Restaurant Insurance Corp. (RIC), a specialty insurance company, released findings from a study of claims filed by its insured restaurants since 2002 showing that slips, trips, and falls by patrons and others are by far the most prevalent claims suffered by full-service restaurants with each such claim resulting in $3,550 in claims costs.
“Restaurateurs need to look at their slip, trip, and fall hazards and take steps to ensure safe flooring, adequate lighting, and quick spill clean-up routines. Just think how many meals a typical full-service restaurant has to serve to make up $3550 of additional costs,” noted RIC President and CEO Paul Giunto.
Additional findings included:
· The second biggest cause of general liability claims was biting/swallowing a foreign substance with 765 such claims out of a total of 2,332 general liability claims.
· Among property claims, the most costly claims were for fire losses accounting for $5.3 million of losses. From a frequency perspective, the most prevalent were equipment/electrical breakdown claims. However, these results were skewed by the New York City blackout of 2003, where RIC paid a significant number of relatively small claims (average claim cost: $2,908). The second most prevalent claims were for wind, hail, water damage with 127 claims resulting in a total of $2.2 million of damage.
· Almost 51% of workers’ compensation claims were the result of two causes: slips, trips, and falls and cuts or puncture wounds reinforcing the importance of basic safety precautions and good training.
The purpose of the RIC claims study was to determine the causes for claims and the frequency and financial impact of claims by cause. RIC’s Giunto added, “Restaurants generally are quite safe. It is our hope, however, that by sharing this claims information with restaurateurs, they will have a better understanding of what causes most claims and the financial implications of these claims.”
Looking at more than 3,700 claims filed since 2002, RIC divided its analysis by major line of business insurance coverage: general liability, property and workers’ comp. Within these three categories, it was then determined what the greatest cause for claims was and the associated costs for claims.
Although the findings were reportedly not necessarily surprising, they do provide baselines that restaurant owners can use to run a safer, more efficient business. “Business insurance costs are driven by two primary factors: exposures (e.g., sales or payroll) and past losses or claims,” advised RIC Claims Director Roxanne Barnes. “Reducing claims costs is one way that restaurant owners and managers can reduce the over-all cost of their insurance program over time.”
A complete copy of the Restaurant Insurance Corp. claims study entitled “Understanding Restaurant Insurance Claims: A Recipe for Success” is available by request at www.ricorp.biz.
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