Restaurant proprietors must take precautions to ensure their safety.

Every restaurant owner or franchisee needs to make sure their insurance is up to date.

The focus of the media right now is on eateries closing and reopening as the COVID-19 outbreak resurfaces. We’ve already seen what this turbulence can do to a restaurant’s bottom line. With so many unknowns, one thing is certain: restaurant owners, whether independent or franchised, will need to be adaptable and communicate well with their employees in order to keep everyone as safe as possible.

Occupational Safety and Health Administration (OSHA) health and safety checks connected to the pandemic, as well as municipal and state standards, should be the top focus for every restaurant owner right now. It’s also crucial to be aware of your public liability insurance policy in order to safeguard your company, personal finances, and employees. Employee claims for physical injuries and diseases are covered by workers’ compensation insurance.

Employment Practices Liability Insurance (EPLI)

EPLI is a type of liability insurance that protects against improper conduct committed during the hiring process. Discrimination, wrongful termination, sexual harassment, and retaliation are the most common sorts of claims covered by such policies. For these types of accusations and potential litigation, restaurant operators should invest in EPLI. Along with insurance, make certain you:

  • You protect against prejudice by implementing effective hiring and screening systems.
  • Post corporate rules throughout the workplace and include them in employee handbooks so everyone is aware of them.
  • Train employees on what to do if they are the victim of sexual harassment or discrimination by a supervisor… ensuring that supervisors are aware of the company’s position on what behaviours are and are not acceptable.
  • Keep track of everything that happens, as well as the efforts your company is taking to prevent and resolve employee conflicts.
  • Keep track of how your organisation is following COVID-19 safety guidelines and maybe go the extra mile for client safety.

Make sure your insurance coverage suits your footprint and has been verified by your attorney if your restaurant will have a change in employee counts during and after the pandemic. In addition, establish a tight working relationship with a credible HR firm; many EPLI carriers include resources in this area as part of the insurance. If you regularly acquire E&O and Directors and Officers Liability (D&O) insurance, be prepared to answer a slew of additional underwriting questions in the future. Because of the claims, rates are likely to rise, and there may be fewer providers for these types of important business insurance.

The Franchise Disclosure Document (FDD), which is specific to franchises, requires franchisees to obtain insurance coverage, although not all franchisees are up to date after the COVID-19 business disruptions. If there isn’t a person, department, or service in place to oversee compliance and help safeguard the brand, franchisors may be particularly vulnerable. Make sure you’re working with an insurance agent that understands the ins and outs of the restaurant industry.

Here’s a basic rundown of EPLI-style claims:

  • Discrimination based on gender. Men claimed they were denied more lucrative server positions because of their gender, and a nationwide restaurant company paid to settle a gender discrimination complaint.
  • Retaliation. When a server arrived late to work, she was issued a “last chance” warning. The angry employee filed a complaint with the health authorities about allegedly unclean food-handling practices right away. The server claims that she was fired in retribution for filing the complaint after she was fired for being late again.
  • Harassment of women. A restaurant chain was compelled to pay a sexual harassment claim brought by numerous adolescent employees who claimed the manager was inappropriately behaving.
  • The Fair Labor Standards Act (FLSA) is a federal law. Several salaried assistant managers at a mid-sized restaurant chain filed a class-action lawsuit alleging that it is required to perform “non-managerial tasks” on occasion, such as busing tables, running the cash register, or serving customers, qualified them as hourly employees and thus entitled them to overtime pay. The former employees were awarded class-action status by the court, which cost the company more than $1.3 million to resolve.
  • A client threatened to bring a class action lawsuit stating that a restaurant was not in compliance with the disability act. Knowing that defence costs for a restaurant can approach six figures, the client and their attorney settled on a “deal” of $15,000 to $20,000.

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These are not exhaustive instances; rather, they provide a snapshot of some of the situations that made news prior to COVID. COVID-19 claims, notably recruiting and firing activity for any eatery that may come under scrutiny for obeying safety requirements, are also generating news. To avoid mistakes that could damage your restaurant, especially during a pandemic, every restaurant owner or franchisee should update their insurance coverage and take the time to fully evaluate policy coverage.