Special Insurance Issues For Restaurant Owners
Owning your own restaurant may be your opportunity of a lifetime. A restaurant business is also an intense insurance risk. A realistic plan to reduce your risk coupled with insurance protection can help keep your dream a safe investment.
Kitchen Fires -
Prevention is your best safeguard! Be sure that you have appropriate fire suppression systems in place and maintained. Insurance companies typically require that your heat producing cooking equipment, particularly grease sources (fryers, grills, ranges), have a fire suppression system and vent hood overhead. Also, grease handling in the kitchen is very important. Grease presents a high risk of both starting a fire and fuelling a fire started from another source. Note: As of January 1, 2008, Texas Insurance Code requires commercial cooking areas be protected by a UL 300 Wet Foam system. A dry chemical system is now considered obsolete and will be "red tagged" by fire code inspectors. This new higher standard has evolved due to the use of new hotter fryer oils in food preparation. Only a Wet Foam system has the capability to cool a fire sufficiently to keep these cooking oils from reigniting.
Electrical Fire -
Second to a cooking or a grease fire, overloaded or malfunctioning electrical equipment is a particular risk for restaurants. Austin had three restaurants burn to the ground due to electrical malfunctions in 2006 (Chili's on Stassney, East Austin's Berts BBQ and a Chinese Buffet). I particularly look for electrical issues in the kitchens when I do a field inspection of a food service prospect. I often see jury-rigged electrical wiring, worn-out appliances and overloaded circuits. There is no good reason to take these 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 protection is critical for your risk to the public. One of our restaurant client's was sued after a patron tripped in a pothole in the parking lot in 2006. Walk your entire business location and look for any irregular walking surface or other hazard in your public space that can cause a person to trip and fall. Eliminate these hazards if possible and mark potential trip hazards that can't be removed. Protect stairs with strong handrails. Potential food spills need a response plan and equipment ready. Be sure that your employees and shift managers know how important it is to your guest's safety (and your financial safety) to have any spills promptly cleaned-up.
Food Related Lawsuits -
Restaurant owners can be sued after a customer becomes ill after eating and contracting a food borne illness. Safe handling of food is an important priority for any restaurant. As an example, in 2008, many patrons of a Minnesota cafe became ill with salmonella after eating a raw jalapeno pepper garnish. There are no short-cuts in safe food handling. Know your food product sources. Keep your food inventory fresh by ordering sensibly and discarding any food approaching expiration. Keep your food preparation areas clean and uncontaminated.
Liquor Liability -
If you serve beer, wine or other liquor, be sure you are protected from lawsuits resulting from alcohol-related incidents. Don't risk you Liquor License or a lawsuit by serving intoxicated or under-aged patrons. Have your alcohol servers TABC (Texas Alcohol Beverage Commission) certified and enforce the TABC rules. Beer and Wine can be an important profit center for your restaurant venture with appropriate practices. Be sure to include Liquor Liability coverage in your insurance policy.
Property Risks -
Operating a restaurant often includes considerable equipment, building improvements and food stock. Adequate property insurance protection is critical and may also be required by your lease. Visualize what it would take to restore your restaurant after a major fire. Be sure to include the lease improvements to restore your space, the kitchen equipment & built-ins, tableware and food stocks.
Employee Injury Lawsuits -
A food establishment is very much a people driven business. Your hired help is your biggest asset and one of your biggest lawsuit risks. Food preparation has some inherent hazards for employee injuries. Minimize the kitchen risks with appropriate training and safety appliances. Another typical injury for employees in food service establishments is slipping and falling. Worker's Compensation Insurance is critical liability protection for any employer. The added risks of working in a restaurant environment increase the need for this protection. Risk reduction is also an important strategy.
Conclusion
Prevention is your best insurance in the restaurant business! Understand the special risks that you have as a restaurant owner and do what you can to reduce them. Buy appropriate commercial insurance protection to help make your food service venture a safer investment. For help on restaurant insurance, please link: http://www.quoteaustininsurance.com/pages/home/restaurant.php
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