How does the food I serve relate to my insurance premiums?
You run your cafe, restaurant or gelato cart with passion and pride in your food and beverages. But did you know that the food you serve impacts the cost of your insurance premiums? Why? It all comes down to risk and which food and drink is considered most risky to prepare and serve by your insurer.
High risk foods and drinks
You may have experienced food poisoning, or burns from a hot drink, either as the proprietor or customer in a hospitality business. For both parties it is beneficial that the business’s insurance covers these risks. A public and product liability insurance policy is used to cover third party injury or property damage such as this.
If your hospitality business is licensed there are other risks that arise, such as dealing with intoxicated patrons and being careful to comply with regulations around the responsible service of alcohol.
Beyond these types of risks that are directly tied to the food and drink you choose to serve, how you prepare it and where you serve it are significant factors in determining your insurance premiums.
What sort of equipment are you using to prepare your food?
If the food you are serving is prepared using expensive equipment you may choose to insure that equipment for breakdown or damage. If you have a cool room, deep fryer or complex coffee machine that you want to insure alongside your simpler equipment such as kitchen appliances, then you will be paying more for your property insurance and may also consider machinery breakdown insurance to cover the cost of fixing your equipment in case of breakdown.
Some equipment is also more risky to your employees as well as to your premises than others. Cooking using woks or deep fryers may increase your insurance premiums due to the high risk of kitchen fires and resulting injuries and property damage. Insurance policies that may be affected include workers compensation, building insurance and contents insurance.
What about where you serve your food?
Statistics show that hospitality insurance for a restaurant is more expensive than insurance for a cafe, which is more expensive than insurance for a catering company. So if you want to serve sit down, restaurant style food, with table service you will be paying more for your insurance than if you want to serve food in a cafe environment. However, if your passion is catering, and bringing your food to someone else’s location, then you’ll be paying the least for your insurance.
Generally, the more interaction your staff have with your customers, the more chance there is that they will make an error that results in an injury to a customer. In fact, hospitality businesses with fewer staff incur lower public liability premiums than businesses with more staff. Businesses with a higher ratio of take away food to eat-in food may also be considered lower risk by insurers due to this decreased interaction.
The fit-out of your premises will also impact your building insurance and contents insurance premiums. This may be due to expensive equipment, the need to insure glass in your take-away glass cabinetry, or high end furniture and artworks in your exclusive eatery.
If you are running a cafe, restaurant or other hospitality business Urban Insurance can help to ensure that adequate hospitality insurance is in place to ensure your hospitality business is covered for all of its risks.