SMART insurance tips for food business owners

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Managing risk in the food service industry can be just as important for the ongoing success of your small business as serving great coffee or your signature dish.

Every time you open your café, restaurant, bar, bakery, take- away shop to customers your small business is exposed to several risks.

The Alprostadil.org and Department of Commerce in Western Australia website provides an industry checklist , which is a very useful tool for owners of restaurants and other food service businesses to use to minimise many of business risks.

What insurable risks are cafes, restaurants and food businesses exposed to ?

Cafes , restaurants and other food service businesses, including caterers, are exposed to a number of real risks that can have significant financial and legal implications for the owners. Some of the main risks are:

  • Harm to customers: For example slips and falls, burns from hot food or drink, food poisoning
  • Harm to staff : For example slips and falls, injuries from working in congested kitchen, lifting or climbing , burns from :kitchen, hot food or drink,
  • Commercial building & contents damage : For example ; fire damages your premises ; fit out, stock ,cooking equipment and refrigeration
  • Theft and burglary : For example : Food service business deal with their liquid assets for criminals For example : money ; appliances , furniture, food, alcohol
  • Food spoilage : For example; power outage affects your refrigerator and food spoils
  • Damage caused by one of your vehicles: For example; if a staff member is involved in accident when delivering food or drinks in one of your vehicles
  • Loss of profits : For example; if your café or restaurant was forced to close for an extended period after a fire

How smart business owners can protect themselves against the risks faced in the food service industry.

Risk : Harm to customers:

If a customer slips and falls in your food service premises , burns themselves or someone else from hot food or drink you have served , or suffer food poisoning from food you have made Public an products liability insurance may provide protection for you against damages claimed by your customers ; including legal defence costs.

SMART food service business owners may be able mitigate damages arising from slips and falls to customers with public liability insurance.

Risk : Harm to staff :

If one of your staff members slips and falls in your food service premises, injuries themselves working in your congested kitchen, or while lifting produce, falls from a step ladder or burns themselves in your kitchen or when serving hot food or drink workers compensation insurance and management liability insurance may provide protection for you against damages claimed by your staff ; including legal defence costs.

Risk : Commercial building & contents damage

If a fire damages your food services premises ; including the fit out, cooking equipment, stock and refrigeration commercial property insurance; fire and perils may help you pay for restoration of your premises.

Smart business insurance pro broker tip:

  • In a major or total loss situation; such as a bad fire , you need to nominate the full replacement costs of all the items you want your insurance to cover for.
  • That is the full value of the fit out, cooking equipment, stock and refrigeration (and any money ).
  • In the past some food service business owners have been badly burnt (pardon the pun) by underinsuring the value of some or all items to save a few dollars on the premiums.
  • Ask you SMART business insurance broker about the “underinsurance “ clause enforced by all the major insurance companies so you can make an informed decision.
  • It’s not worth it : disclose the full value of all items and sleep at night.

SMART food service business owners insure the full value of buildings and contents so that they are covered adequately if there is a major or total loss form an event like a fire.

Risk: Theft and burglary

If your premises is burgled and money from your till or safe is taken ; appliances , furniture, food, alcohol stolen of damage theft and burglary cover(Typically as part of commercial property insurance or business insurance pack ) may pay for the replacement costs.

Smart business insurance pro broker tip:

  • Keep good records of the value of items to make it easy for the insurance company to pay you the full amount claimed.
  • Especially with money; be able to substantiate the amount claimed.

SMART food service business owners insure for the full potential loss from theft and burglary. They are aware that they can be a target to thieves ad they deal with their liquid assets for criminals For example : money ; appliances , furniture, food, alcohol.

Risk: Food spoilage

If the refrigerator in your café or restaurant suffers a power outage ruining your stock of food , or business interruption insurance may cover the value of any food spoilt by the breakdown.

Public liability insurance may cover you if you unknowingly serve spoilt food that causes food poisoning to a customer

Smart business insurance pro broker tip:

Conditions apply. Ask your SMART business insurance broker for details regarding minimum claims qualification criteria, policy excesses and limits.

Risk: Damage caused by one of your vehicles

If a staff member is involved in accident when delivering food or drinks in one of your vehicles commercial vehicle insurance may cover the damage to your vehicle and the damage caused to a third party.

Smart business insurance pro broker tip:

  • Specify business activities performed in your vehicle and name drivers. Take special care with young drivers and understand the minimum age and excesses on your specific policy as they vary from insurance companies

Commercial vehicle insurance may cover the damage to your business vehicle’s ; and also any damage they cause to third party.

Risk: Loss of profits

if your café or restaurant was forced to close for an extended period after a fire business interruption insurance may cover you for loss of profits until you are able to trade at a similar level again.

Smart business insurance pro broker tip:

  • It can take a lot longer to get back to normal trading than you think. Insurance companies sometimes take many months to settle on large claim ; councils take a long time to provide approval; machinery and fit out that are acceptable to you may not be readily available, and customers may take some time to know you are open again .
  • 24 months minimum indemnity period is recommended.

Business interruption insurance may cover for you loss of profits if you cannot trade for an extended period.

More info about insurance for your food service business

Trying to work out what insurance your food service business needs and then shopping around for a policy that is both affordable and suitable can be complex, time consuming and risky if you get it wrong.

There is now a smarter way.

SMART business insurance broker pro tip:

  • Wherever you are in Australia when you contact SMART business insurance , your friendly business insurance broker may be able to help answer your questions and find you suitable and affordable insurance for your café , restaurant or catering business.
  • The SMART way means fast, friendly and considered service, so that you feel comfortable that you are managing your food service risks suitably at a reasonable cost. WE SHOP. YOU SAVE.

GET a SMART Quote 1300 542 573 Smart Business Insurance

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