Australia is home to more than 30,000 restaurants, 28,000 cafes and coffee shops and 9000 pubs, bars and nightclubs.
If yours is one of them, you’re likely to be already familiar with some of the challenges that are part and parcel of running a hospitality business. It also pays to be prepared if you plan to open your own establishment.
There’s a lot that can go wrong and without the right insurance cover in place, it’s easy to end up out of pocket or, in a worst-case scenario, out of business.
These are some of the most common exposures hospitality business owners need to protect themselves against.
Public liability
If someone slips on your dining room floor, contracts food poisoning after eating in your establishment or suffers any other form of injury while on your premises, they may decide to seek compensation.
Public liability insurance can help cover the cost of personal injury and property damage claims made by individuals other than your employees. The nature of your business will determine the level of cover you’re likely to need.
“The risk of fights, for example, is much higher when you’re running a club versus a café or restaurant because people aren’t necessarily going to be drinking as much alcohol in the latter,” Steadfast Broker Technical Manager, Michael White explains.
“Business interruption insurance can help tide you over until you are cooking with gas again”
Property and machinery damage
If your business does any form of cooking, the risk of kitchen fire can be present. Property insurance can help you to repair the damage should a blaze break out, while machinery insurance can be used to replace any equipment that’s damaged or destroyed.
Sometimes the rectification process can be a protracted one if equipment or parts aren’t readily available or need to be imported from overseas.
“Some special orders can take up to six months,” White says.
Business interruption
That’s when business interruption insurance can come into play. Designed to help your business keep running after a catastrophic event, it can help to cover ongoing costs while you recover and rebuild.
“If you’re unable to cook or offer your full menu, for example, your takings may be significantly reduced,” White explains. “Business interruption insurance can help tide you over until you’re ‘cooking with gas’ again.”
Hospitality environments can be fast-paced and hazardous, which means the risk of workers injuring themselves on the job – think burns, cuts and slips and trips – is high. That’s why it pays to implement stringent workplace health and safety procedures and to ensure all employees are adequately trained.
They’re can be entitled to seek compensation for any physical or mental injuries incurred in the course of their employment, so having appropriate workers compensation cover can help you meet the cost, should that occur.
Theft and burglary
Unfortunately, break-ins can be a common occurrence for businesses across all sectors, including hospitality. Theft and burglary insurance can cover loss or damage to your stock and contents resulting from forced entry.
Cover to keep your hospitality business humming
If you haven’t reviewed your business insurance for a while, now is a great time to do so. To discuss all of your hospitality cover needs, contact your broker today.
Important notice – Steadfast Group Limited ABN 98 073 659 677
This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. These insurances are issued by various insurers and can differ.
Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.
