The costs of litigated claims are on the rise, and restaurants across the U.S. are experiencing a significant increase in large claims. This trend is pushing restaurant owners and operators to reevaluate their safety and claims management strategies to protect their businesses.
The surge in settlements and verdicts stems from various factors, including rising medical costs, evolving jury attitudes, third-party litigation funding, aggressive legal advertising, and shifting social sentiments. Additionally, inefficient claims management and lack of proactive safety measures often contribute to excessive payouts.
To mitigate risk and ensure restaurant safety, operators must establish effective risk management and claims mitigation strategies. Collaboration among management, employees, insurance carriers, and legal teams is essential from the moment an incident occurs.
Poor evidence handling, failure to investigate incidents, and inadequate witness interviews often give plaintiffs an advantage in pursuing large claims. Beyond financial costs, mismanaged claims can harm a restaurant’s reputation and disrupt operations.
Here are three key steps to improve restaurant safety and reduce claim exposure:
1. Establish a Comprehensive Incident Reporting and Investigation Process
Having clear internal procedures for risk management and incident response is crucial. A well-defined process ensures that accidents are promptly reported and properly investigated. This helps injured parties receive immediate medical attention and prevents fraudulent claims. Additionally, early reporting allows for accurate witness statements and proper evidence preservation.
When investigating incidents, focus on gathering facts rather than assigning blame. Maintain organized records of all documentation and evidence, ensuring they are easily accessible while adhering to legal evidence standards.
2. Conduct Thorough and Empathetic Interviews
Effective interviews play a vital role in gathering accurate information after an incident. When speaking to employees, witnesses, or injured individuals, remain neutral and avoid leading questions. Open-ended inquiries such as “What did you see?” or “Where were you at the time of the incident?” encourage honest and detailed responses.
Conduct interviews with empathy to make individuals feel comfortable when recounting potentially traumatic events. Review statements carefully, and when appropriate, have them signed to ensure accuracy and reliability.
3. Promptly Report Claims and Foster Collaboration
Timely claim reporting is essential for efficient management and resolution. Restaurant owners should notify insurance carriers as soon as an incident is determined to be escalated to a claim to ensure proper handling.
Collaboration among all involved parties—including restaurant management, insurance brokers, claims adjusters, and legal counsel—is key to an effective defense strategy.
By continuously refining safety protocols, training employees, and addressing potential risks, restaurants can create a safer environment while minimizing legal exposure.
Conclusion
Restaurant owners must be proactive in addressing safety and liability concerns. Implementing strong incident response protocols, conducting thorough investigations, and learning from past cases are essential steps to safeguarding a business. By prioritizing safety and effective claims management, restaurants can mitigate financial risks and enhance their reputation in the industry.