Five Types of Insurance That Could Protect Your Restaurant

five types of insuranceNo matter how well you train your staff or how tight your safety record, accidents and mishaps are inevitable. Below are five types of insurance that could protect your restaurant when bad things happen.

General Liability Insurance

Protect your restaurant financially with general liability insurance. This type of insurance will protect you in case you’re sued for slips and falls or if someone becomes ill because of something they ate at your restaurant. General liability insurance will also protect your restaurant in case you’re sued for damages caused by false advertising or even libel.

Auto Liability Insurance

Auto liability insurance isn’t just for restaurants who offer delivery service. If even one of your employees drives a company vehicle, you’ll want auto liability just in case there’s an accident.

Personal Injury Insurance

Many types of accidents can happen at your restaurant, and some can result in a serious injury to patrons. In that case, personal injury insurance will help protect you financially if a customer sues you because they were seriously harmed at your restaurant.

Liquor Liability Insurance

Unfortunately, a mixture of alcohol and humans means a higher incidence of violence and possible damage to personal property. Liquor liability insurance can protect you financially if an intoxicated person harms another patron or damages your property. If you’re a restaurant that serves alcohol, having liquor liability insurance is a good bet.

Worker’s Compensation

If an employee is injured while working at your restaurant, worker’s compensation will protect you and your employee financially.

Since insurance offers peace of mind and financial protection, you’ll want to talk to a qualified attorney to determine which type of insurance is best for your restaurant.

Create a Safe Environment in Your Restaurant

As a restaurant owner, maintaining safe working conditions for your employees is your responsibility. But you can’t do that without the right systems and processes in place. Below are a few tips on how to create a safe environment in your restaurant both for your workers and your customers:

Get Educated

As a restaurant owner, make it a priority to learn about the health and safety risks associated with your type of restaurant. For example, auto accidents are a greater risk for restaurants that have a delivery service than for those that don’t.

Create Written Policy

Operational safety procedures and rules should be incorporated into your employee handbook, and all employees should receive safety training as soon as they’re hired. You should also help keep safety procedures fresh in the minds of existing employees by incorporating them into your daily processes.

Multiple Training Materials

When training employees, make sure you approach the material in a way that will appeal to people with any of the three basic learning styles—visual, auditory, or tactile. Videos, pamphlets, and live demonstrations that involve hands on practice should help you reach all employees no matter their learning style.

Safety Meetings

Have regular safety meetings where your managers can review safety procedures and discuss any current safety issues. Safety meetings will reinforce the safety training employees received and help you address any safety problems before they become bigger issues.


As part of your quarterly evaluations, review your employees’ familiarity with the safety procedures. You should also consider rewarding managers who have the fewest accidents occurring on their shifts.

Incorporating the right safety training and procedures into your daily operations will help make your restaurant safer.

Does Your Restaurant Use A Tip Pool? Make Sure It’s Legal

Tip PoolTip pools are common in the restaurant industry, but if you’re using a tip pool make sure you’re following the law as stated in the Fair Labor Standards Act (FLSA). Below are a few tips on making sure your tip pool is legal.

Understand Term Differences

Tip pooling and tip sharing are often conflated, but the two terms are different. Tip pooling is a collection of tips divided amongst employees who regularly receive tips—waiters, hosts, bartenders etc. However, tip sharing is when tipped employees allocate a percentage of their tips to other employees such as busboys.

Understand The Rules

There are strict rules regarding tip pooling and tip sharing.

  • Only those employees who would customarily receive tips can participate in a tip pool. This means that supervisors, managers, kitchen staff, and janitors should not participate in tip pools. Generally speaking, anyone who is not directly involved in customer service should be excluded from a tip pool.
  • Employers cannot participate in tip pools. If you’re setting up a tip pool, you cannot require employees to pay a percentage of their tips back to you as the employer.
  • When tip sharing with employees such as busboys, tipped employees should not be required to share more than a customary and reasonable amount—generally 15% or less.

Clarify Guidelines

To avoid resentment and future lawsuits, clarify your tip pool and tip sharing guidelines to everyone. And make sure you have clear procedures on how tips in the tip pool should be disbursed.

If you’re experiencing tip pool disputes at your restaurant, talk to a qualified attorney to help you through the process.

Restaurant Owner Tips: How To Terminate An Employee The Right Way

r owner tipsTerminating an employee is difficult, even if they deserve to be fired. For restaurant owners who want to terminate any employee, it’s important that certain protocols are followed to avoid becoming vulnerable to a lawsuit. Below are a few tips on how to terminate a restaurant employee the right way:

No Surprise Terminations

An employee who has no idea that they’re at risk of termination is often an employee who will become angry and consider suing. To avoid this situation, never surprise your employees with termination. Let them know that they are in line for a termination for bad performance far in advance. Or, if they’re at risk of a layoff, give employees fair warning that you may need to let them go.

Keep Detailed Records

If you’re terminating an employee for poor performance, carefully document their bad performance and give them an opportunity to correct their behavior. A matter of fact, you should have a written policy that states the performance standards and what type of behavior could lead to termination.

Treat Everyone Equally

Never terminate an employee for behavior that’s allowed when others do it. Your rules should be applied to everyone equally. Failure to treat all your employees the same could make you vulnerable to lawsuits and an investigation by the EEOC.

Get Witnesses

Never rely only on your experience with an employee as the only basis of their termination. You should get written statements from others documenting their experience with the employee before you fire them. Having several people state that they’ve seen the employee engage in bad behavior or poor performance will protect you if your sued and could save you from paying unemployment insurance.

If you don’t have an employee handbook that details employee rules and policy, talk to an attorney who can guide you through the process of creating one.

Four Legal Tips For Creating and Using Restaurant Loyalty Programs

Loyalty ProgramsRestaurant loyalty programs are an effective tactic for rewarding regular customers, retaining new customers, and increasing the profits of your restaurant. But there are some legal considerations you should keep in mind before launching your next loyalty program.

  1. Use a trustworthy tracking system. If you’re using a loyalty program that’s more complex than a punch card, you’ll probably store customer data and track their purchases and accumulation of points/rewards. In that case, you’ll need to work with a trustworthy tracking system or third-party vendor who will protect your customer data and not illegally exploit it. Remember, if you collect customer data, you are required to do your best to protect that data from prying eyes.
  2. Keep your loyalty program simple and clear. Whatever loyalty program you adopt, it’s important that customers can easily understand it’s terms and conditions. Work with an experienced attorney to create a terms and conditions sheet and privacy policy that will stand up to legal scrutiny and help customer avoid frustration.
  3. Add customers legally. If you want to use existing data to add customers to your new loyalty program, you must not add those existing customers into a new program unless you have their permission. To get permission, use an automated opt-in system that allows customers to join your loyalty program independently without you manually adding them. This way there’s no dispute about whether or not you were given permission to add them to a new list.
  4. Promptly inform existing customers of changes. If your loyalty program is changing, you must inform customers of the change and give them an opportunity to leave the program if they don’t agree with the changes. For example, if you decide to share customer data with vendor/partners, you must ask permission first if this type of sharing was not part of the customer’s original agreement with you. You cannot implement a change without getting permission first.

The next time you expand or change your loyalty program, make sure you consider all of the legal ramifications of doing so.