Food service risk management
Ingredients for success
By Mark Gaskamp, CIC, CRM, CPCU, ARM
The restaurant industry is the largest single private employer in the United States with more than 12 million workers
manning 925,000 locations across the country. Food service is a vital component of our economy and a great business
opportunity for the insurance industry. So why aren’t insurance carriers lining up to insure these operations? Restaurant
operations have several inherent risk management issues, making it difficult for some carriers to step up to the plate
and offer coverage.
Restaurant operations are essentially fast-paced production facilities that employ a significant percentage of adolescent
workers. In fact, one in four food service employees is a teenager, and over half of all workers are under the age of 30.
This younger work force spawns high employee turnover. The revolving door of employment and inexperienced workers
creates significant issues related to safety education and safe work practices.
What’s more, safety and risk management issues related to food service management also give rise to concern. Have
you noticed the “general manager” nametag on the individual filling your French fries order or bussing your table at the
local fast food restaurant? The first-line management team in the restaurant industry is overburdened and actively
involved with “order to order” operational issues—more so than in any other kind of business. This combination leads to
personnel turnover, time management concerns, and injury prevention challenges.
Given the inherent problems all restaurants face, clearly they need risk management assistance. This article provides
an overview of the risks associated with food service worker injuries and offers examples of systems that have led to
successful implementation of injury prevention programs to overcome the challenges facing the restaurant industry.
1. Think operations
“Safety should be part of the business, not in addition to the business.” It is essential for restaurant establishments to
integrate safety into their operations in order to have a successful risk management program. Employee education and
operational audits (which are both part of most food service operations) are excellent opportunities for risk management
New employee orientation and continuing education should include occupation and food safety components. For
example, demonstrating how to slice tomatoes should emphasize the importance of using anti-cut gloves; showing where
produce is stored should include an explanation of proper materials handling and lifting techniques; and slip and fall
injury prevention can be integrated into cleanliness and housekeeping education initiatives. Operational audits should
include safety measures and hazard assessments. These components can easily be incorporated into store inspections
along with customer service, food quality, and store cleanliness to provide a more comprehensive evaluation of the
2. Hold store managers accountable
Accountability is important at all levels of operations and, most important, at the store manager level. These individuals
are pulled in so many different directions on a daily basis that without ongoing job performance measures, workplace
safety almost certainly will be neglected. The simplest method is to incorporate safety compliance and workplace
accident rates into annual job performance evaluations. The store manager might earn a 10% performance bonus
based on safety-related activities such as store hazard inspections, documented training, or conducting safety meetings.
More elaborate systems can be implemented depending on the size of the operation, but in all cases the goal of the
accountability system should be to encourage the desired behavior. For example, if management wants to improve
return to work rates and utilization of modified jobs, it should measure days away from work or number of lost time
injuries. The measures do not have to be restricted to injury or claim statistics. Many successful programs have created
scoring systems to provide an objective accountability measurement. The housekeeping scorecard on this page is a
good example of this type of tool. There are no rules for accountability systems; management simply determines what
behaviors it would like to influence, then devises a system that rewards those behaviors.
3. Create awareness in the trenches
Store management should not be held accountable without being given the resources to influence safe behaviors in the
workplace. Employee involvement in safety committees, regular store inspections, and providing safety posters and
handouts are just a few ways to create awareness at the line level. Regular safety meetings that encourage feedback
and a dialogue about safety can also be helpful in communicating a positive message throughout the workforce. The
construction industry has had great success in creating safety awareness by conducting short, daily “tool box” safety
meetings, which serve as a reminder that there are hazards in the workplace that need to be dealt with throughout the
day. Similar success can be achieved in the kitchen by conducting “chef safety” sessions that address specific safety
hazards and controls in the food service industry.
4. Allocate the cost of risk
Many successful multi-location restaurant operations push every operational cost—from labor to napkins—down to the
individual location in order to accurately reflect each location’s financial contribution to the overall organization. Accident
costs and associated insurance costs should also be pushed down to the local level to provide a true cost impact for the
individual location. For example, if one location of a 10-location pizza franchise comprises 90% of the claim experience,
then these costs should be assigned to this location.
Spreading these costs across all locations unfairly penalizes those locations that are addressing their safety and risk
management issues and provides little incentive for the poor performer to manage its risk. Much as the accountability
system is designed to influence behaviors of the individual store manager, the goal of the cost allocation system should
be to drive preferred behavior at the macro level throughout the organization. Successful programs allocate well beyond
the fixed insurance costs and include a measure of accidents and/or include safety activity measures such as safety
meetings, employee education, or scores on a safety audit.
5. Focus on the cause
Industry studies have shown that two key exposures drive worker injury costs for the food service industry: lifting, and
slip and fall injuries. In fact, these two causes account for more than 40% of all lost time injuries. Therefore, it is critical
that these two areas be a key focus of the injury prevention program.
Lifting should be integrated into the operational education as mentioned above and addressed as part of a
comprehensive hazard assessment of the store operations. What items over 50 pounds are lifted? What items are
stored on the floor or above the shoulders? Are hand trucks and dollies available? Slip and fall injury prevention should
include not only housekeeping and clean floors, but also proper footwear and a slip and fall assessment of the drainage
system in the dishwashing area, broken tiles, torn carpet, and elevation changes. Just a little effort focused on these two
areas can go a long way in reducing the number of injuries and controlling the associated costs.
Restaurant operations are not highly technical or complex, and addressing the risk management issues outlined above
can result in reduced cost of risk and can make the restaurant a much more attractive proposition in the insurance