Chapter 4: Managing Risks as a Food Business Owner
Part 1: Risk Management Tips that Keep Your Insurance Rates Low
Adequate insurance coverage can help raft your food service business through an unexpected disaster. When you pair insurance with other risk management strategies, you have a recipe for success.
With some basic prevention, you may even be able to reduce your premiums as well as the likelihood of a liability suit. Give these pointers a taste:
Put Safety First
Your restaurant's kitchen and your bar's seating areas could be theatres for slips, spills, and trips. Be sure to keep these areas dry, clean, and free of clutter. If it's rainy out, ensure your entranceways are kept as dry as possible and put out warning signs so patrons know to tread lightly.
If you have steps leading up to your doorway, ensure the railing is secure. In colder months, keep your sidewalk, porch, and steps shoveled and salted. Though these seem like small things, they can go a long way to reducing General Liability and Workers' Comp lawsuits.
(For more about managing the risks associated with preparing food, check out our blog post "UL 300 and NFPA 96: Kitchen Safety Standards for Restaurant Owners.")
Secure Your Digital Life
If you allow customers to pay for their drinks or meals using smartphones or iPads or use computers to ring up their orders, you'll want to be sure that your digital information is safe.
To reduce the risk of cyber theft, keep your computer systems up to date with antivirus and malware protection software. Also, be sure that your restaurant, bar, or cafe's Wi-Fi network and point-of-sale system is secure with a unique password and a firewall.
Protect Your Business on the Road
As a food service professional, you may often need one of your staff members to pick up a little something – extra napkins, sugar, toothpicks, etc. But before you ever let an employee run errands on behalf of your company, check for proper licensing and insurance.
You don't want to risk the legal entanglement that could happen if they're pulled over or have an accident without a driver's license or Personal Auto Insurance. Plus, you'll want to have a Hired and Non-Owned Auto Insurance plan just in case an accident does happen and your business is sued by the other driver.
Keep Patrons Informed
Food allergies can be deadly, so it's important to be sure your patrons are aware of allergens that could be in your signature dishes. If dishes are fried in peanut oil, make sure your menu notes this common allergen so your customers can make informed choices.
You may also note the presence of MSG, gluten, or other ingredients people may be sensitive to. If you offer items such as rare steaks or sunny-side-up eggs, you may also include a disclaimer about the hazards of eating undercooked animal products.
Train Employees in Food and Alcohol Safety
Employees should have thorough training in safely handling, preparing, serving, and storing food. Chefs and cooks should keep their hair covered and have appropriate protective gear to minimize the chance of cuts or burns.
Employees should also have training in alcohol awareness and safety, which includes the ability to recognize signs of intoxication. To learn more, just to the "Tips for Limiting Liquor Liability Lawsuits" section on page XX of this guide.
Comply with the Affordable Care Act
As a small-business owner, you are responsible for securing your own personal Health Insurance. As of January 1, 2014, you can be penalized if you don't carry health coverage. To meet coverage requirements, you can choose from a variety of plans available on HealthCare.gov's Individuals & Families Marketplace.
Premium costs depend on which plan you choose, where you live, your family size, and your income. For more information about the ACA and what it does, check out WebMD's primer, "Health Care Reform: Health Insurance & Affordable Care Act."
Business owners with fewer than 50 full-time-equivalent employees are not required to offer Health Insurance to their employees, but if you wish to do so, check out the SHOP Marketplace exchanges. Starting in 2015, businesses with 50 or more full-time employees will have to pay an Employer Shared Responsibility Payment if they don't already offer Health Insurance that meets the minimum essential coverage requirements.
Pay Your Quarterly Taxes
As a self-employed food services professional, you are responsible for regularly paying your own income tax and self-employment tax during the year (in April, June, September, and January). Depending on where you live, you may also have to pay quarterly income taxes to your state.
If you're late on those payments, you may owe penalties and interest in addition to your back taxes. To avoid that unpleasant situation, be sure to pay your estimated taxes in equal installments when they're due. You can file and mail Form 1040-ES vouchers to the IRS, or use the IRS Electronic Federal Tax Payment System to complete your estimates.
Next: Part 2: Dram Shop Laws and Your Food Service Business
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