Article

A winning recipe — 4 tips to reduce liability in restaurants

To reduce the risk of liability lawsuits, restaurants should adhere to four strategies — attention, prevention, cooperation and mitigation.

July 8, 2015

By Stephen A. Waldman, Waldman Bros’ partner and chief executive officer.  

From restaurants to catering, working with the public brings risks, including lawsuits. Spanning liquor liability to slips and falls and food poisoning, accidents can happen every day, no matter how well- prepared business owners are.

With more than 40 years of experience in the insurance industry, one question I’m continually asked is “How can I reduce the risk of liability lawsuits for my business?” The answer is quite simple — attention, prevention, cooperation and mitigation.

Attention

The best way to avoid potential accidents in a restaurant environment is to be aware. Maintaining an atmosphere of constant awareness of what it takes to create and provide a safe environment should be a key component of every business owner’s management responsibility.

Employees should pay attention to various situations that could present risks to customers, such as water on the floor or broken glass. Any dangerous circumstance or work activity that could lead to injury should be reported and addressed immediately.

Basic safety practices begin with knowledge-sharing. Restaurants should have comprehensive polices, supported by procedures that help maintain a safe environment to protect against incidents. If an insurance or legal claim is filed, any evidence showing the restaurant violated its own procedures could be damaging.

Prevention

Restaurant management should perform regular walk-throughs and check-ups to determine where hazards lurk. In addition, restaurants should invest in the latest safety technology and regularly train employees on appropriate procedures.

Maintaining sanitation and cleanliness is an integral part of preventing risk. Cleanliness and food storage protocol should be held to the highest standard by hiring an outside expert to perform regular, unscheduled audits of the facility. This will help employees be prepared for an evaluation at any time, ranging from self-imposed reviews to health inspectors.

In addition, restaurants should research and obtain the appropriate and adequate amount of insurance coverage to protect against potential accidents. Insurance agents can provide tailored plans that cover almost every aspect of a business. The associated costs will be far less than a serious lawsuit, so it is a particularly good investment. While shopping for coverage, be sure to ask an insurance agent about the policies that would best fit and meet the restaurant’s unique needs.

Cooperation

Some incidents that occur may require law enforcement presence. Because of this, specific law enforcement policies should be developed. These should define the methods a manager or team leader will follow when interacting with local authorities or law enforcement, responsibilities of employees involved with the investigation, management of the business’ technology resources, the continuity of the organization’s operations, and documentation and communication of incidents.

By planning for this ahead of time, if an incident occurs, restaurant staff will be equipped with the proper training to take any necessary next steps. Incidents that require law enforcement presence can cause stress and chaos. Supervisors may not want to cooperate, provide evidence, allocate people resources or impede the business’ operations. However, a formalized policy will greatly aide in conducting any reasonable investigation that needs to take place. Building strong, cooperative relationships with local authorities can help reduce stress and tension between the agency and your business when an incident occurs, as well as greatly reduce any potential incidents that police may be aware of from happening in the first place.

Mitigation

When accidents occur, how the injured employee or customer is treated immediately after the incident can be key in mitigating much of the loss upfront. Ignoring, disregarding or having a negative attitude about the situation will only make it worse and can impact the severity of a potential claim. Employees and managers should maintain a positive demeanor and treat the customer with the utmost respect and care regardless of how emotionally charged or tense the situation might be.

Once an incident has been addressed, learn what happened and how it can be prevented in the future. Documenting as many details as possible is important as well. Depending on the jurisdiction, a person could potentially have up to four or five years to file a lawsuit. Therefore, once a restaurant becomes aware of a possible claim, it is important to maintain all records relevant to the situation. In addition to the incident report, the restaurant should gather a copy of current policies and a list of those employees on duty at the time of the accident, complete with their respective contact information.

Accidents do not always equate to liability. Providing claims professionals or attorneys with thorough documentation of an incident will not only support and strengthen the defense, but will also allow the restaurant to experience less disruption to normal business operations if a claim is filed.

While it is impossible to prevent all incidents, it is difficult to predict which ones may result in claims or lawsuits against the restaurant. As with any lawsuit, defending against a negligence claim can be costly and time-consuming. However with these strategies, restaurants can be successful in reducing the risk of liability lawsuits.

Stephen A. Waldman is Waldman Bros’ partner and chief executive officer.