Protecting Your Business: Restaurant & Bar Premises Liability

December 12, 2017

By Colorado Restaurant Insurance —

Winter Months are Approaching. How To Prevent Slips, Trips & Falls

It’s true! More than 3 million food service employees and over 1 million guests are injured annually as a result of restaurant slips and falls. Food, water, ice, snow, dirt, sand, and more, can prove to be recipes for disaster; not only for employees, but also for customers and vendors, alike. Many of these injuries are serious, including broken bones, head injuries, twisted ankles and knees, muscle strains and cuts. According to the National Floor Safety Institute, the hospitality industry spends over $2 billion on such injuries each year and these injuries are increasing at a rate of about 10% annually.

Not only can the potential injury from a slip, trip or fall result in pain and suffering for the injured customer, these accidents reflect adversely on your business. In addition, they also impact your insurance claims experience and insurability as a business owner. Your employees should have the knowledge and authority to take corrective action when unsafe conditions or unsafe acts are observed. The safety and well-being of your customers and employees should be front and center within your day-to-day operations. While not every accident is preventable, restaurants and bars should keep safety a top-priority by creating and maintaining a safe environment for their employees and guests by implementing customary industry standards and procedures.

 

Consider implementing recommended safe work practices within your restaurant, including:

  • Provide non-slip matting in areas that tend to be wet.
  • Alert workers/customers to step-ups and step-downs by using hazard tape or other warning signs.
  • Provide adequate lighting, especially in serving and preparation areas.
  • Use portable signage warning of “WET SURFACES” to alert customers of the slippery conditions.
  • Frequently check all critical flooring; aisles, waiting areas & restrooms during business hours to make sure they are dry, clean and free of hazards.
  • All staircases should have proper treads, a sturdy handrails on each side of the stairs and adequate lighting on every flight of stairs
  • Provide mirrors for blind corners.
  • Keep passageways and walkways free of clutter and crowding.

 

Do your safety part outside your restaurant, including:

  • Parking lots and sidewalks should be clean and level.
  • Provide adequate lighting for nighttime use.
  • Redirect any downspouts that empty water onto sidewalks and parking lots.
  • Remove snow and ice as soon as possible after each storm.
  • Have sand and ice melting chemicals available to spread on ice that might form as melting and re-freezing occur.
  • Exterior stairs should be well lit, handrails on each side, and snow and ice removal is extremely important.

Employers have a primary responsibility for protecting the safety and health of their workers and customers. However, employees are responsible for following the Safe Work Practices of their employers. In summary, successful control of the hazards associated with these exposures will result in a safer restaurant environment and reduce injury frequency and severity.

 

Consult Colorado Restaurant Insurance at coinsurance@corestaurant.org or call 303-880-2806 to learn more about how to manage your restaurant risks.

Mistakes Restaurant Owners Make Related to Cyber Liability

October 25, 2017

By Jason VanGotten, Colorado Restaurant Insurance

Even with all the recent news headlines related to data breaches and cyber attacks, the likes of which have never been seen before, cyber liability is a relatively new area of risk that restaurant owners now face. As customer data continues to be obtained and stored by restaurants, the risk of a data breach inside or outside the restaurant continues to increase year over year. Malicious hackers typically steal credit card data from restaurants that accept cards by hacking into point-of-sale systems remotely and seeding those systems with malicious software that can copy account data stored on a card’s magnetic strip. Thieves then use that data to clone the cards and use the counterfeits to purchase high-priced merchandise, or put them up for sale in a so-called theft bazaar such as Joker’s Stash prior to the card-issuing banks cancelling them.

 

In the midst of this are some very dangerous misconceptions held by restaurant owners. These misconceptions keep them from taking necessary steps to better understand their cyber risk and coverage related to such vulnerabilities.

 

Consider these 4 Common Mistakes a Restaurant Owner Can Make in this area of risk management.

 

My general liability insurance protects me in the event of a data breach or cyberattack. Most restaurant owners purchase a general liability or businessowners policy believing their insurance agent has placed this as an optional coverage on the policy. But for now that is very rare. Even if it that were the case, the policy will only provide defense coverage for the insured, typically up to $25,000 to $50,000. Your general liability coverage lacks the breadth needed to properly protect the restaurant owner from the cyber liability losses. A stand-alone cyber policy provides the broadest coverage a restaurant owner needs for third party costs, data breach response, PCI fines levied from card services, notification resources, legal fee’s and forensic costs. Not investigating this closely is akin to leaving your restaurant door open when you leave at night, not a great strategy for ensuring the safety of your restaurant.

 

A stand-alone cyber policy will be unaffordable. Depending on your restaurant size and gross revenues, a typical restaurant owner can expect to pay between $900 to $3,000 annually for a stand-alone cyber policy. However, the risks of loss may be too great to ignore this protection, in particular your brand image after a data breach or cyberattack.

 

My IT company and firewalls installed will protect me. These entities have a service level agreement (SLA) with your restaurant. When was the last time you reveiwed your SLA? Many times these agreements do not protect you, the restaurant owner, instead it protects them from any involvment related to a data breach or cyberattack. Make sure you check your SLA and have a conversation with your IT company to see what they will do for you in the event of a data breach or cyberattack. Many times your employees pose huge risks to the safety of your cyber data, from opening suspicous emails, downloading malware or even losing smartphones with connections or memorized passwords. Remember that a data breach can also occur with employee records that are not well protected or disposed of properly.

 

My merchant services are protection enough. Again, there is a service level agreement between you and your merchant servicing company. While this may give a restaurant owner hope, chances are that you will ultimately be responsible for protecting your customer’s data as it passes through your IT systems. Therefore, you should consider the costs to your restaurant if your merchant services vendor does not agree, or points the finger in your direction for who is responsible.

 

A cyber criminal can strike with little to no warning, leaving the restaurant owner with tremendous clean up cost; from data recovery to rebuilding your restaurant’s brand reputation. An owner or manager can only do so much. The people that deal in the day-to-day operations of the restaurant also need to be aware of what to do and why to do it. As a restaurant owner you owe it to yourself and your employees to investigate this protection and risk before you decide not to worry about it. A restaurant owner must be deliberate and careful in purchasing cyber coverage. Specific risks must be understood and the appropriate coverage identified.

For more information pertaining to cyber liability coverage, please contact Jason VanGotten at jvangotten@corestaurant.org

Cyber Liability – Are You Covered?

October 3, 2017

By Jason VanGotten, Colorado Restaurant Insurance —

 

Originally, I began writing about this back in 2015 when cyber-attacks were starting to become relevant in our world. Now, the world of cyber criminals have fully evolved and results show that 2017 recorded the highest number of cyber-attacks globally. This is evident in the vast amount of attention recently given to cyber-attacks with companies such as Equifax, Sonic, Chipotle, Time Warner, Anthem, Target, and more. Cyber liability is something all businesses need to consider, even the hospitality industry. Considering that your business likely has a website, uses social media, uses internet connected computers, has a point-of-sale system and most importantly an electronic payment processing system, you probably conduct more cyber business than you may be aware of. Yet, when was the last time you discussed this risk with your insurance agent? Cyber criminals have exploited all sizes of business and cyber liability can no longer be ignored.

 

The discussion around cyber exposure/risk is extensive and complicated. Exposures include computer fraud, hacking, ransomware, phishing, malware, adware, lost equipment and even simple mistakes. Some of the most common occurrences within a small business begin with:

 

  1. Online hacking and data theft of confidential information such as credit card numbers, personal identifiable information, social security numbers, date of birth, etc.;
  2. Accidental loss or sharing of proprietary information; and
  3. The inside threat, known as phishing, of employees stealing sensitive account information from employers and customers.

 

There are a lot of misconceptions regarding both your exposure and how to protect yourself. Unfortunately, many times the realization of insurance shortfall comes after something drastic happens. The common mistakes an operator can make regarding cyber liability are:

 

  1. Assuming, because you are a small business you are not a target;
  2. Assuming your general liability policy affords the proper coverage needed to protect against a cyber claim;
  3. Assuming cyber liability coverage is too expensive; and
  4. Assuming your point-of-sale, merchant service, and server (IT) companies afford you coverage/protection when a cyber-attack occurs.

 

The most common cyber liability a restaurant faces is a data breach. A data breach happens when an unauthorized individual gains access to electronic information (typically names, credit or debit card numbers and/or bank account numbers). This information is highly desirable to a criminal looking to sell their stolen information on the “Black Market” or to utilize the information themselves. The costs associated with resolving a potential data breach are significant. According to a 2016 Fortune report, a data breach for the Hospitality Industry can cost approximately $139 per record stolen. Consider that the average time to identify a breach is 201 days and that the average time to contain a breach is 70 days. Therefore, depending on the number of credit card transactions you process monthly and some of the potential efforts needed after a data breach (see below) the costs of a cyber-attack adds up quickly.

 

  1. Costs of notifying affected individuals;
  2. Costs of notifying regulatory authorities;
  3. Regulatory fines at home and abroad;
  4. Forensic costs to discover the cause;
  5. Business income loss;
  6. Cyber extortion payments (Ransomware);
  7. Lost customers and damaged reputation;
  8. Implementation of credit monitoring services;
  9. IT expert services; and
  10. Defense and settlement costs.

 

The lesson in recent stories making the cyber headlines is that security goes far beyond simply having the right technology. It also requires training your employees with the proper mindset, attention to detail, as well as a clear awareness of these possibilities. Remember, you cannot possibly think of everything that might happen. My advice to all restaurant owners is to strongly consider reducing some of your risk through securing your IT systems (update software regularly, train employees, monitor social networks, encrypt data, change passwords and confirm your vendor’s security). Even performing all these recommendations will not ensure full protection from a cyber-attack. Therefore, we also suggest transferring some of the risk by purchasing a cyber liability insurance policy to protect your restaurant from losses you would be forced to pay for if you are to ever experience a cyber-attack and your client data is successfully stolen.

 

For more information regarding cyber liability insurance for restaurants please contact Jason VanGotten at jvangotten@corestaurant.org

Spotlight on Safety – Protecting Your Business

February 1, 2017

By The Denver Police Department

  • Ensure the business is well-lit and eliminate places for criminals to hide near the building.
  • Lock all doors and windows when closed or away from the business. Install double cylinder deadbolts where possible, securing all points of entry, such as gates, fences, roof access, etc.
  • Remove cash from registers and leave the register open at the close of business and secure valuables or merchandise out of sight when closed.
  • Post signs outside your business letting criminals know there isn’t money in the register or safe, and keep track of inventory by marking items or logging serial numbers.
  • Start or join a Business Watch Program to build relationships with neighboring business owners.
  • Install an alarm or surveillance system.

Contact your local Denver Police District for a business safety assessment.

Safety Corner – Prevent restaurant theft from happening to you!

February 1, 2017

By Sean Pechan, Colorado Restaurant Insurance

We have been hearing from our clients about a recent uptick in burglaries within the Denver Metro area. Crimes against restaurants are typically crimes of opportunity, and these recent reports have definitely fallen into that category. Most often these burglaries happen after the restaurant has closed, however, in several instances a burglary has occurred during business hours. In almost every instance, the burglar has entered a back door (sometimes even during dinner rush). The perpetrator often takes cash and/or inventory food and liquor, then slips back out the back door of the restaurant.

We believe that implementation of some simple risk management steps can reduce your exposure to these types of loss. Besides costing your establishment potentially thousands of dollars, the loss of ‘peace of mind’ for you, your employees, and at times your customers is immeasurable.

Here are some examples of how we can work with you to help improve security and reduce your risk. Consider updating your security procedures and training all staff – including cleaning staff – so they understand their importance and follow the procedures. Develop practical policies in managing the risk of the backdoor of your restaurant (when it is acceptable to be open and how it should be respected). Limit the access of nonessential vendors and staff to back-of-house operations, especially the office where checks and cash on hand is managed. Keep inventory locked even during normal operations. Mark expensive equipment with ID numbers and keep detailed records of all inventory, and store the information off-premises for ease in reporting after the fact.

Contact your local police department for a business safety assessment. The CRI can also provide additional risk management techniques to reduce exposure to loss. We are available to offer guidance to protect your assets. Call us anytime at (303) 830-2972.