Each type of business opens doors to its own risk exposure. It is important to make sure that you have met with your agent to discuss the exposure you have in your establishment. There are 6 main liability exposures that apply to most restaurants.
1. Slip & Falls
Working with food creates the prime opportunity for wet floors between spills and cleanup. Some restaurants have carpeted eating areas to prevent this type of claim from happening; however, it isn’t guaranteed to prevent it. There are still many areas of a restaurant that are tiled such as the entry way, kitchen and restrooms.
Restaurant owners want to be sure that they have taken necessary precautions to clearly mark wet areas. They also need to ensure adequate coverage to protect themselves from liability to their patrons and employees. Carefully consider the working space of your facility. Ensure that your patrons and employees have room to get by without anything obstructing their path.
If you own a restaurant that serves alcohol, then your risk factor increases significantly. It is no secret that alcohol often leads to driving impaired. As of 2019, drunk driving was responsible for 40% of fatal car accidents. Your establishment could be named in a court of law even if the patron only enjoyed one beverage before leaving. Your restaurant should not only carry General Liability but also liquor liability if alcohol is served.
3. Hazardous Décor
The term hazardous décor refers to items such as candles. Candles create a lovely atmosphere. We might even enjoy them so much that we are forgetting their brilliant glow is fire. Fire is obviously very hazardous. A small candle may seem like nothing but when you think of how quickly a spark can turn into a raging fire, your thoughts may change. If you intend to use candles in your facility, then you will want to disclose this to your agent. You will also want to take proper care of where candles are placed and how many are grouped together. You should also consider the proximity to a water source.
4. Product Liability
Working with food provides opportunity for contamination no matter how clean we keep our restaurant. It can also lead to serving under cooked food. Regardless of the reason behind it, food borne illnesses are certainly a thing that restaurant owners need coverage for.
5. Employment Practices Liability
Employment practices liability insurance is something that every business should have regardless of industry. EPLI protects the employer from discrimination, sexual harassment, wrongful firing suits or anything that arises out of “employment practices”. This is an additional coverage. It is not part of your general liability.
Many restaurants also provide catering services. Catering may be included in your insurance coverage, but you need to double check before you take on your first client. Insurance policies do have general guidelines but are not one size fits all. If you weren’t doing catering when you first started your business, then it is critical that you double check that the right coverage is in place.
Right now, the world is in the midst of its first pandemic in ages. Restaurants are one of the businesses that have been greatly impacted by this. Many restaurants have been able to adjust their methods of doing business so that they can survive. If you own a restaurant then now might be a good time to review your insurance to make sure any changes you have made to how you do business are still covered by your policy.
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