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Loss Exposures in the Restaurant Class of Business 08-2011
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Loss Exposures in the Restaurant Class of Business 08-2011



Allied Insurance is a leader in providing food service industry clients with quality insurance products. This presentation discusses current loss trends in this class of business and what steps can ...

Allied Insurance is a leader in providing food service industry clients with quality insurance products. This presentation discusses current loss trends in this class of business and what steps can be taken to contain the exposure and reduce the most common hazards.



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Loss Exposures in the Restaurant Class of Business 08-2011 Loss Exposures in the Restaurant Class of Business 08-2011 Presentation Transcript

  • Damon P. Schneider Consultant, Loss Control The Retail Food Service Industry : A “walk on the wild side” Work Safe, Protect Revenue & Preserve Profit
    • Introduction.
    • Overview of service.
    • Loss causes for the restaurant class:
      • Food borne illness / foreign object.
      • Poor food storage practices.
      • Poorly controlled liquor liability exposure.
      • Slips / trips / falls.
      • Theft & fire.
    • Continuous improvement works!
    • Questions.
  • Who is this guy?
  • Overview of available services
    • A wide variety of information:
      • Technical bulletins.
      • Select third party resources.
    • On-site consultation.
    • External service partnerships.
    • Training (Store staff and “train-the-trainer”) :
      • Flexible, online safety training classes.
      • “ Take 5s” – combine safety with operational info.
      • Incident documentation / root cause analysis.
  • Overview of available services
    • Program reviews / gap analysis / sample frameworks.
    • Formulate a plan for improvement.
    • “ What’s your temperature?”
      • Will your organizational culture support sustained improvement?
  • Food borne illness / foreign object
  • Systemic failure?
  • Representative of “best practice”?
  • Was proper policy communicated?
  • HACCP for retail food service industry
    • Hazard Analysis and Critical Control Points (HACCP) is a system framework originally developed in late 1950s for NASA (it does not have to be “rocket science” though).
    • Refined by National Advisory Committee on Microbial Criteria in 1997 and tailored to retail food service industry.
    • Worldwide recognition as an accepted analytical tool.
  • HACCP for retail food service industry
    • Analyze your process and identify opportunities.
    • ID “unsafe links in your food processing chain”.
    • Lots of versions / vendors but a good source is available from the FDA .
  • Food storage practices
    • Is there a consistent reading between your interior / exterior temperature gauges?
    • Consistency, vigilance and accountability.
    • Policy on procurement and storage:
      • Stocking with LIFO?
      • Specific policy related to covers on containers and proper staging within cooler / freezer.
      • Only top 3 distributors:
        • Can you trace your supply chain?
  • Helpful resources: myfoodalerts.com
  • Click on “View Incident”
  • What would be a solid foundation?
    • Document and organize your efforts.
    • Seek to transfer risk:
      • Screen for reputation:
        • If you have a problem can they resolve it quickly?
      • Establish relationship through contract:
        • Require certificates of insurance.
        • Hold harmless, D&I provisions, be an AI by endorsement.
  • Customer versus environment
  • Interior compared to exterior walkways
  • A primary loss driver - slip / trips / falls!
  • How big of a deal is it?
    • S/T/Fs are #2 in claims frequency:
      • Interior ~~ 55% of events, 47% of $$$.
      • Exterior~~ 33% of events, 38% of $$$.
    • What are the superficial causes?
      • Water.
      • Ice.
      • Uneven surfaces.
  • Want to play “claimant’s attorney”?
  • Crushed curb with a bonus – rebar!
  • Good condition but odd height diff?
  • Envision the potential for a claim
    • Analyze the total exposure :
      • Car to the door.
      • Door to the wait line.
      • Wait line to the seating area.
      • Seating area to the restroom.
      • Restroom to the salad bar etc.
    • Have a “front of the house” shift check:
      • Document, document, document.
  • Premises liability exposure to claims
    • Proper documentation of the scene:
      • Helpful for the claims investigation.
    • Interior / exterior CCTV:
      • Can be a theft deterrent.
      • Can assist in claims investigation.
      • Be sure it is operational.
      • Off site monitoring?
      • Have a long enough “loop”.
  • Incident documentation and analysis
    • The perspective of claims will come up next.
    • This process can assist with the adequate development of information and help with mitigation efforts.
    • What is being done differently to avoid / prevent the loss?
    • Documented change?
    • How is the review structured?
  • Why should I ask “why”?
    • Comprehensive review is to find the cause and not to assign blame.
    • Fits with continuous improvement mindset.
    • “ Lessons learned” and steps to mitigate to build a foundation of “reasonable care”:
      • What’s the problem?
      • Why did it happen?
      • What should be done?
  • Liquor liability control (aka “Responsible Beverage Service”)
    • Management, bar tenders and servers should have TIPS / TAMS / Serv Safe training:
      • In person from a certified trainer.
      • Available online.
      • Can be provided by some bev distributors.
    • Documentation is part of your program.
    • Policy in place to handle intox patrons?
      • Consider the following but have a review conducted by counsel.
  • Training & documentation – Online!
  • Tips to contain your exposure
    • Plan for the extreme.
    • Monitor behavior upon entry & order: (speech, coloration, disposition, odor)
    • Offer to call for transport.
    • Maintain your records:
      • Save receipts.
      • Know the type / # of drinks being consumed.
      • Get a statement from the server.
  • Have an intoxicated patron?
    • Identify a back-up co-worker to support you.
    • Speak to the customer privately and directly.
    • Be firm. Do not argue, bargain or back down.
    • Use closed statements that do not allow negotiation.
    • Show concern for the safety of the guest.
    • Ask others to help you including friends of the customer.
    • As a licensed premise, remove all bottles or glasses of liquor from the customer at the table or counter.
    • If the customer becomes disruptive or does not listen, call a manager or the police if necessary.
    • SOURCE: http://www.servingitright.com/beverage_service_learn_7.html
  • Property exposure to loss
    • Fire
    • Theft
    • Equipment breakdown
    • Power surge
    • Electrical malfunction
    • Objects striking structure
    • Weather
  • Congealed grease + ignition source=?!
  • Appliances must be properly protected
  • Good housekeeping is good practice
  • Property exposure to loss
    • Conditions that can increase the exposure to fire in restaurants:
      • Poor housekeeping.
      • Over-reliance on temporary wiring.
      • Roll the appliances back to the proper location under the system.
      • Seek our input on new construction:
        • Poor layout can affect safety and protection.
  • Property exposure to loss
    • Proper cleaning of appliances, duct work and filters.
    • Adequate service frequency for fire extinguishers & fire suppression system.
    • Explain to employees the process if there is a fire.
    • Have a central station monitored alarm with connection to the fire suppression system.
  • Property exposure to loss
    • Theft (internal & external):
      • Criminal background screen / WPV.
      • Camera system with record function.
      • Audit – inventory & financials.
      • Culture of accountability (HR process, audit of records, terminate, prosecute if needed).
  • So how can I prepare my next steps?
  • Continuous Improvement Cycle for Retail Food Service Mgmt Advocacy Safety Program Monitoring Identified New Hazards Safety Communications Training Employee Feedback Mgmt of Change Plan Accountable Lessons Learned Assess Safety Culture Gap Analyses Effective Risk Mitigation? ORGANIZATIONAL SAFETY CULTURE ORGANIZATIONAL SAFETY CULTURE Safety *Identify hazards. *Analyze, assess, accept and mitigate risk. *Monitoring plans. Process Assurance
    • *Monitor mitigations through:
      • Evaluative Audits
      • Trends Analyses
      • Data Tracking
  • Ask yourself this …
    • Personal Action Risk Assessment :
      • Why am I doing this?
      • What could go wrong?
      • How likely is it to happen?
      • How could it affect me or others?
      • What should I do about it?
  • Some parting thoughts
    • Management commitment to best practices: – “Walk the walk” & “Lead the way”.
    • Safety, operational finance controls, security:
      • All are important for it can be difficult to split exposures into coverage lines.
      • Reputation risk can be huge.
    • Seek our assistance:
      • We are happy to help!
    • Better customer service:
      • Consistency of the experience.
  • Some parting thoughts
    • Train and empower your front line employees:
      • Give them the skills and resources to do the safety part of the job.
      • Rely on longer term safe emps as role models.
    • Get input from your line employees:
      • Increase potential for compliance through better engagement.
    • Adopt a continuous improvement mindset.
  • Thank you for your attention
    • Damon P. Schneider
    • Consultant, Loss Control
    • Allied Insurance
    • 404-805-8478
    • [email_address]