How to maximize tribal restaurant insurance and minimize risks


Take advantage of your tribal restaurant insurance and take steps to mitigate your risks

As a restaurant owner, you’re well aware of the risks that you face daily. That’s why you have tribal restaurant insurance to help cover those risks, should the worst happen: a kitchen knife slip. A customer slip-and-fall in the bathroom. A broken tooth from something that shouldn’t have been included in the dish. A food poisoning incident. A fight that broke out in the bar. The list is long and quite diverse. And it begs the question: Are you insured against these incidents? And how can you minimize the damage they cause to your restaurant’s reputation and income?

Experts say that restaurants are some of the most underinsured businesses in the country. Why? Slim profit margins, competition and owners who say they can’t afford all the necessary coverages and simply cross their fingers that it won’t happen to them. We’ve listed here a few of the top risks here and how you can work to mitigate them.

Reputation risks: Assess and develop a plan

A single incident of food poisoning, or a foreign object in a dish, or a slip-and-fall, or a fight in itself shouldn’t damage your reputation or affect your tribal restaurant insurance. However, if several events happen within a short time frame, and patrons decide to complain about you on Yelp or Google, you may face declining business. Do you have a plan in place handle these incidents that includes responding on review sites and social media and making restitution to the injured customer?

Property risks: Fire safety

This is the fear that keeps restaurant owners up at night. And no wonder – open flames, spattering grease, hot equipment – all have the potential to flare up and out of control. The National Fire Protection Association says that 8,470 eateries experienced a fire in 2014 (latest statistics available), with a combined average of $165 million in property damage. Some 61 percent of those fires involved cooking equipment.
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Source: provides these basic fire prevention tips to help you minimize your fire risk:

  • Add an automatic fire suppression system to your kitchen. These systems automatically dispense fire-retardant chemicals to suppress flames, in addition to shutting down the fuel or electric supply to nearby cooking equipment.
  • Have a back-up plan with portable fire extinguishers. For fires involving grease, fats or oils that burn at high temperatures, you’ll need Class K fire extinguishers, to be used in conjunction with a built-in hood suppression system.
  • Perform regular inspections. Check your exhaust system regularly for grease build-up; if you’re using solid fuel (wood or charcoal), inspections should be monthly. Also inspect your electrical equipment, looking for frayed cords and combustible items that have mistakenly made their home near a power source.
  • Train your employees. Be sure they know how to properly use a fire extinguisher, how to extinguish different types of fires (grease vs. paper), how to store flammable liquids and to keep flammable paper items away from heat sources.
  • Have an emergency plan. Your evacuation plan should include someone to call 911, someone to help customers exit the restaurant, and someone to shut off gas and electricity to your building.


Related: It’s Fire Prevention Week – Share These Tribal Fire Safety Tips

Loss of business income: When it pays to have this tribal restaurant insurance

Unfortunately, restaurant fires aren’t all that uncommon, despite the strictest safety measures. What happens if you experience a fire…or a flood (or other specific covered causes) that shuts you down for a few months while repairs are made? In addition to the payout from your property insurance, the funds paid to you for your loss of income coverage will be instrumental in getting you back up and running again, with all the additional costs not covered by your property insurance.

Coverage for other tribal restaurant insurance risks

Risk managers strongly suggest you consider these additional coverages as well:

  • Liquor liability. Customers who get into an altercation outside on your parking lot or a patron who’s involved in an auto accident after leaving your restaurant could all sue you, whether rightly or wrongly. Your liability exposure is strong and could be quite costly.
  • Spoilage and equipment breakdown. Let’s go back to the fire-or-flood scenario, or perhaps something as simple as a motor going out on your walk-in, undetected for a couple of days, or a power outage that lasts more than a couple of days. This coverage will help you replace all your food and beverage items lost (subject to a sublimit in Arrowhead’s policy).


Workers’ benefit claims: How to lower incidents

OSHA estimates that for every dollar spent on a workers’ benefit claim, an additional $4.50 is spent on indirect costs (lost time, claims investigation costs, added administrative and training time, etc.) You’ll agree, it pays to be diligent and implement proper safety tactics, keeping your tribal restaurant insurance and workers’ benefits risks low.

What works against you? High turnover. Inexperienced help. Meal-time crunch, when everyone’s working at warp speed. And sometimes, lack of proper training and reinforcement.

Related: 6 things to think about when choosing tribal restaurant and bar insurance 

Here are a few safety tips to remember:

  • Teach staff to use verbal warnings in heavy traffic areas like “Coming through,” “Make way,” “Behind you,” or “Hot plate.”
  • Keep floors clean from spills and clear of clutter and debris.
  • Use rubber mats to prevent slips.
  • Remind staff where fire extinguishers are.
  • Never leave a flame or any heat unattended.
  • Don’t allow combustibles such as towels near an open flame.
  • Keep knives sharp; ensure staff is trained on which knives to use for what food items.
  • When moving heavy items, get help or use appropriate equipment.
  • Create a safety program; train every new employee and reinforce consistently.
  • Provide incentives (“safety awards”) for staff members who follow your safety program and prevent accidents.
  • Insist that all injuries must be reported, no matter how small. Use this information over time to find patterns or potential problems before a bigger accident occurs.
  • Investigate all claims, which can help you spot and deter fraud.

Now’s a good time to re-assess your risks and evaluate your tribal restaurant insurance, to make sure you have the coverages in place that you need to protect your restaurant’s property, contents, reputation, profits and workers.

Need help in analyzing your insurance needs? Call Brett Barnsley, Arrowhead’s Tribal Program managing director, at 509-591-5109 or email him at