On July 13, 2019 at approximately 7 PM EDT, the West Side of Manhattan in New York City experienced an unexpected power failure that lasted about five hours before power was fully restored. This power failure affected more than 73,000 customers. The power outage occurred on the 42nd anniversary of the 1977 blackout in New York City which left upwards of nine million customers without power. The more recent event was found to be caused by an electric generator or transformer fire that originated at a substation.
How Blackouts Increase Liability For Restaurants
The blackout affected everyone in the vicinity, including local restaurants. Many businesses are not prepared for when a power outage occurs and have few to no safeguards in place to prevent a cease in operations when it does happen. Restaurants are especially affected by blackouts as losing power could mean the loss of inventory and operations. It is important for restaurants to be aware of the effect of an extended power outage. Even just a few hours of no power can result in thousands of dollars in damages. Here are just a few potential liabilities that restaurants face in a blackout.
Food spoilage goes beyond having to throw out a few hundred dollars’ worth of food. When the power goes out and you lose food due to spoilage, you lose the ingredients you need to make a bulk of your dishes. This in turn affects your operations as you try to get by on a limited menu, leaving customers unsatisfied. Unhappy customers may turn to social media to release their frustrations, putting your restaurant in a negative light. Without protection from restaurant insurance, a restaurant is at risk for various expenses like loss of food, loss of profits, and potential legal fees.
Food is expensive, especially if your restaurant purchases quality ingredients like organic fruits and vegetables. Replacing loss inventory can cost hundreds to thousands of dollars. If you are not financially able to replace your inventory immediately, you may be forced to close down your restaurant until further notice. This can put a further strain on your finances and you may need to shut down permanently. When you are protected by restaurant insurance, you can maintain the peace of mind that your inventory can be replaced if a covered event like a widespread blackout causes a loss of your inventory.
Some restaurants that do not have protection from restaurant insurance may knowingly or unknowingly serve food that was not properly stored due to loss of power. If the food was truly spoiled or contains bacteria from poor storage conditions, the customers who consumed these foods could experience food-borne illnesses like food poisoning. If a customer decided to sue you due to their illness, you could be found liable for any damages. A restaurant insurance policy like product liability insurance can provide restaurant owners with the level of protection they need to safeguard against such incidents.
A blackout that occurs during normal restaurant hours can also result in problems that have nothing to do with food. If a restaurant does not have a generator, the eatery will likely be dark, making it difficult to navigate. If an employee or patron accidentally trips on something or becomes injured because they are not able to see or navigate during a power outage, you may be found responsible for any damages that occur. Fortunately, restaurant insurance can cover these types of problems too. A general liability insurance policy can protect against such cases of personal injury.
The Importance Of Acquiring Restaurant Insurance
Restaurant insurance is important for all restaurants as it protects restaurant owners against these types of liabilities and prevents financial loss and serious legal ramifications. While power outages are a major concern, they are not the only event covered by restaurant insurance. Dangers in the kitchen, slip and fall accidents, and various other common restaurant dangers could put your business at risk. Restaurant insurance is designed to protect against these risks while helping business owners better manage financial situations that could occur and potentially wreak havoc on their operations.
What types of businesses could benefit from restaurant insurance? Nearly any business that serves food and/or drink, including bars, taverns, diners, cafes, coffee shops, delis, lounges, food delivery services, fast food franchises, pizzerias, bakeries, sandwich shops, and similar establishments. While each restaurant is exposed to unique risks, a comprehensive restaurant insurance policy can cover most common restaurant hazards. While policies can range widely, most restaurants can benefit from having a business owner’s policy, workers’ compensation, general liability, and a commercial auto policy.
Contact A Restaurant Insurance Broker To Learn More
No matter the size of your restaurant or how long you have been in business, having the right insurance protecting your interests can be invaluable. For more information about restaurant insurance or to learn how you can acquire a policy, contact the restaurant insurance brokers at MFE Insurance.