Risk Management Strategies For Food Businesses

Risk management tips for the food industry

As profitable as the food and beverage industry can be, there are risks practically around every corner. Whether it’s from the business’ property, the equipment you use, or the food being served, a simple accident can lead to detrimental consequences. To avert them you have to make yourself aware of as many of your potential risks as possible and put safety measures in place to minimize them. Not sure what particular risks you have or perhaps you’re not sure how to go about preventing these risks? To help you out, here are some risk management tips for the food industry.

Property Maintenance

Regularly checking your property and fixing issues as soon as you see them can save you a lot of time and money in the long run. You can reduce the risk of damage to your property and to everyone that uses it by taking extra precautions to ensure safety. An example includes extra hand railings and adding safety measures for extreme weather. However, sometimes an accident does occur- like slipping and falling on the restaurant floor because it had been raining outside and shoes were wet. In this case, the best protection would be General Liability insurance to cover costs if the person was seriously injured. Another helpful safety measure would be to make sure all appliances are up to date such as refrigerators, heaters, etc. It’s so easy to forget these but it can prove disastrous to a business if, for example, a customer files a lawsuit for food poisoning because the refrigerators aren’t working properly causing food spoilage. Keeping track of renewal dates are small tasks that can save you a lot of money.

Train Your Employees

Your employees are the reason why the machine keeps running so making sure that they are safe doing so should be paramount to you. Training them can help you avert situations that could potentially become dangerous and costly. Some areas you should consider training your employees in are:

  • Safety Procedures: Educate your staff on the measures they should take to ensure their safety. This includes: how to handle food as well as storing and prepping the food supply for business, security measures to prevent a robbery, fire or other catastrophes such as a natural disaster.
  • Work Safety: These are going to be basic precautions in the workplace for everyone’s safety. It will include teaching employees how to lift and handle heavy equipment correctly and making sure chefs are handling and storing sharp knives correctly. It could also include heat protection tools such as potholders. As an extra safety cushion, it would be a good idea to invest in Workers’ Compensation insurance which could help with payment for medical needs and any time off needed from work to recover from injuries that may occur.
  • Alcohol Service: some states mandate training in this area showing how important it is to make sure your employees are well advised when it comes to serving alcohol. If an intoxicated guest causes harm to themselves or others on your property, you may be held liable, so it’s essential that employees are trained on how to detect signs of intoxication, ways to refuse service and handling intoxicated guests.

Use Technology to Safeguard Your Business

The digital age has added a new layer to doing business, it makes it so much easier to reach a wider audience, but it also comes with the newer risk of cyber theft. A restaurant is at risk if it stores customers personal information, such as credit card numbers, on a digital device. However, there are some technological precautions you can take to ensure the safety of your food business:

  • Anti-virus software: firewalls and software designed to keep malware, phishing, and viruses out of your business’ digital system.
  • Password protection for your Wi-Fi connection: nearly every establishment offers Wi-Fi, it lures in customers, especially when it’s easily accessible- like when no password is needed. However, that leaves the business more vulnerable to cyber-attacks, so make sure to select a secure network and only have the password made available to paying customers.
  • Security Cameras: not the most tech-savvy solution but it does allow you to be able to watch out for, but also deter, criminal activity in and around your building.

Make Sure You Follow All Health and Safety Codes

There are regulations in places, that usually vary from state to state, that must be followed and there are routine checks to make sure this is the case for every establishment dealing with food. The frequency also varies but often it’s once a quarter and you won’t be notified of the checkup. Always be prepared by making sure the codes set for the following areas:

  • Employee Hygiene
  • Food Storage
  • Health Inspections
  • Facilities and Storage
  • Safety with Equipment and Supplies

Following regulation ensures that your business avoids violation charges and, more importantly, your employees are working in a safer environment.

Coverage for Supply – Chain Risk

Food businesses are heavily dependent on their food suppliers. Business can be seriously impacted if anything happens to the supplier such as not being able to make a delivery due to adverse weather. It means that the menu can’t be served at full capacity and if it’s affected for a longer period of time you may have to temporarily shut down until supplies get to you, causing major loss of income, even if you’re only closed for a couple of days. The best way to stop supply chain disruption from halting your operations is to get Business Interruption insurance meaning that if a supplier that is on your policy prevents you from being able to run your business you are covered financially for that period.

Check Your Licenses

Within the regulations above, a requirement will be to have the right licenses present on the premises. Most licenses you would have had to obtain before opening the restaurant, these include a business license to be able to legally operate your business and a liquor license if you plan on selling or serving alcohol. Another license you should get is a food license but that will usually be given to you after the first health inspection of your property. Be sure to keep them on the business property at all times so that they are readily available when needed. For example, these documents would be needed during health inspections or incidents involving drunk guests on site where police might require seeing it.

Disclose Any Food Allergens

With over 15 million Americans reporting to have food allergies, selling a product without making people aware of allergens can have serious consequences, not just for your customers but for your business. Make sure to provide customers with ingredients and allergens contained in all dishes, whether it’s on the menu itself or making sure those serving customers are fully aware of what allergens are in what dishes so that customers are able to make fully informed choices when eating at your restaurant.


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