Running a restaurant business is not for the faint of heart. There are multiple things to oversee all at once - such as inventory, proper staffing, accounting, menu updates, and so on. And on top of all these, if you are experiencing a surge in takeouts due to circumstances like severe weather conditions or a global pandemic, you may be wondering if your insurance policy is enough to cover all the associated risks and possible liabilities. If so, then you’re in the right place. This article covers the types of insurance you will need to protect you from the legal and financial risks associated with takeouts. While we’re on the subject, we’ll also cover the insurance coverage you will need if you will deliver takeout food to your customers.
Without further ado, let’s get started!
What is Restaurant Takeout Insurance and Why Is It So Important?
Currently, there are over 65,000 restaurants in Canada. In such a competitive environment, many businesses are challenged to maintain a sufficient bottom line. This is why there is very little room for error especially when it comes to managing risk. In a highly litigious society, liabilities from unforeseen events and accidents can really set back a business or even bring it to a grinding halt.
In the global pandemic that broke out early in 2020, the already-challenging landscape of restaurant business is presented with even more challenges. One of such challenges is the change in customer behaviour wherein many refuse to eat out and prefer to instead have takeouts. This is where restaurant takeout insurance comes in. Restaurant takeout insurance pertains to specific coverages in a restaurant insurance policy that cover the risks associated with takeouts - and in some cases, delivered food as well.
What Coverages Should My Restaurant Insurance Have For Food Takeout and Delivery ?
Product liability is a concern for all kinds of restaurants because food can be contaminated with all kinds of pathogens - such as bacteria, viruses, parasites and various other toxins. And this can happen to any kind of food whether it’s served within the restaurant, is bought as takeout, or is delivered to the customer.
Food contamination can happen because of poor sanitation practices on the part of the staff members. But even with the most stringent and strictly enforced sanitation practices, there are still other sources of food contamination that are more difficult to control. Ingredients obtained from suppliers may be mishandled at some point before reaching the restaurant. And in such cases, even if an outside entity caused the food contamination, the restaurant will still be liable for food-borne illnesses caused by contaminated food.
On top of microscopic pathogens and chemicals, product liability cases can also include foreign objects in the food which causes an injury to the customer - such as small wires, chipped glass, and other small objects that can easily fall in the food without being noticed.
Here are some example scenarios where you would benefit from having product liability coverage:
- A sick staff member fails to wash their hands or follow other sanitation protocols and spreads germs on the food
- A staff member undercooks the food and leaves it out at an unsafe temperature and the food starts to go bad
- A staff member doesn’t notice a small wire falling into the prepared food
- Utensils are not properly cleaned and causes cross contamination
- The supplier gives your restaurant tainted ingredients
- Supplied refrigerated food was left out too long at some stage of transportation or delivery to your restaurant, causing bacteria to grow
As long as your restaurant has a physical place where customers can walk in or stay, you can be held financially and legally responsible if they are injured on-site. The same goes for suppliers and other third-party individuals that walk into your restaurant’s premises. When it comes to takeouts, although customers only stay within your premises for a short period of time, accidents can still happen. And any instance wherein a restaurant business is unable to provide a safe environment for customers, suppliers, and the like, the business will be held accountable for that.
Here are a few example scenarios wherein you will benefit from having accidental injury coverage:
- A panel or fixture falls from the ceiling and causes a third party to get injured
- One of the restaurant’s furniture is defective and causes an injury to a third party
- The restaurant failed to put a signage over newly mopped floors, causing a third party to slip and get injured
- The restaurant does not have handrails and/or proper lighting on their staircase, causing a third party to fall and get injured
It’s common for a restaurant to have their own commercial vehicles for delivering food or for carrying out any tasks related to the business. If your restaurant falls under this classification, your business can be liable if any damages to a property, bodily injury, or death is caused by an accident involving your commercial vehicle. Furthermore, costs can pile up if the vehicle is damaged whether it’s because of an accident or because of external factors. This is why it’s important to make sure that you have coverage for such risks.
Securing coverage for your commercial vehicles can be valuable in cases such as:
- One of your commercial vehicles gets involved in a crash that results in the injury or death of the driver, passengers, or a third party
- One of your commercial vehicles damages another person’s property
- The commercial vehicle is stolen, vandalized, or damaged by a natural disaster
Where Can I Get a Restaurant Insurance That Fits All My Needs?
What we’ve covered in the above sections are only specific coverages that you can include in your restaurant insurance policy - those that are directly related to takeouts and deliveries. But of course, there are other types of coverage that your restaurant might need to address risks associated with your property, equipment, liquor service, and so on.
Here at KASE Insurance, we understand that every business has its unique needs. This is why we take a customer-centric approach when it comes to putting together insurance policies for our clients. Together, we can make a restaurant insurance policy that fits your business perfectly.