Running a restaurant is a constant balancing act between quality food, excellent service, staffing challenges, and rising costs. However, one area many owners don’t think about until it’s too late is liability risks. Most restaurant owners know about the big ones, including slip-and-fall accidents, kitchen fires, and maybe a customer complaint about undercooked food. However, the real threats often come from overlooked areas. These are the things that seem minor or unlikely until they end up in court or on an insurance claim.
In this blog, we’ll explore five of the most commonly overlooked liability risks that restaurant owners face and how to protect your business from each one.
1. Third-Party Delivery Liability
Apps like DoorDash, Uber Eats, and Grubhub have revolutionized food service, especially after COVID. But they’ve also introduced a gray area of liability that many restaurant owners aren’t fully prepared for. If a customer gets food poisoning from a meal that was delivered cold, or a third-party delivery driver is involved in a car accident while transporting your food, where does your responsibility end?
The answer isn’t always straightforward. Sometimes, a customer may hold your restaurant accountable, even if the mishandling happened during delivery. Your general liability insurance policy might not cover incidents involving third-party contractors.
How to protect yourself:
Understand the insurance coverage of any third-party delivery services you use. If you’re delivering with your employees, ensure your commercial auto policy is current. You may also want to explore specific endorsements for non-owned auto liability or delivery-related coverage.
2. Employee Lawsuits & EPLI Gaps
Most restaurant insurance policies cover general liability and property damage, but few include Employment Practices Liability Insurance (EPLI). That means if an employee sues for harassment, wrongful termination, or wage violations, you could be on your own financially.
In today’s environment, even a single claim, even if unfounded, can cost tens of thousands of dollars in legal fees and settlements.
How to protect yourself:
Invest in EPLI coverage. It’s often available as an add-on to your policy and is critical in protecting against HR-related claims. Also, document your workplace policies, keep training current, and promptly address any complaints.
3. Liquor Liability Blind Spots
If you serve alcohol—even just beer and wine—you carry extra liability. If a customer is overserved and gets into an accident, your restaurant could be held responsible under dram shop laws. Yet many owners assume their general liability policy covers alcohol-related incidents. It usually doesn’t.
How to protect yourself:
Ensure you have liquor liability insurance. It’s not just a box to check—it could save your business in a serious incident. Also, staff should be trained on safe serving practices, verified IDs, and documented refusal of service when appropriate.
4. ADA Compliance Issues
The Americans with Disabilities Act (ADA) requires that public spaces, including restaurants, be accessible to everyone. That includes entrances, restrooms, seating, and even your website. Non-compliance can lead to costly lawsuits, even if no actual injury occurs.
How to protect yourself:
Work with a local code inspector or ADA consultant to audit your restaurant for compliance issues. Many lawsuits arise from easily fixable problems, like restroom access or a lack of clear walkways. Also, consider updating your website to include accessible features like screen reader compatibility and text alternatives for images.
5. Social Media and Online Defamation Claims
It might sound far-fetched, but in the age of viral posts and online reviews, what your business says online can become a legal liability. You could face a defamation claim if a staff member posts something offensive or your social media manager claps back at a negative review with a personal attack.
How to protect yourself:
Establish clear policies around who manages your online presence and how they should respond to negative feedback. Avoid personal attacks, name-calling, or revealing customer information, no matter how frustrated you feel. Consider media liability insurance if your brand relies heavily on digital engagement.
Secure a Comprehensive Restaurant Business Insurance Policy with Restaurant Pro Insurance
As a restaurant owner, it’s easy to get caught up in the day-to-day and overlook the bigger picture. But ignoring these hidden liability risks can come back to haunt you. However, most of these threats are manageable with the right professional liability insurance partner and proactive planning. At Restaurant Pro Insurance, we specialize in helping restaurant owners identify and close liability gaps. Whether you run a neighborhood café, a fine dining establishment, or a multi-location franchise, we’ll help you stay protected, so you can focus on what you do best: serving great food.
Need help reviewing your restaurant’s liability coverage? Contact us today for a personalized restaurant insurance coverage consultation. From commercial auto insurance to commercial property insurance and everything in-between, we’re here to help you safeguard every corner of your business.