ACE: Changing Liability Exposures Impact Restaurant Industry

As the U.S. economy continues to improve, the restaurant industry is experiencing substantial growth with analysts projecting there will be over 1 million restaurants and food service locations employing 14 million workers in 2015, according to ACE Group.

Liability claims can represent a major threat to a restaurant’s status, and even lead to bankruptcy. A new advisory by ACE highlights the critical liability risks that restaurants face due to this growth, and offers a series of proactive strategies to assist restaurant owners in managing these exposures and protecting their businesses.

“Restaurants: A Proactive Strategy for Managing Evolving Risks” was authored by Joseph Fobert, senior vice president, Corporate Risk Excess Casualty, ACE USA.

“In a highly competitive industry where profit margins are often razor thin, restaurant owners face a host of unique risks,” said Fobert. “From slip, trip, and fall liability, food safety, and even cyber security exposures from online payment systems, restaurant owners need to be prepared to manage crucial risks.”

Some key liability risk exposures include: cyber liability; premises maintenance and security; slips, trips and falls; electrical and fire hazards; indoor air quality, including carbon monoxide exposures; food quality control and liquor liability; as well as delivery operations risks.

According to Fobert, foodborne illnesses present the biggest risk to restaurants. A restaurant risk management program should include evaluation of the sourcing of the food, since some food may come from countries without stringent quality control.

Another costly risk are accidents involving food delivery drivers. A good risk management program will include background checks on potential drivers and confirmation of applicable insurance policies.

Source: ACE Group