You’ve taken the plunge and have decided to fulfil your lifelong dream of opening your own restaurant. In the midst of menu planning and choosing wallpaper for your feature wall, a sudden moment of panic grips your heart. You think to yourself, “What could go wrong?”.
When it comes to managing the risk in your business, considering the worst-case scenario is a good place to start. Just for a brief period, be as pessimistic as you possibly can, and write down all the things that could possibly go wrong in your business. Hey presto, you will have completed a risk analysis (albeit a basic one).
To help you get started, here is a list of five areas to think about. The intention is not to scare you away from ever opening your own restaurant, but to make sure you are appropriately protected in as many situations as possible.
Your restaurant is essentially all about people – the people who serve you, the people who work for you and the people you serve (including your own family). Looking after all the people involved in your business should be one of your main priorities.
Ensure that your staff are well trained on customer service, food handling, work safety and emergency procedures. They are responsible for day-to-day operations, so play an important role in helping you to take care of your customers.
Public and product liability insurance will protect your business should anything happen to your customers, service providers or members of the public in your restaurant. Your employees would need to be covered under Workers Compensation Insurance.
What you serve your customers can make or break your business. Aside from tasting incredible, making sure your food is fresh and prepared in a hygienic environment is vital. With the increase of diverse dietary preferences, disclosing the ingredients of each dish is becoming more important. On a more serious note, allergies to certain foods can prove to be fatal, making accurate disclosure a life or death requirement.
If there is a power outage or your freezer gives up the ghost, you could be at risk of food spoilage with significant financial loss. On a particularly hot day, you may not realise food has spoiled and your customers could end up with food poisoning.
Fire and storm are not as uncommon as we would like in Australia. With the impact of climate change, extreme weather conditions may become more prevalent. Property damage insurance provides protection for damage to your business contents, building or stock losses arising from unexpected insured incidents. Business interruption insurance, also known as business income insurance, will cover the loss of income from such an incident.
Wind, hail or even a falling umbrella could break your windows. Glass insurance will cover internal and external glass fixtures on the premises, such as windows, doors, mirrors, and glass displays.
If you experience a burglary at your restaurant, theft insurance provides cover for the loss of your contents and stock. If money is stolen, there is insurance available to cover this loss too.
A restaurant relies quite heavily on equipment and machinery – think fridges, freezers, cook tops, ovens, cash registers, coffee machines, air conditioning, etc. If any of these break down, it impacts service and could result in financial loss.
Regular maintenance of your equipment and machinery will minimise the risk of total breakdowns. Keeping track of warranties will help to control the cost of repairs if needed. Machinery and electronic equipment breakdown insurance is designed to cover the costs of replacing any insurable equipment or electronics that are part of running your business. There is also general property insurance that covers accidental loss or damage to portable or valuable property such as tools or laptops.
You will need to adhere to all the health and safety regulations which cover food hygiene, cleaning materials and safety equipment to name but a few. Health inspections are done on a regular basis so make sure you are constantly maintaining the standards required. There will also be licences you need to obtain and keep current to operate your business legally and safely.
Once you have a list of things that could go wrong with your business, you can ensure that you take out the appropriate cover for each situation (where available). Although you may not be able to foresee or cover every single circumstance, you will be far better prepared than not having gone through this exercise.
The art of running a restaurant involves many moving parts and one of the areas we can help with is ensuring that you have the specialised insurance cover you need. You invest so much time, money and effort in your business and we want to make sure your restaurant is protected. Ryno Insurance will work with you to customise insurance cover for your one-of-a-kind restaurant.