. Imagine what it would cost to restore your restaurant following a major fire. Be sure to include the lease improvements to restore your space, the kitchen equipment & built-ins, tableware and food stocks.

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Employer Injury Lawsuits – A food establishment is very much a people driven business. Your most valuable asset is your staff. There are inherent risks for injury when food preparation is done. With the right training and safety equipment, you can minimize kitchen hazards. Slipping and falling is another common injury that employees receive in food service establishments. Employers need to have worker’s compensation insurance in order to protect themselves against liability. This insurance is essential for employers because of the additional risks that come with working in restaurants. A key strategy is to reduce your risk.