The coronavirus has taken a toll on restaurants in Canada. According to Restaurants Canada’s outlook survey on the industry from April, respondents’ sales plummeted from mid-February to the end of March. As provinces begin to reopen with social distancing measures for diners in place as well as other health and safety protocols meant to curb the spread of the virus, restaurants will likely not be back up to full capacity for some time.
“The hospitality industry is social, and when you restrict gatherings to less than five people or with spacing two metres apart, this harms the potential earnings to this type of industry,” said Tyson Peel (pictured), vice president at Burns & Wilcox Canada.
In turn, Burns & Wilcox has seen many business owners having to restructure and lay off employees. With partial reopening continuing across Canada at a slow and steady pace, pressure on business owners in the hospitality sector isn’t abating and could force increased closures of business for good.
“We will still see an impact due to the new safety guidelines which need to be adhered to for these locations to be open,” added Peel. “This will limit the number of patrons, which in turn will reduce their sales and profitability.”
Besides pandemic-related challenges, restaurants have traditionally faced an extensive menu of exposures. The most common types of claims have included liability issues caused by slip and falls, food contamination or liquor-related claims from over-serving, and property claims from water damage losses due to plumbing failure or fire losses due to the high exposure of cooking on the premises, according to Peel.
“The hospitality sector is also subject to break and enters as they traditionally have a high amount of cash and liquor on site,” he noted.
However, there are also several key insurance coverages that can limit restaurant clients’ many exposures. Burns & Wilcox offers a suite of coverages that help to protect an insured from various claims or incidents. The traditional policy includes commercial general liability, property, business interruption, crime, and boiler and machinery coverage, listed Peel.
“We have some additional add-ons that enhance our policy,” he told Insurance Business. “These include restaurant contamination coverage, which helps repair damages to the insured’s reputation due to a food-related incident. We can also offer legal expense coverage, which the insured can use to help with any potential legal issues that may arise.”
As restaurants continue to open their doors to more customers, there are likewise some risk mitigation strategies they can implement. For one, businesses should follow and adhere to new operating standards that protect their employees and clients based on the province that they operate in, among instituting other best practices.
“They should develop written guidelines that highlight the new safety measures taken,” explained Peel. “These should also be documented in a logbook to highlight when surfaces have been cleaned or other measures have been taken place to keep the premises safe for patrons. Establishments should also have a written log of all patrons entering to help with contact tracing in case an outbreak or a positive test of COVID-19 is found at the premises.”
During this time, brokers can rely on the expertise offered by the Burns & Wilcox team as their restaurant clients navigate the new normal brought on by the pandemic.
