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The Rough Notes Company Inc.



June 26
07:56 2020


Locations sitting idle still face risks

By Lori Widmer

With the current upheaval happening in the restaurant and bar industry, risk management inspections have become increasingly critical. Even restaurants currently sitting idle are facing risks.

CEO Lawrence Watson and Patrick Schneider, president and subject matter expert, respectively, of Adaptive Risk Management Services, say shutdown orders had the industry winding down their in-house operations or closing entirely. But how can a risk management inspection help, particularly in a pandemic situation?

“A lot can go wrong,” says Watson. “Did an employee move combustibles next to the hot water heater? Was the oil drained from the deep fryer? Was the freezer properly maintained? Do you know if it ran continuously or if there is spoilage? How many pest control visits have been missed? Also, multi-location owners must rely on how experienced their managers are. Traditional loss control has not prepared businesses for an experience like this.”

So how are these issues addressed?

“Our approach is education,” says Watson. “Self-inspections by the insureds are mini courses in risks and hazards. They see their operations in a different light. For this current situation, we can offer a pre-opening inspection to our clients and hopefully avoid claims by alerting the operators to areas where losses are most likely to occur.

What areas are addressed in the inspection?

“ARMSVision self-inspections handle the visible aspects of the operation as well as some of the ‘invisible,’” says Schneider. “All major systems are inspected to ensure that no damage, malfunctions or adverse conditions have occurred during the shutdown or while the employees were preparing the location to close. A guided walkthrough of the facility is conducted, and the known and anticipated causes of loss are addressed.

“The ‘invisible’ areas that may have escaped inspection are also brought to the attention of the owner/operator,” he continues. “Think about this for a minute. You closed your restaurant in March when the weather was cold or chilly and you are now reopening two months later when it is warmer and possibly more humid. During this period, several generations of insects/vermin may have made your restaurant their permanent home. Since the pest elimination service was not deemed essential and your location was closed, you may have several thousand hungry mouths waiting to reveal themselves on a busy night when a ceiling tile collapses in your dining room. Pests/insect droppings cause disease and foodborne illnesses, and if they are not addressed quickly you become the new Typhoid Mary.”

Can anything help during the current pandemic?

“Vigilance,” Watson says. “Many operators/owners had to completely shut down the location and walked away. They have their livelihoods and the future of their employees to worry about. The mechanics of resuming operations may not have been on their minds. Some may not have visited the location to conduct preventative checkups to ensure that nothing has gone wrong since.

“Others have used the opportunity to perform maintenance on the property, spruce up the place and possibly install some new furniture and fixtures. The fact that they were at the location during the shutdown should prevent most unwelcome surprises. On site, they may have realized a pipe was dripping, some mouse droppings had accumulated in the corner of the kitchen or how that water heater was acting funny.” 

What else should agents and brokers know about risk management inspections?

“View a self-inspection as an educational process to prevent loss and not as a burden,” says Schneider. “Your location has been closed for weeks or months and hazards have likely developed. Take the time to conduct the self-inspection so that you are not blindsided by a loss that you could have prevented. Don’t sideline yourself because of a completely preventable fire or burst pipe.”

“We want you open, we want you profitable and we want you safe,” adds Watson. “With that said, we also want your customers to be safe. Dining at your establishment should be memorable because of the food, atmosphere, and distinct charm and not because of the emergency room visit for food poisoning or smoke inhalation. Performing the inspection will take a few minutes out of your day. It may save you from potentially closing in the future and spending hours filling out claim forms.”

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The author

Lori Widmer is a Philadelphia-based writer and editor who specializes in insurance and risk management.

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