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Do I Need Pub & Restaurant Insurance? Do Pubs and Restaurants Need...
Employers Liability Insurance?If you employ staff on a full-time, part-time, casual, temporary, work-experience or voluntary basis for your pub, restaurant, cafe or takeaway then you need Employers Liability Insurance. Employee Accidents, Injuries & DiseasesPreventing assaults, accidents, injuries and diseases happening in the first place will save you money with fewer Employers Liability insurance claims against the business. Risks assessments aren't difficult to carry out, but they are vital to protect your business from legal action - as well as complying with the law. The steps needed to protect staff from contracting, say, dermatitis are simple to put into place, so there's no excuse if you find yourself being sued by an employee. Insurers will treat you more favourably and even reduce premiums if you can show you have vigorous systems in place for preventing injury and sickness among staff.
This is compulsory under The Employers Liability (Compulsory Insurance) Act 1969 if you hire anyone outside your immediate family. It protects you against compensation claims from employees who get sick, have an accident or die because of their employment. The premium will rise with the number of staff employed. If you're charged under The Employers' Liability (Compulsory Insurance) Act 1969 you can be fined up to £2,500 a day. The minimum cover for employers' liability insurance is £5 million, but most insurers cover up to £10 million. The cost of employer liability insurance depends on the type of business you're in, and payroll size. You can cut premiums by undertaking regular risk assessments, following a clear health and safety policy and having equipment serviced regularly. To Cut Employers Liability Insurance Claims:
More about Employers liability insurance >> Public Liability Insurance?If the general public injure themselves or fall ill as a result of your negligence, or property is damaged because of your pub, restaurant, cafe or takeaway business operations, you could be sued for millions.
Public Liability Insurance covers these types of claim and usually any legal expenses involved. More about Public liability insurance >> Product Liability insurance?The food or drink that you serve in your pub, restaurant, cafe or takeaway could cause illness or even death. Either could be contaminated with a deadly bug or cause a fatal reaction in a customer.  A claim might arise is if you cause food poisoning as a result of using ingredients that are past their use by date. If you run an inn with guest rooms most likely you will supply goods for your visitors' comfort, eg hairdryer, tea and coffee-making facilities, soaps, shampoos, etc. You may supply guest soap with your own label, so it appears that the products are produced by you. Larger establishments will offer play facilities for families with young children (eg Bouncy Castle). Many catering businesses supply sauces and dips featuring their own logo. Even although you don't actually manufacture any of the products yourself, you could be sued for damage or injury caused by defects in their design or manufacture. Under the Consumer Protection Act 1987, it's a criminal offence to supply defective consumer goods. You could be held legally responsible and be required to financially compensate your customer in settlement. Products liability insurance can cover your legal liability to pay damages as a result of defective goods and services and also pay for expensive product recall notices. The standard level of cover is £2 million, but you can increase this. More on Product liability insurance >> Buildings Insurance?If you own the premises and disaster strikes, you need buildings insurance to cover the full cost of rebuilding your pub, restaurant, cafe or takeaway. This should include the cost of professional fees (architect, surveyor, etc) as well as demolition and site clearance. The premium is based on the value of the property. Generally, standard cover protects against fire, lightning and explosion of domestic gas and boilers but a more comprehensive option is "all risks" to include accidental damage or loss not specifically excluded in a standard policy. So, depending on your attitude to risk and your location, you may want to cover your business property for explosion, riot, malicious damage, storm, flood, impact by aircraft, road and rail vehicles, escape of water from tanks or pipes and sprinkler leakage. Tenanted and leased pub premises are owned by the company, so the upkeep of the property is their responsibility. You should check their buildings insurance policy to ensure it's adequate. If you live on the premises, you can take out household contents insurance to cover personal items. The cost of the insurance depends on several factors - the age and type of building, proximity to emergency services (eg ambulance/fire brigade), your attitude to risk management and any previous claims history. Contents Insurance?Business contents insurance covers your trade contents and stock. What if your pub, restaurant, cafe or takeaway was flooded, vandalised or caught fire? You could be left with very little unless you have adequate contents insurance. If you simply renew your policy year on year without changing the level of cover, it's unlikely to reflect your current needs, especially if you've invested in more and better quality furniture and fittings, say, or hand-held computerised order takers. And how likely is it that the level and value of your stock has remained exactly the same ...? You should insure valuable contents such as stock, furniture, fixtures and fittings and equipment separately from the building to give extra cover. Poor storage can often invalidate a policy - if stock is stored in a cellar, say, where it's liable to damp. Most insurers insist stock should be placed on racks at least 30cm above floor level. Insure your stock for its cost price with no mark-up. Make sure the sum insured is adequate, ie, the full replacement cost. Don't underinsure stock - it's a false economy because you'll only get back a proportion of its real value. Similarly, don't over insure - you'll pay a higher premium than you need to. It's wise to increase the sum insured - by 25% or even 50% - to cover higher levels of stock held during busy trading times, eg Christmas or Easter. Check that there's also cover for property in transit and at exhibitions or outdoor catering events. You can insure plant or business equipment on a new for old or indemnity basis, or depreciation (ie wear and tear is taken into account when settling claims). Top TipAt least 45 days prior to your insurance renewal date - mark the date in your diary - check the market for a better deal. Don't simply accept the renewal quote from your existing provider. Business Interruption Insurance? Incredibly most businesses think this type of insurance is unnecessary and have no contingency plans to deal with a major emergency, such as fire or flood. Yet many businesses will go bankrupt after either one of these catastrophes. Standard Business Interruption insurance - also known as Loss of Profits or Consequential Loss - covers the risk of fire, lightning, explosion and hazards such as storm, flood, malicious damage andtheft. You can claim if any of these insured risks occur at your cafe, bistro, restaurant, pub, nightclub, mobile catering unit, takeaway business or wine bar and hit your turnover. Top TipDon't confuse Business Interruption insurance with Buildings and Contents cover. Sometimes called Property insurance, Buildings and Contents cover will meet the cost of building repairs or replacing stolen or damaged equipment and stock. It won't cover you for loss of business income or pay any of the outgoings needed to sort the problem. If the damage is serious it will take time to get the business back to normal. Without Business Interruption cover, your business could face real financial problems. But what if one of these risks were to affect one of your main suppliers' premises - your wine or organic food supplier, say, or your water, gas, electricity, telecoms provider? The effect on your business in high season could be catastrophic. You can extend cover to include this. Premises in rural areas might want cover business interruption in the event of an outbreak of a notifiable disease - avian flu, say - on a nearby farm which could seriously harm bookings. Owners of food and drinks outlets should also think about covering loss of income due to enforced closure because of substandard sanitation, food poisoning or pest infestation. You can even insure your business against the harmful effects of suicide or murder on the premises. Some insurers will also cover loss of business income as a result of:
Business interruption cover pays things like rent and wages for employees that you need to keep and redundancy payments to staff you have to let go. It covers loss of income and meets extra outlays such as hiring temporary premises, accountants' fees and clean-up costs. You can choose between a one- or three-year term policy, but it's harder to prove loss of earnings over a 1-year period. The premium's based on an estimate of your gross annual profit. The duration of the cover (maximum indemnity period in insurance speak) is usually a year or more and will keep you solvent until you can trade at the same level as before. Business interruption cover makes sense - it's probably one of the most valuable types of insurance to buy. Loss of Liquor Licence Insurance?If you lose your licence through no fault of your own, this type of insurance can cover you against loss of profits and depreciation in the value of the premises. This is type of cover is popular among publicans and proprietors of licensed premises generally. Few pubs, bistros, wine bars or restaurants could survive a loss of liquor licence. Money Insurance? Thieves often see catering businesses such as pubs, restaurants, cafes, takeaways, sandwich shops and mobile food outlets as soft targets for robberies. Crooks know you keep cash takinds on the premises - most customers pay by cash to buy food - and you could be robbed of your takings. Cover may include what insurers describe as 'non-negotiable' money - crossed cheques, bankers drafts, postal orders etc, unused units in franking machines and credit company sales vouchers. You might want to ensure business money is covered away from the business ie in transit, when taking money to and from the bank, and that there's cover for injury to you or your employees in the event of assault or attempted assault. Money can easily be misappropriated by staff so you need to insure it against theft by an employee. This is sometimes called Fidelity Guarantee or Employee Dishonesty, and protects your business if employees steal money or stock. Books Debt insurance?This protects pubs, restaurants, cafes, takeaways and mobile catering outlets for the loss of money arising from theft of or accidental damage to books of account. Sometimes referred to as "Loss of accounts receivable," it'll cover the cost of working out how much customers owe and the amount of any unpaid debts that can't be tracked down because of loss or damage to your financial accounts. Trade Credit Insurance?If one of your biggest customers went into liquidation or delayed paying bills would your cash flow dry up? Trade Credit insurance covers pubs, restaurants, cafes, takeaways and mobile catering outlets against the risk of bad debts and gives you working capital to reduce the blow. Many insurers provide support services in the shape of credit assessment/debt collection management. Engineering Insurance?Sudden mechanical or electrical breakdown of machinery, such as lifts, computer, kitchen or micro brewery equipment could stop you trading. Engineering cover will help meet the costs of repair or replacement. As always, check the small print. Programming or operator errors, or virus attacks on your computer could be excluded. Equipment such as lifts and lifting machinery, boilers, deep fat fryers, etc., must be regularly maintained and inspected or the policy will be void. Glass and Sign Insurance?You will need this type of insurance if you anticiapet a potential need to meet the cost of replacing expensive glass or signage damaged because of accidental or malicious acts. It's not always covered under standard premises insurance policies. Neon signs are often excluded. Check the small print. Legal Expenses Insurance?Tax investigation, VAT and employment disputes are, unfortunately, on the increase for pubs, restaurants, cafes, takeaways and mobile catering units. Top Tips
You could find yourself being taken to court over an employment issue, eg, racial or sexual discrimination or a claim for unfair dismissal. Or you may want to appeal against a loss of liquor license, take out court action to recover bad debts, or resolve a dispute with a customer. But taking out or defending a legal action is expensive and can place huge financial burden on a business. Legal Expenses insurance, often called Commercial Legal Protection, will pay legal costs such as solicitors' fees and expenses, the cost of barristers, court costs and opponent's costs if the judgement goes against you in civil cases. The policy cover should also cover the cost of employing accountants and lawyers if your business comes under investigation for tax or VAT. Check the cover limit per claim and the maximum limit allowed for employment compensation awards - particularly important if you employ a lot of staff. As always, check the small print. Goods in Transit insurance?Whether you run a pub, restaurant, cafe, takeaway or mobile catering unit, you need to cover goods against loss or damage while in your vehicle or when being sent via carrier. The insured sum may be limited for each vehicle or consignment. Check the limit is adequate. Employee Theft insurance?Unfortunately, theft and fraud is a fact of modern life. It's believed to be responsible for up to a third of all business collapses, with smaller businesses most likely to go under as they often have poor financial controls. Often, it's just one person who is able to sign the cheques. In the accommodation and food and drinks sector, there's no shortage of temptation for staff who have easy access to valuable stock and cash takings. If you run an inn with guest rooms, staff may be tempted to steal guests' property. When guests pay by cash to settle bills this money can easily be misappropriated. Valuables can also be stolen and the company credit card used for personal gain. Often employing seasonal/temporary staff means there's higher risk of theft. Sometimes ETI is called Fidelity Guarantee or Employee Dishonesty, this isn't always covered under Loss of Money, and will protect you against loss of insured property as a result of theft or fraud by your employees. Most businesses buy this type of cover. Key Person Insurance?If your restaurant thrives because of the success of an individual - a top chef, for instance - and that person falls ill, dies or is disabled, the effect on your trade could be disastrous. Key Person insurance helps protects your business against a resulting loss of income. Food Allergies - What you should knowBetween 10 - 15 people die each year in the UK because of an allergic reaction to food, with most deaths caused by food eaten from a restaurant or takeaway. Even the smallest amount of an allergenic food, eg, peanuts, can cause a severe reaction called anaphylaxis, also known as anaphylactic shock. The whole body is affected, often within seconds. Some customers need to avoid certain foods because of food intolerance. Around 1 in 100 people suffer from coeliac disease. They must avoid gluten in their diet as it can cause severe inflammation in the lining of the gut. Gluten, a protein present in wheat, rye and barley, can be found in bread, pasta, cakes, biscuits, and beer, and in a range of less obvious products, including mayonnaise, gravy, sausages and soy sauce. Gluten intolerance is not as deadly as an allergy, but a severe reaction - vomiting and diarrhoea - can occur in just two hours and last for days. So treat food intolerance with the same caution as food allergy. Food and the LawCurrent laws provide comprehensive protection for anyone suffering an allergic reaction if they have informed the outlet of their allergy. Under the Food Safety Act 1990, the General Food Law Regulations and the Consumer Protection Act, the food customers eat must be safe and of the quality they have every right to expect. If someone eats a food they are allergic to, they could die and you could be held responsible. Danger FoodsIn outlets where food and drinks are served - pubs, restaurants, cafes, tea rooms, etc - staff must be aware of the ingredients that can cause problems. This isn't always easy as these can appear under many different names. The danger foods are:
Your responsibilitiesIf someone tells you they have a food allergy or intolerance, it's your responsibility to ensure they get all the information they need about the food they're thinking of ordering. If you serve an unsafe ingredient then you are legally liable and open to prosecution. Good hygiene should ensure that they're not included by mistake but contamination can occur if worktops and equipment aren't cleaned properly.
Food LabellingFor pre-packaged foods (including alcoholic drinks), the law demands that allergenic ingredients must be clearly labelled. Food outlets such as delis, sandwich shops and takeaways that sell pre-packed foods (sandwiches, wraps, baguettes, etc) must make sure that allergenic foods/ingredients are clearly and accurately labelled. If the information isn't accurate, you could be breaking the law. For pubs, restaurants and cafes that serve meals (ie not pre-packaged), at present there's no legal requirement to provide written information on the allergen content of the food. But if customers ask for information on ingredients, any information you give must be accurate. If not, you could be breaking the law. The Food Standards Agency website provides guidance and information for those involved in the food business. You'll find helpful information on providing information that allergic customers need, as well as advice and guidance on best practice. You can download a food allergies leaflet aimed at small and micro businesses and handy training poster from their website. Website: http://www.food.gov.uk/ Food Case Histories
Security MeasuresFlood PreventionWith flooding becoming more common in the UK, it makes sense to think ahead if your business is based in a high risk area to minimise future damage and disruption. The Association of British Insurers and The National Flood Forum have produced a handy factsheet and guide to improving flood protection which you can download from their website. The Flood Protection Association carries out risk assessments and offer solutions to protect your premises. A good insurance policy will help recoup some of the cost of burglary, robbery or employee theft, but it makes sense to stop these happening in the first place. Like your business plan, security should be reviewed at least once a year. Weigh up the potential risks to you, staff and customers as well as stock/buildings/catering unit. Here are some basic security measures to implement if you haven't done so already. They're especially crucial if you're located in a high-crime area or there's a history of robbery, assaults or employee theft.
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