Restaurant owners already know the meaning of the word “busy.” Nonetheless, when a special occasion pops up it can be frantic. You serve more people, employees sometimes ignore safety procedures, and you increase your liability risk.
Here are a few insurance coverages to consider for liability protection, especially during busy seasons – such as the fast-approaching Valentine’s Day.
Restaurant Insurance
Restaurant insurance is a business insurance policy tailored specifically to your industry. You can choose from many liability options, but your policy also provides the basic coverage you would expect from any business policy.
For instance, you’re protected from the burden of medical costs and damages if a person is injured on your property under your general liability coverage. You also have protection from specified perils such as fire, theft, lightning, hail, and more.
Restaurant insurance often offers an affordable solution and improved coverage for the specific risks involved in operating a restaurant.
Product Liability
This coverage is very important for restaurant owners, because you’re responsible for the food and drink you serve. If a customer contracts a food-borne illness or suffers from food poisoning, and your restaurant is responsible, they could sue you for their medical costs and punitive damages.
According to the CDC, 60% of all food-borne illnesses and 39% of associated illnesses are from foods prepared in restaurants. Product liability coverage can safeguard you from steep legal costs if you’re sued.
In 1993, Jack in the Box faced 90 lawsuits due to E.coli contamination, teetered on the edge of bankruptcy, and paid out over $15.6 million in settlements. If it can happen to a big player, it can certainly happen to any restaurant, despite your best food safety efforts.
Liquor Liability
Many restaurants choose to serve liquor to increase sales. However, serving alcohol also increases risk. Your employees must serve responsibly or you could be held liable for the actions of an intoxicated customer. If their actions lead to injury or death, your business could also face a lawsuit and criminal penalties.
Serving alcohol also increases risk for property damage, violence, and injuries. Dram shop laws exist in most states which allow a person to sue the establishment that furnished the liquor. Liquor liability coverage provides a financial cushion against legal costs.
Hired & Employee Vehicle Liability
If your restaurant rents vehicles to pick up supplies or do deliveries, or your employees use their personal vehicles while working for you, you may want to consider a commercial auto insurance policy. If they’re in an accident while on the clock, you could be sued if they’re in an accident. This coverage compensates you for legal costs.
Employee Crimes
Unfortunately, employee theft is a real problem in business. A 2017 report reveals that 55% of embezzlement occurs in businesses with less than 100 employees. Over a quarter of these thefts went on for over five years before they were discovered.
While large-scale theft is more common in white-collar industries, there’s no doubt restaurateurs lose money, too. Missing stock, discrepancies in cash outs, and pocketed money from meals and drinks all cut into your bottom line.
Your business can also be held accountable for the wrongful negligent or intentional tort actions of your employees while they are working for you, such as credit card fraud. Coverage for employee crimes can shield you from the costs associated with lawsuits.
As a restaurant owner you already face many daily challenges. Managing the unique risks of serving food and drink is important for your success. Discuss your coverage with your insurance agent to ensure that you’re protected from these common liabilities.
