When it comes to restaurants, all anybody talks about these days is Covid-19. Should restaurants open? Should they close? Are the public health restrictions placed upon them too harsh?
Forget about that a minute. Restaurant owners are some of the most pioneering and passionate business owners on the planet. Did you know the average profit margin of a restaurant is three to five percent?
What else but passion and bravery could lead a person to own a business where the margins are so slim and so many things can go wrong?
You need to protect your profit and restaurant insurance is how you do it. Read on, dear restaurant owner, about the necessity of insuring your restaurant.
Owning a Restaurant
Restaurant ownership is the dream of so many people who toil within the service industry. Go to a bar where cooks and waiters congregate after a long shift in the weeds and you’ll hear the conversations.
It’s one thing to talk about owning a restaurant. It’s another to invest your hard-earned money in a dream where you know you won’t see much return.
Yet, despite knowing that 60% of all restaurants close within the first year, and 80% close within the first five, people still do it. Why?
Passion. Any cook who works their way up through a kitchen culture that so often rembles a caste system to become an executive chef believes in their food. They want to present their vision with complete freedom.
Servers and bartenders who’ve spent years weeded in dining rooms and cocktail lounges experience the fatal flaws of a poor operation and believe they can do better. They know great food and wine and they know crisp service.
They believe they can do better. So they save their money, secure investors, and dive headfirst into one of the riskiest investments someone can make.
You felt that same call and decided you had a great restaurant concept. You secured investment, took out loans, crafted a menu, and now it’s time to open your doors.
Once you open to the public, however, you assume an enormous risk.
Restaurant Risks
If you stop and think about them for too long, the risks of owning a restaurant might prevent you from making the investment.
What other workplace features razor-sharp knives, 500-degree broilers, boiling fryer oil, and delicate glassware that’s hand washed? Then add the stress of a busy dinner rush where stressed workers can easily make a mistake.
On top of that, you’re inviting the public into this atmosphere. Sure, they’re not working in the kitchen. Yet, they’re surrounded by servers carrying trays of drinks and hot food.
It’s funny. The difference between a service industry veteran and someone who’s never worked a shift in a restaurant is massive. Servers, bartenders, and cooks operate like ducks.
They’re completely calm on the service while swimming underneath.
When you open up your restaurant to the public, you’re also assuming dietary risk. Your diners may have allergies that your servers or cooks weren’t aware of. Or if they were aware, they forgot.
Who covers that? The last thing you need is for someone to go into anaphylactic shock because they ate a dish featuring pine nuts when they have a tree-nut allergy.
Still, you open your doors to these risks in hospitality every single day.
Risk Reduction
As an owner, you train your staff on the steps of service you believe will provide diners with the out of this world experience that will keep them coming back. You teach them the proper ways to serve a bottle of wine and make a martini.
You quiz your staff about the menu ingredients so they can answer any questions. You make them take wine and spirits courses so they know all the ins and outs of your wine list. This is done to increase sales.
The cooks learn the recipes and know the proper cooking techniques for each dish. Yet mistakes still happen. They’re inevitable, and in a lot of these service scenarios, a mistake is no big deal.
When you train your staff on service techniques and beverage knowledge, you do so to increase your clientele and sales. You know from years of experience that an untrained staff freelancing through a shift is a recipe for poor reviews.
Though you desire to increase your business, you also have to train your workers to protect themselves, the diners, and the restaurant’s reputation. You need to train them to protect your business.
There are several ways you can train your staff to reduce your restaurant’s liability concerns. Here are a few.
Food and Beverage Safety Training
When you serve people food, you assume an incredible risk. Reduce your chance of a lawsuit for food poisoning or negligence by training your staff on food safety.
These food and beverage safety courses teach your entire staff about the proper temperatures to serve safe food. They also teach your staff how to avoid cross-contamination to prevent disease or allergic reactions.
OSHA Training
Safe restaurant staff is a happy and profitable staff. Restaurant work is dangerous. There is such a high occurrence of injury that it’s important you teach your staff OSHA procedures to reduce your worker’s compensation liability.
Alcohol Safety
Did you know your restaurant can be held liable if someone drinks too much at your establishment and injures someone on the road? It’s true and it’s called liquor liability. The good news is that you can help mitigate that risk through proper insurance policies.
When you deal with the public and their alcohol consumption, you are responsible for their safety. Because of this, you must teach your staff the proper way to serve alcohol safely.
Accidents Will Happen Regardless
Restaurant accidents will happen even if you train your staff. In the restaurant business, they’re unavoidable. That’s why you need an insurance agency you can trust.
Restaurant business insurance is the one, true way you can protect your business. Without it, you’re like a server without a wine opener. You’re like a cook working with only a butter knife.
Here’s how comprehensive restaurant insurance protects you.
General Liability
General liability is a type of policy that protects you from a number of insurance claims. This covers injury, property damage, and personal injury should you be found liable.
Say a patron warned a server about a severe onion allergy and they were served food containing onions. This insurance can cover you against situations like that.
This general liability is such a key component of restaurant insurance thanks to the amount of staff and diners who walk into your business on an everyday basis.
Workers Compensation
Your workers will get hurt. Combine a fast-paced atmosphere like a restaurant with all the potential dangers, and injury is unavoidable. You can reduce it with proper training, but the risk still remains.
Loss of Income
Anyone who works in the restaurant business knows all too well about the loss of income from this past year. This insurance protects you if your restaurant closes due to a covered insurance claim.
Given that your profit margins are already so slim, any time spent closed can cause financial ruin.
Property Damage
This covers you should any part of your restaurant property suffer damage. It’s quite an investment to open a restaurant. The equipment alone costs tens or hundreds of thousands of dollars.
Then consider the liquor and food inventory you carry on a daily basis. If something should occur that jeopardizes your food, your equipment, or your building you want to know you’re covered.
Crime and Vandalism
You can’t intimately know everyone you hire. If you own and operate a restaurant, your theft risk runs high. There’s just so much to steal.
There’s the money in your bank. There’s expensive food, wine, and liquor. If big-ticket items go missing, you don’t want to be on the hook for them.
Likewise, it’s impossible to know what will happen over time. Someone might come along and wreck your place. Protection from crime and vandalism helps secure your investment.
Liquor Liability
If you serve alcohol, someone will leave your restaurant intoxicated. While there are so many variables as to what happens once they walk out your door, you could be liable if you or your employees over-serve them.
Liquor liability covers you in case one of your patrons overindulges and injures themselves or others once they leave.
Restaurant Insurance Costs
Many restaurant insurance plans can be purchased a la carte. Some owners do this to reduce their financial premium burden.
Though the cost of a comprehensive restaurant insurance plan might seem expensive, the negative cost of an underinsured business will be much higher.
You’ve already laid so much on the line by opening a restaurant. Your bravery in the face of statistics and the passion of your belief in your restaurant’s business model deserve protection.
Are you a restaurant owner? You need comprehensive coverage. Contact us today and we’ll help you find the plan that best protects your investment.
