MANAGEMENT

Insurance for F&B establishments provides vital protection against potential external and internal risks. It also offers reassurance for guests and employees who engage with the brand. Manal Syriani, takes a closer look at what's on the market.

The best insurances for the F&B industry

While some types of insurance are considered mandatory by law, businesses need to study their individual needs to identify areas of vulnerability specific to their operations to seek the best coverage.

Criteria to take into account when selecting insurance:

1. Environment: the political and economic context. In a country that is politically unstable, the risk of uprising, riots or other similar movements expressed publicly could result in damage to your property. The level of risk greatly depends on the location of your business. Similarly, the economic system adopted by the government and the economic situation in general is relevant in terms of potential fraud, theft and unforeseen losses.

2. Geography: the local climate, environment, extreme weather conditions, etc. Such natural phenomena may lead to property damage, especially as global climate change is a real threat. The level of risk associated could vary drastically, depending on location, as certain regions, are becoming more unpredictable.

3. Business complexity: the day-to-day operations and the type of service/products provided by the business. Depending on the complexity of the kitchen operations, for instance, the variety of services provided (catering, delivery, eat in, kids’ playground, valet parking service, etc.) and the manpower required for each activity, liability and workers’ insurance should be tailored accordingly.

4. Medical risk: injuries that could be suffered by employees while performing their duties.

5. Business volume: the number of operations for each business and different trademarks/concepts listed under the company portfolio. Diversification might increase the impact of third-party liability depending on the legal structure of the company and subsidiaries available.

Basic insurances typically required by a restaurant include:

1. Property: covering the physical building and assets involved in the operation of the business against internal or external threats.

2. Liability: protecting against claims from third parties associated with your business, whether related to the products you sell or to the events that could occur on your premises, both of which may cause harm to guests or employees.

3. Business interruption: securing compensation for losses on income (opportunity costs) resulting from closing the business temporarily due to unforeseen events.

4. Workers’ compensation: providing medical coverage for employees in case of work-related injuries or due to unforeseen accidents that may occur on site. This insurance also includes compensation in the event of permanent injury to the employee.

5. Theft and related insurance: compensating for monetary losses due to theft, fraud or similar incidents. Ideally, such insurance should cover external risks and those posed internally.

It is important to note that assessing the insurance needs of an F&B business is an ongoing process that should take into consideration changes and developments in the local community as well as the evolution of international business and new health regulations.