THURSDAY, APRIL 29, 2021
Once you open a restaurant, you have a huge responsibility to meet client expectations, not to mention meeting basic quality control, risk management and regulatory compliance standards. After all, the food service business is highly personal, and can be very dangerous for both professionals and consumers. Therefore, as a restaurant owner, you have to take responsibility for all of the goings-on under your roof.
However, there’s no guarantee that something might go wrong in the restaurant at any time. When it does, then you could be on the line for picking up the pieces, and this includes taking responsibility for the losses that you might have caused to other people (even if they were unintentional). Rather than worry about struggling to meet these obligations yourself, you should instead turn to the liability insurance provided by your various commercial insurance benefits.
With our help, you can gain a closer understanding of precisely how different challenges might threaten your security, but also how your liability insurance can help you overcome them.
Understanding Liability Insurance
When you run a business, you have a responsibility not only to watch out for yourself, but also for your customers. It’s the same principle as driving a car. You have to take responsibility for your own safety and drive safely, but by doing so you also are being conscious of the safety of those around you. It’s a simple matter doing your best not to make mistakes, because your mistakes might harm others, too.
However, the fact of the matter is that you can’t prevent things from going wrong, no matter how hard you try. Sometimes, simple mistakes can cause harm to others, and no matter how unintentional those mistakes might have been, your responsibility is to make them right.
Still, doing so might cost you time, money and resources that your business on its own might not be able to reliably provide. Liability insurance is the resource that will help you meet those obligations.
A liability insurance policy will assist you in case you negligently cause harm to a third party—customers, competitors, vendors or even total strangers. It will provide the affected party compensation on your behalf, so that you aren’t forced to do so on your own. Therefore, the customer will receive compensation for their losses, while you won’t be forced to meet a financial obligation (that you might not be able to afford) all on your own.
Common Liability Risks In Your Restaurant
Within the sphere of a restaurant’s operations, there are numerous potential liability risks, and each could be as devastating to your company (and to others) as the next.
Usually, it will take several different liability policies in order to fully and effectively cover your operations. Let’s take a closer look at various liability loss scenarios that might threaten your restaurant.
Customer Injuries: There are plenty of ways for a customer to get hurt in your restaurant. Of course, there is the risk of food-borne illness. But other injury scenarios might involve someone slipping and falling on a wet floor, or getting burned by a hot plate on your buffet. Your general liability insurance will need to contain appropriate limits and endorsements to extend to the common injury risks that are likely to threaten in your establishment.
Property Damage: Perhaps you put together a catering spread to deliver to someone’s home for a party. You provide the warming plates to help keep the spread warm during the event. What you fail to notice is that one of your warming plates has an electrical flaw, which causes a fire to break out in the client’s house. Because it was your hot plate that caused the damage, then the client might sue your restaurant to demand compensation. Property damage liability insurance helps you cover the cost of the client’s property damage.
Product Injuries: Many restaurant owners sell products—homemade preserves, baking mixes, etc. But in the end, every plate of food that comes out of your kitchen is one of your products. Therefore, when one of these products causes harm to a client, it is your responsibility to compensate them. Ensure that the language in your general liability insurance is written to appropriately cover these risks.
Personal Injuries: Someone might allege that your business caused them a personal loss. For example, one of your competitors might allege that you engaged in unfair, false advertising which damaged their reputation. Your liability policy should contain adequate limits to address your loss potential in these instances.
Of course, there are other liability benefits which can be incorporated to your commercial insurance portfolio. Your commercial agent is committed to working with you to optimize the various policy options in ways that will allow them to provide you with critical assistance at times when you need it. Don’t hesitate to talk to us about the best way to incorporate optimized benefits into a cohesive plan.
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