restaurant insurance

Owning a restaurant can be a risky business. It’s a very competitive business and the number of exposures for an owner is huge and growing all the time, including in the area of employee-related risks. Yet, there are some restaurant owners that don’t take the time to purchase employment practices liability insurance (EPLI).


The fact is that many restaurant owners don’t really consider employee-related risks or simply think the risks don’t apply to them. This is most certainly not the case. Regardless of how meticulous one is in their hiring practices, or how well a manager or owner may treat their employees, it only takes one instance where someone feels they weren’t fairly treated to ignite a powder keg.  


Owners aren’t always around to monitor workplace behavior


Just because everyone seems happy and there’s no sense of disharmony in the workplace doesn’t mean that someone won’t decide to file a lawsuit of this type. Employment practices liability (EPL) is a serious issue. This kind of thing happens all the time and without right restaurant insurance in place to protect the business from litigation and all manner of claims, including:


  • Discrimination



  • Retaliation


  • Termination


  • Constructive discharge


  • Failure to hire, supervise and demote


  • Personal injury resulting from infliction of emotional distress, and


  • Humiliation, defamation and invasion of privacy


Unbeknownst to many owners, their managers may engage in sexual harassment or subtle forms of discrimination and these behaviors could result in claims against the restaurant. When interviewing and hiring new employees, asking the wrong types of questions or saying the wrong things can often cause problems as well.


The average size of many EPL claims is rising each year. The average jury award on these claims from 1994 to 2006 rose from $93,000 to $200,000. Today the median award amount is well over $200,000, and some claims far exceed these numbers. Many restaurant owners make excuses for not buying an EPLI policy, including their belief that the cost of these claims is relatively low and that they can self-insure this exposure. But the numbers don’t lie and the costs could be devastating!


Some restaurant owners simply consider EPLI to be an optional coverage. Nothing could be further from the truth. Others mistakenly assume they are covered under their general liability policies. However, most general liability policies have a standard exclusion for employment practices liability exposures. When insuring a business of this type and selecting which restaurant insurance policies to procure, make sure that EPLI coverage is among those.