As anyone reading this latest issue of Hospitality Business can see New Zealand’s hospitality industry is in fine health and the public has more world-class dining, drinking and entertainment options than ever before.
However for most owners and operators of hospitality businesses, their line of work represents risky investment, long hours at the coalface, numerous staffing issues, health and safety requirements and not least the new regulatory challenges.
Many of our clients report feeling increasing pressure from new legislation around health and safety and at local levels by the rigorous enforcement of the Liquor Licensing Act.
The new legal framework for hospitality outlets has added an entire new layer of issues that can affect the success of a bar or restaurant.
The risks of being taken to court or penalised by Worksafe officials, police, licensing officers, disgruntled staff or customers have increased dramatically and the Health and Safety Reform Act will extend those risks far beyond the kitchen or bar and into the back office.
As with any other business, these risks need to be managed and owners can protect themselves through robust procedures and proper insurance.
The police believe that bars play a crucial role in alcohol related offences and have made no secret of their desire to reduce trading hours. We have noticed a significant clampdown by police, who in some cases post four or five officers in one bar for considerable periods to monitor alcohol consumption.
Unfortunately, assessing people’s behavior and level of intoxication is difficult, unquantifiable and discretionary.
Breaches of the Liquor Licensing Act are difficult to avoid and the consequences can be dire; from warnings to fines for the business or the staff members; even closing the bar down for 48 hours over a weekend.
The last scenario could cost the owners tens of thousands of dollars and may happen despite the best procedures and staff training.
Hospitality businesses can cover themselves through Statutory Liability insurance for an unintentional or unexpected breach. If the shutdown is the result of an insured statutory breach, the subsequent loss of income incurred during the forced shut down may be covered by having Liability Consequential Loss included in your liability insurance programme.
Most basic insurance packages in the hospitality sector will cover you for Public Liability, Statutory Liability, Employers Liability, Legal Defense Costs and Liability Consequential Loss.
Any hospitality outlet that does not have these basics covered should get moving, especially with the Health and Safety Reform Act so close.
It is well documented that the impending legislation could open up a whole new can of worms for owners, managers and directors. Not being on site is no longer an excuse.
To manage those risks, directors and management need to re-examine their procedures, their safety hazards and staff training.
Many of our clients have extended their cover further to include Directors & Officers Liability, Employment Disputes, Fidelity and Internet Liability under a Management Liability package.
A thorough check of legal risks and associated insurance options might be a worthwhile exercise, even for the busiest hospitality owner.