Common Restaurant Risks & How to Avoid Them
Owning a restaurant can be a risky business, but this should not discourage owners or those looking to open one.
In this article, we are going to look at some of the most common risks faced by restaurants, so you are aware before you open your doors.
To prepare, it is best practice to conduct a risk analysis to build up a comprehensive risk management plan. The most important part of this plan is the heart of this business: your employees.
Injured Employees
Protecting your team from harm in the workplace should be your top priority. Employee injury is a risk faced by every business, but the potential for injury is especially high in restaurants.
And since your employees handle your day-to-day operations, they can often help avert disastrous situations – if they have the proper training.
Here are some examples of injury risks faced by restaurant employees:
- Working with sharp objects like knives.
- Walking on slippery surfaces.
- Carrying heavy objects like trays of food.
- Working with open flames and hot surfaces.
While it is impossible to eliminate all these risks, minimizing them is easy. So how can you minimize these risks?
How to Minimize Chance of Injury
Making sure all employees have training in workplace safety is the most crucial step in protecting employees from accidental injury.
Knowledge is beneficial for your entire organization. For safety readiness, you can start by holding meetings on the topics of:
- Proper clothing to wear.
- How to handle sharp objects.
- How to navigate when carrying heavy objects.
- Actions to take when dealing with hot surfaces and open flames.
These training sessions should be mandatory for all new employees and available to everybody.
Customer Injuries
Employee injuries are not the only liability to look out for when you own a restaurant. Customers can get injured too.
Restaurants have a high volume of foot traffic, so the chances of a customer experiencing an accident like tripping over something on the floor or getting a cut from a chip in a plate are high.
One of the most common risks customers face when entering restaurants is wet floors. Unlike employees who have the training and are aware of the risks they are facing; customers do not know about these. This makes training that much more important. A trained employee knows how to protect customers by doing things like using wet floor signs when there is a spill.
Food & Drink Liability
You will have customers with food allergies. There is no way to know this unless the customer discloses it, but there have been cases made against restaurants for allergic reactions.
The best way to ensure your restaurant has protection against a claim is by listing common allergens on the menu. Here are examples of important things to list:
- Use of dairy and nuts.
- Products with wheat.
- Soy-based products.
- Shellfish and other seafood.
- Raw or undercooked items.
It is also important to ensure your kitchen staff is following food safety best practices. This means no cross-contamination and food has correct storage and preparation.
Note that if you promise allergen-free foods, extra steps should be in place to ensure they are safe to consume by people with allergies.
Alcohol Liability
Getting your liquor license and serving drinks opens your restaurant up to a whole new type of claim.
Remember, both the restaurant and employees serving drinks are liable, so everybody needs training on what to do in these situations.
Because of all the risks that come with serving alcohol at your restaurant, look into buying a liquor liability insurance policy to ensure protection.
Property Damage
Every restaurant should have commercial property insurance in place to protect from damages. This coverage protects your organization from things like vandalism, employee accidents, and natural wear and tear.
On the other hand, General Liability Insurance helps protect your restaurant from lawsuits and allegations pertaining to property damage and bodily harm while in or around your restaurant.
General Liability Insurance covers the costs related to a claim of:
- Bodily injury or property damage: in the event of bodily harm (a patron slips and injures themselves) or property damage (a server ruins a patron’s possessions).
- Reputational harm: for claims of malicious prosecution, libel, slander, wrongful eviction, violation of privacy.
- Advertising errors: in the event of copyright infringement via advertising.
- Medical payments: to cover medical costs if a patron (non-employee) sustains an injury at your restaurant.
Franchise Risk
If your restaurant is a franchise, you will face a lot of compliance risks. Here is a short overview of some of the risks you need to look out for when your restaurant is franchised:
- Make sure franchisees are following brand rules.
- Employee & customer safety protocols are in place for all franchise locations.
- All franchises turn in certificates of insurance and are in compliance.
Assuring that all these rules are followed by every location can be a difficult task, especially tracking insurance certificates. Keep reading to learn how this process can be eased.
How to Account for Risks
Now that you know the basic checklist to review, the best way to account for the risks your restaurant faces are by making sure there is insurance coverage in place for each one. This way, if a risk occurs, you are not left to pay for the damages.
An Extra Tip for You
When you have this many insurance policies in place, it is hard to keep up with all of them. Because of this, you need a Certificate of Insurance (COI) tracking software. This software allows you to upload your insurance documents and set reminders for when you need a renewal. You can also request documents from third parties you work with to make sure they have insurance and meet your requirements.
To learn more, visit our website or sign up for a free product demo.
