Running a food business means doing what you love: cooking for people and earning a living for it! Hearing one customer rave about your culinary skills can make the long hours in a hot kitchen worth it.

But as a food business owner, you take on a lot of risks to pursue your dreams. For starters, any time you serve the public, there’s a chance for accidents you can be held accountable for. Your employees work in an environment full of potential hazards (sharp knives and hot stoves). And you have a lot of property you depend on to keep your operations running smoothly – property that could be easily damaged.

Let’s look at your risks in more detail and see what steps you can take to safeguard your business.

1. Customer Slip & Falls

At any business, a customer could walk through the door, trip, and fall. But the odds of that happening may be even higher in the food-service industry. Food businesses get a lot of foot traffic, and more people means more chances for accidents. Plus, spills or dropped food can go unnoticed during a rush, and an unsuspecting customer could easily take a fall at your establishment.

As you may already know, bodily injuries that happen on your property are your responsibility. You could be sued for medical expenses and more.

To prevent these injuries:

  • Keep walkways free of tripping hazards, like cords or loose tiles.
  • Clean up spilled foods or liquids immediately.
  • Use entrance mats to catch rainwater and mop up the excess.
  • Keep outside steps, pathways, and parking lots clear of ice and snow.

2. Food Allergies / Product Liability

Catering to varied tastes, dietary restrictions, and allergies is a challenge for many cooks. You can still make the food you love, of course. But if you don’t want to be held liable for the physical harm your food causes, you must clearly list the following on your menu.

  • Any allergens that may be in the food (dairy, wheat, soy, nuts, shellfish, etc.).
  • Warnings that under-cooked meat and eggs can cause harm.

Remember, allergies to certain foods, such as peanuts or shellfish, can be life-threatening. That’s why appropriately labeling menu items is so important.

If you offer allergen-free foods, make sure you prepare them separately to avoid cross-contamination. Otherwise, if a customer becomes ill because some peanuts accidentally made it into a batch of chocolate-chip cookies, you could have a product liability lawsuit on your hands.

3. Employee Injuries

Employee injuries are a real danger in the food industry.

For example:

  • Boiling water could scald an employee.
  • A cook could cut their finger.
  • Kitchen workers could hurt their backs while unloading supplies.

To avoid these injuries, prioritize workplace safety training. For example, all employees should know how to properly lift heavy boxes to avoid back injuries. They should also be required to wear non-slip footwear to reduce the chance of slip-and-fall injuries. And each employee should be aware of how to handle, clean, and store sharp kitchen utensils.

Make sure everyone receives this training when they are hired, and conduct periodic refreshers to keep injuries at bay.

4. Liquor Liability

If you offer alcohol at your business, you can be held responsible for the actions of intoxicated people you’ve served. So if a customer gets into a drunken brawl or causes a car accident after consuming alcohol at your business, you could be sued for the damage they cause.

While you can’t control the actions of your customers, you can control how much alcohol you allow them to consume. Anyone serving alcohol at your business should complete an alcohol-service certification program, such as Training for Intervention Procedures (TIPS). TIPS teaches servers about the following.

  • Their legal responsibilities when serving alcohol.
  • How to prevent intoxication and recognize the symptoms.
  • The steps to take when a customer has too much to drink.

Create clear policies for staff to follow on how to handle an inebriated guest. Finally, make sure to card everybody to prevent accidentally serving a minor.

5. Data Breaches

Most hacking victims are actually small businesses. Food businesses may be especially tempting targets because of the following reasons.

  • They accept credit cards.
  • Their point-of-sale systems are often older and less secure.

According to the Verizon Data Breach Investigations Report for 2017, 96 percent of data breaches in the accommodation and food services industry originate from an external hacker. For food service businesses, the majority of these attacks target the point-of-sale system. And if your food service business gets hit, it can cost you big. In fact, data breaches cost small businesses an average of $36,000 to $50,000 in recovery expenses.

Obviously, a major data breach could be financially disastrous for your business. That’s why it’s important to limit access to your point-of-sale system. If it’s on a computer, make sure you and your staff use it only for company business – not for surfing the web and reading email. Otherwise, you risk accidentally downloading malware that could lead to a data breach.

6. Property Damage

To run your business, you’ve invested in a lot of property and equipment.

For instance:

  • A storefront
  • Food truck
  • Commercial stove
  • Kitchen equipment
  • Inventory

If that property is damaged, it could be costly to replace. One way to protect your gear is to proactively prevent fires – a common cause of property damage in the food industry. You might want to take the following actions.

  • Invest in an automatic fire extinguishing protection system, including hood and filter systems.
  • Make sure fuel shut offs are easily accessible and well marked if you use grills and fryers.
  • Purchase plenty of fire extinguishers and check the gauge monthly to make sure it’s properly charged.

In addition to these preventative measures, every food business should also have business insurance to help pay for these incidents.

Are you prepared for these business risks? If not, get your free quote from Insureon today!


About the Author

Rebecca Hosley is a content writer for Insureon, an online small business insurance agency. She is based in Chicago and frequently writes about small business insurance on Insureon’s Food for Thought blog.


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