L&T Blog

5 Essential Risk Management Strategies for Restaurant Owners

November 14, 2022

Running a restaurant is often as risky as it is rewarding. In bustling public environments like these, both your staff and customers constantly encounter liabilities that could expose you to risk, raise insurance premiums — or worse yet, result in a lawsuit — if not handled properly.

You may not be able to avoid every mishap, but the right strategies and processes can certainly help reduce their frequency.

From front-of-house to back, owners and employees should be experts in dealing with common dilemmas, whether a chef cuts his hand, a customer has an allergic reaction or the POS system gets hacked.

These risk management tips, coupled with federal and local guidelines, will help you keep your restaurant safe and profitable while ensuring patrons have a comfortable, enjoyable dining experience.

Food Handling

Food poisoning is the No. 1 risk for restaurants, according to the CDC. One slipup is enough to not only contaminate your menu items, but also your reputation.

For this reason, anyone who prepares, stores or handles food should undergo rigorous training that meets or exceeds your state’s regulations.

Common issues include improperly stored or spoiled ingredients, as well as cross-contamination from raw meats or allergy-prone food groups like gluten, nuts and dairy.

Every employee should take these issues seriously and understand how to prepare food in a way that’s both delicious and safe.

Kitchen Safety

Mitigating risks in the kitchen will help you keep employees at work and out of the hospital. Workers’ compensation claims can be costly, so consider these kitchen safety best practices:

Layout: Your kitchen should have a spacious, strategic setup to prevent collisions, slips and falls.

Cuts: More than 20% of restaurant workers’ compensation claims are due to cuts and lacerations. Beyond in-depth knife-handling training, provide your chefs with abrasion-resistant gloves and non-slip cutting board mats.

Burns: Burns are also likely in an environment with boiling water, sizzling pans and open stoves. Enforce a full-coverage dress code, supply potholders and other protective tools, and keep areas near hot equipment free of clutter.

Heavy Lifting: Show employees how to properly carry heavy objects by keeping their back straight and knees bent. Additionally, follow suppliers’ height guidelines for stacked boxes and keep big, bulky items on lower shelves for easier access.

Despite the most rigorous training and precautions, accidents happen. Make sure you have a sound workers’ comp insurance plan in place if they do.

Alcohol Liabilities

Even if you’re legally licensed, restaurants are often liable for serving alcohol to minors or over-serving patrons of legal age. Every state requires some type of alcohol risk-management training to help prevent this, which covers the following protocols and more:

Training: Employees should be able to spot two things: a fake ID, and a clearly intoxicated customer. The first step is ensuring everyone drinking alcohol in your establishment is over 21 and presents valid identification to prove it. The second step is knowing the warning signs when someone has had too much to drink — then ensuring those customers are not driving home.

Policy: Make it known that you have the right to refuse service to anyone who asks for another drink. Post the policy in a high-traffic area and adhere to it when someone is visibly too drunk.

Insurance: Liquor liability insurance protects against financial losses in case a customer has an accident or damages property after drinking alcohol at your restaurant.

Restaurant Cleanliness

The last thing any restaurant owner wants is a poor grade from the health inspector. Follow your state’s FDA guidelines to keep your establishment in tip-top shape, from the kitchen to the host stand.

Back-of-House: Inspectors will search for any food storage, spoilage and cross-contamination violations mentioned above, as well as an unclean kitchen. Keep surfaces, floors and equipment sparkling, instruct chefs to clean their workspace as they go and wash all dishes thoroughly. Good personal hygiene among your staff is also critical.

Front-of-House: Disinfect floors, tables and chairs not only on a nightly basis, but throughout the day. Each customer who walks in should have a clean space to dine. Maintain a comfortable temperature and ensure indoor and outdoor walkways are clear and clutter-free to avoid trips, falls and fire hazards.


The Digital Age brings its own set of risks for restaurant owners, and no point-of-sale device is immune to hacking or cyber theft. Safeguard your customers and business by installing strong antivirus software, implementing two-factor authentication for your POS system and only giving the Wi-Fi password to paying customers.

Additionally, security cameras are a great tool for keeping both your customers and employees in check. They can help deter theft, robbery, violence and other criminal activity, and also provide legal proof if any incidents arise.

Restaurant ownership isn’t easy but giving your community a go-to place to dine, socialize and relax is worth it — as long as you have adequate safety and cleanliness protocol in place. If your entire staff is adept in best practices for food, alcohol, equipment and cleanliness, the bulk of these risks likely won’t be an issue.

However, no number of inspections, licenses or training can prepare you for the unexpected. It’s always smart to ask a trusted broker for insurance advice in the event of mishaps. The experts at Lovitt & Touché are here to help you find the best risk-management strategies for your business. Explore our full suite of industry-specific solutions for restaurants.