4 Trending Risks for Recession-Recovering Restaurants

When restaurant owners saw a steep drop-off in business several years ago, some decided that if the customers were not coming to them, they would take the food to the customers. Delivery of prepared meals moved beyond traditional pizza joints and began to show up in a variety of restaurants.

Unfortunately, many restaurant owners forgot to take insurance needs into their calculations. They may not have been aware that their Standard Commercial Auto coverage does not address their liability for drivers they hire who use their own cars, the typical arrangement for delivery services.

The first thing you can do as their agent is educate them about Hired and Non-Owned Auto coverage that will protect their company if they become the deep-pocket target of someone injured by a delivery driver. You can also advise them to evaluate their Umbrella coverage to make sure they have adequate limits now that their business will involve more use of automobiles. Jury awards for injuries from vehicle accidents have skyrocketed over the past decade.

2. CATERING/SPECIAL EVENTS

Some restaurants have opened up side businesses to provide food for off-site conferences or for special events such as golf tournaments, weddings, bar mitzvahs and other private functions. This catering service may be something that is provided regularly or as an infrequent, one-off occurrence. Either way, exposure to liability increases across several dimensions.

One area to examine is Workers' Compensation. Employees who are delivering food, lifting trays and equipment from delivery vans and putting them in place at unfamiliar event locations may be more exposed to back strains, slips and falls, and other injuries. You will want to help your restaurant customers ensure that their Workers' Comp coverage is not limited to activity within the four walls of their business and that the limits are adequate to address exposure.

If alcohol is being served at the event, the restaurant should make sure that all proper liability controls are in place.

3. SAFEGUARDING TRANSACTIONS

Another area that is evolving rapidly for restaurants is how consumers pay for their meals. To encourage more business, some restaurants now allow ordering and payment online. Others may have the capability to allow people to pay with their smartphones in place of a credit or debit card.

With increased exposure to ways for hackers to steal private information, including account numbers for credit and debit cards, restaurants should consider purchasing Cyber Liability insurance. These policies typically cover the costs of dealing with the state-by-state regulations that govern steps that must be taken in response to security breaches that expose people to identity theft and fraud.

4. TRENDY OFFERINGS

Increasingly, high-end restaurants are interested in demonstrating to potential diners that they are in line with the latest culinary trends. This includes offering locally grown produce and specially raised meats, using organic ingredients, and avoiding items that are allergens for some people.

Such restaurants should ensure that growers have proper procedures in place to limit contamination and deliver unspoiled food. They should also ask produce and meat providers to show proof of liability insurance with a highly rated insurance carrier and require that the restaurant be added as an additional insured.