Restaurant and liability risks under the spotlight

Cape Town - The South African travel and tourism sector is forecasted to grow at an average rate of 7.6% annually. Critical to this success is South Africa’s restaurant and hospitality sector which plays a key role in delivering memorable experiences for tourists visiting our shores, and the broader economic development that ensues. As such, mitigating risks for restaurant owners is key to securing longevity in the industry.  

According to the leading local restaurant booking app Dineplan Industry Trends Report 2024, the service processed 4.3 million reservations in South Africa during the course of 2023, seating 22.6 million diners at restaurants across the country. Stats SA’s Food and Beverages Survey for May 2024, also found that the total income generated by the food and beverages industry increased 3.7% year-on-year.  

According to Paula Harvey, Business Development Manager at South Africa’s largest short-term insurer, Santam, not only does this sector generate a healthy income and provide job opportunities, but it also puts our country on the international map, drawing foodies from all over the world. South Africa currently features two restaurants in the top 100 of the World’s Best Restaurants Awards – Fyn and La Colombe. 

Restaurants and coffee shops have also become a destination: eateries with facilities for children to play and a childminder looking after the young ones are a dream come true for many exhausted parents. Being able to relax for an hour or two while eating food that you did not have to cook, whilst having someone take care of energetic kids is priceless!  

Child-friendly restaurants usually offer various activities, toys and equipment to keep children busy for hours. Jumping castles, jungle gyms, bicycles, ponds, train rides, swings and slides are included in these.  

The fact that eateries and other establishments in the hospitality and leisure sector offer activities increases their liability risks. This means that food poisoning or slip and fall risks are no longer the only worry for restaurateurs. 

To protect restaurant owners against these risks, they can cover their business with liability insurance. This forms part of the overall business risk mitigating strategy. By understanding what risks affect your specific business and what insurance solutions are available and appropriate ensures that you have adequate protection, in case accidents happen. 

“Determining how much liability cover you need is the tricky part,” says Harvey.  

She suggests the following to mitigate risks:  

• Ensure that you put up an indemnity notice. Speak to your lawyer to make sure you adhere to industry regulations, laws and municipal bylaws.  
• Train your childminders in First Aid. Also make sure that you have the correct number of childminders per number of kids.  
• Make sure that you service or maintain the equipment in your kiddies play area regularly. Also, clean these on a daily basis. 

Harvey adds, “many of our clients ask us how much liability cover is adequate. Our answer is always to consider the number and kind of activities that you offer, which could increase the risk of injury. Also, who are your clientele? Should anything happen to patrons at your establishment, for which you could be held legally liable, they will probably want compensation.”

No two businesses are the same, intermediaries can help you understand the type of insurance that is suitable for your business and ensure you have enough cover for the risks associated with your business.