The restaurant industry has struggled to recover from the losses caused by the COVID-19 pandemic. In early 2023, there were almost 2 million unfilled jobs in the hospitality and leisure industry, with many former employees switching to office jobs.
The industry reached pre-pandemic levels in September 2023, but many restaurants remain short-staffed and overburdened. Due to hiring challenges, restaurant owners must consider strategies to attract and retain employees.
Protecting employees with restaurant insurance is one of the most effective methods and benefits the employer. While there are various types of restaurant insurance, we will discuss the policies that most benefit employees.
Workers’ Compensation Insurance
According to the U.S. Bureau of Labor Statistics, 2.4% of restaurant workers experienced non-fatal injuries or illnesses in 2022, and 1.1% had to miss work. Many of these injuries were due to burns, sprains, cuts, and lacerations and often required medical care.
You can protect your financial interests and employees by carrying worker’s compensation insurance as a restaurant owner. Workers compensation covers medical bills, missed wages, and disability benefits if an employee is injured. Additionally, it pays out a death benefit if an employee is fatally injured at work.
Restaurant owners who do not have a current policy risk fines from the state of Illinois and lawsuits from injured employees. For example, a restaurant employee in Austin lost four fingers in a meat grinder accident at work. The company’s worker’s compensation policy paid 70% of his lost wages while covering his medical bills.
However, the restaurant owner backdated the workers’ compensation policy, meaning it was not in place before the injury occurred. The restaurant owner and manager were indicted for insurance fraud, and the injured employee moved forward with a civil suit.
An active worker’s compensation policy will help your business avoid paying claims out of pocket and ensure your employees receive proper medical care and compensation. Also, an active policy is necessary to maintain legal compliance.
Disability and Life Insurance
Disability and life insurance policies pick up where worker’s compensation leaves off. These policies pay benefits when employees are injured or leave outside work. While not mandatory, adding both to your benefits package makes it easier to compete for employees in the tight labor market.
The Affordable Care Act mandates that companies with 50 or more full-time employees provide health insurance. However, restaurants often rely on part-time employees, allowing them to avoid providing coverage.
As a result, only 34% of leisure and hospitality workers have health insurance, according to the U.S. Bureau of Labor Statistics. Even if you are not required to provide health insurance, it can help your restaurant and its employees.
Restaurant owners have been dealing with a labor shortage, and offering health insurance provides a competitive advantage. Also, insured restaurant workers feel valued and are more likely to stay for the long term.
You can select a small or large employer group health insurance plan, depending on the size of your establishment. Additionally, you can choose the cost-sharing contribution, deductible, and other terms to ensure the plan is within your budget. Finally, you might be eligible for a tax credit when purchasing a small business group insurance plan.
Business Interruption Insurance
Owners discovered the difficulty of navigating business interruptions during the COVID-19 pandemic when over 110,000 restaurants closed. However, pandemics are not the only threat to operating a successful restaurant.
Kitchen fires, construction projects, and other unexpected issues can lead to temporary closures. Fortunately, you and your employees can avoid financial losses if you carry business interruption insurance.
This policy pays employee wages during the closure while covering essential business expenses, such as rent and missed revenue. With this policy, you can maintain relationships with your employees and manage your finances until your restaurant reopens.
General Liability Insurance
Accidents can happen at any time when operating a restaurant. For example, a server could drop a bowl of hot soup on a customer or fail to clean up a spill that a customer later slips on.
A general liability insurance policy protects employees and restaurant owners from legal claims if a customer is injured or suffers property damage. Instead of you or the employee being personally liable, your policy will cover medical expenses, legal fees, and other financial obligations resulting from the claim.
Find Out How to Protect Your Employees With Restaurant Insurance
There are numerous factors to consider when purchasing restaurant insurance to safeguard your employees. For instance, the size of the establishment, number of employees, and potential risks determine the type of coverage needed. Without the proper guidance, you may over-insure or under-insure your restaurant, creating significant financial risks.
Instead of finding the best policy, contact Pro Insurance Group. You will speak directly to an experienced agent who will discuss your policy options.