Running a restaurant, bar, café, hotel or catering service comes with a level of innate risk. Paired with rapidly changing technology (i.e. Uber Eats) and customer demand, hospitality businesses face one of the most challenging risk landscapes of any industry.
Some of the top risks to hospitality and food businesses and tips to manage them
Common infections include salmonella, campylobacter from contaminated chicken, vibrio from raw shellfish and E. coli. Norovirus is also a leading cause of illness from contaminated food. This virus can be spread when food comes into contact with infected people or contaminated surfaces and can be very expensive for your business if it causes disruption such as shutting down for deep cleaning or for costs from bodily injury claims. Foodborne illness like salmonella lead to unpleasant symptoms, hospitalisations and even death in some cases. A salmonella outbreak earlier this year in SA has resulted in 51 people getting sick and 19 admitted to hospital. SA Health found that the likely source of contamination was related to handling of raw egg products.
Quick tips for preventing salmonella (Source: CDC)
- Cook poultry, ground beef, and eggs thoroughly. Do not eat or drink foods containing raw eggs, or raw (unpasteurised) milk.
- If you are served undercooked meat, poultry or eggs in a restaurant, don’t hesitate to send it back to the kitchen for further cooking.
- Wash hands, kitchen work surfaces, and utensils with soap and water immediately after they have been in contact with raw meat or poultry.
- Be particularly careful with foods prepared for infants, the elderly, and the immunocompromised.
- Wash hands with soap after handling reptiles, birds, or baby chicks, and after contact with pet faeces.
- Avoid direct or even indirect contact between reptiles and infants or immunocompromised persons.
- Don’t work with raw poultry or meat, and an infant (e.g., feed, change diaper) at the same time
Alcohol fuelled behaviour
Serving alcohol can increase the range of risks your business faces. You need to ensure you do not serve alcohol to a minor, or to someone who’s already intoxicated. Plus alcohol-fuelled customers can be at greater risk for being rowdy, causing injury or damaging property. In the US, venues serving alcohol are obliged by law to stop serving alcohol to customers that are believed to be considering driving while over the legal blood alcohol limit. If they take no action and the patron gets into a drink driving accident, the bar can be held liable.
While offering safe transportation to and from your venue can be a risk management tool in itself, it does come with its own risk in that if someone is injured in one of these vehicles your establishment may be found liable for their injuries.
Safety and security
Both security systems (including cyber security to prevent things like credit card fraud) and physical security to protect your guests, your people and your establishment are a risk. Slips and falls are one of the top risks for food service businesses, so paying attention to flooring, cleanliness and hazards is very important, too. Cuts and burns are also a major concern, so keeping a well-stocked first aid kit can help keep a minor burn or abrasion from turning into a major infection.
With technology and social media in play, feedback (rightly or wrongly) can spread like wildfire. Businesses now need to have the ability to monitor and respond appropriately to online comments in addition to publishing positive and proactive posts. Do you have a designated person (ideally even more than one) to keep an eye on your channels for activity, and media/marketing training to respond using your key messages? Getting expert help to at least get you started and provide training in this space can be well worth the investment.
A good business almost always attributes its success to its people. Yet, finding and keeping good people is one of the biggest challenges for many businesses. Ensuring that your people are capable and qualified is the bare minimum – they are also your brand ambassadors whether they are onsite or talking about your business at a barbeque. Investing in training and development for your team can also be an important part of your risk management framework.
Cooking, grease and kitchen-related fires can be a huge risk to your business. Businesses like this charcoal chicken shop and the Happy Chef in NSW have both experienced fires that are thought to have originated in the kitchen. Keeping flues, oven and cooking areas regularly cleaned is a crucial step to preventing these types of fires. You should also regularly check your fire safety equipment to make sure you have current and working fire extinguishers, fire blankets readily available, and fire suppression and sprinkler systems.
The role of insurance for restaurants, bars, cafes, hotels and catering
Preventing an incident from occurring is the best approach, but it’s not always possible. That’s where insurance plays its part. Having the correct insurance in place can help get you and your business back on your feet. An insurance broker can help tailor a solution to meet your needs, whether it’s fire/property damage, machinery breakdown, public and product liability, burglary, cash, employee dishonesty, or cyber insurance. Public and products liability protects against your legal liability to customers, clients and members of the public, i.e. third parties (not including employees), for bodily injury and property damage arising from your business activities and products. In some cases, the policy can cover the legal costs of investigating and defending a claim made against you, your people or your business. In other cases, insurance may cover lost income for a customer if they contracted salmonella poisoning and were unable to draw income (for example if the customer was a contractor by trade) while they recovered.
Public and products liability also protect your business from potential claims from customers slipping, suppliers tripping or even stomach-turning events like a tooth or finger being found in food. Business insurance can help protect your building and your contents including damage to your chairs, tables and fit out, along with machinery breakdown (with extensions for loss of stock). Water damage and fire are two of the biggest risks for restaurants, cafes and catering. Business interruption is an important solution to help protect the continuity and sustainability of your business should you experience disruption from an internal incident or even an external one that you don’t have control over, such as natural disasters. If you have employees, it’s important to ensure fair treatment. Management liability can help protect against bullying and harassment claims, discrimination, unfair dismissal and fines from Fair Work. And as a restaurant or cafe owner you could be exposed if you hold any personal or payment details from your customers or suppliers, or if you suffer a denial of service attack on your website and your customers are unable to order while you’re being held to ransom. We tell clients ‘if you use the internet for your business, you have cyber risk’.
Want to talk about your restaurant or cafe business or get a free quote? Contact us.
This information doesn’t take your personal or financial situation into account and may only be regarded as general advice. You should speak to your insurance broker before taking action. And, of course, always read the fine print (i.e. product disclosure statement) before purchasing any financial product.