Tuesday, April 22, 2014

Managing Your Liquor Liability Exposures

According to the National Highway Traffic Safety Administration (NHTSA), in 2012, over 10,000 vehicle-related fatalities involved a drunk driver. Not only were these people liable for their actions, the establishments where they were drinking are also susceptible to punishment for over-serving clientele who then injure a third party.

These types of lawsuits are not cheap, either. Well-known liquor liability cases include the Outback Steakhouse, which was ordered to pay $39 million by an Indiana jury after a patron of the restaurant chain struck the plaintiff with his car, and T.G.I. Friday’s, which was ordered to pay $1 million to the parents of two 16-year-old teenagers who were killed after being involved in an accident with a drunk driver. Witnesses in the case claimed that the patron at T.G.I. Friday’s was drinking for eight hours at the establishment before the accident occurred.

These cases are not isolated incidents—victims and their families file suits against restaurants or bars every day for their role in serving a customer who is then involved in an alcohol-related accident. To help protect your establishment, employees and patrons, establishing a liquor liability prevention policy, training workers and transferring risk are critical to minimizing your liquor liability.

Prevention through Education

The most important defense against being liable for drunken driving accidents is prevention through education. It is imperative that you design a liquor liability training program for staff members who will serve alcoholic beverages to customers. In these training sessions, employees will learn important information such as how to determine if someone has had too much to drink, how to deny a patron service and how to identify valid forms of identification to prevent serving alcohol to minors. Once an employee has completed the training, he or she should sign an agreement form outlining that they comply with and understand the policies set forth by the establishment.

Specifically, training should include the following:
  • Signs of Intoxication
  • Monitoring Consumption
  • Offering Continued Service
  • Denying Service
  •  Reporting Incidents
  • Employee Legal Consequences
As part of your initiative to lessen risks, educate employees on how drunken patrons may affect their lives. Employees must understand how serving to minors who use fake IDs will result in large fines or how dram shop laws are stricter than ever and breaking them may pose serious consequences. Remind employees that they are liable and could a face a number of consequences for not cutting off patrons before they’ve had too much to drink. Types of employee liability include:

  • Criminal Liability: Employees can be found criminally liable for serving to minors with a fake ID or serving to a patron who appears intoxicated. The employee can face monetary fines, probation or jail time depending on state laws. In addition, your establishment can lose its liquor license and is susceptible to fines as well as higher insurance premiums.

  • Civil Liability: If employees are found guilty of civil liability for a patron’s injury, that employee, the owner and the establishment face large monetary fines. At times, these fines are so large that they cause bankruptcy.

  • Dram Shop Laws: These laws allow establishments, owners and employees to be sued by an individual after they’ve been injured by a patron served at the establishment.

Transferring Your Risks

To protect your business, it is wise to obtain a liquor liability policy either as standalone coverage or as part of a restaurant and bar package policy. Contact Naught-Naught Agency at 573-634-2727 for more information about these effective coverage options. We understand carrier requirements and the state’s dram laws to design a policy that suits you best.


These were the most frequently cited OSHA standards for the food services and drinking places industry last year:

  1. Hazard communication – Properly transmitting information on chemical hazards through a comprehensive program, container labeling, SDS and training.
  1. General Personal Protective Equipment Requirements – Selecting the correct PPE, providing instruction, monitoring its use and maintaining the PPE to standards.
  1. Wiring Methods, Components and Equipment for General Use – Using proper wiring techniques and equipment to ensure safe electrical continuity.
  1. General Electrical Requirements – Ensuring electric equipment is free from recognized hazards likely to cause death or serous physical harm to employees.
  1. General Requirements for Walking/Working Surfaces – Housekeeping guidelines.
  1. Maintenance, Safeguards and Operational Features for Exit Routes - Exit routes must be kept free of explosive or highly flammable furnishings or other decorations.
  1. Portable Fire Extinguishers - Placement, use, maintenance and testing of portable fire extinguishers provided for the use of employees.
  1. Medical Services and First Aid - Ensuring the ready availability of medical personnel and first aid supplies on-site.
  1. Guarding Floor and Wall Openings and Holes - Ensuring every stairway floor opening has proper railings and other protection.
  1. General Requirements for All Machines - Providing proper machine guarding to protect the operator and other employees from hazards.

Security Protects Against Business Interruption

Restaurants can be easy targets for thieves. Dim lighting, high traffic and a fast-paced environment mean restaurant workers have trouble detecting and preventing theft. Fortunately, there are ways to improve security at your restaurant and avoid potential business interruptions.

Building Exterior Security

Keeping your restaurant safe begins on the outside. Consider the following measures to keep your building secure.
  • Lighting – It may seem simple, but lighting can have a big effect on building security, as criminals prefer to target places where their actions can easily be concealed by darkness. Make sure entrance ways, walking paths and parking lots are adequately lit. Motion-detecting lights are also helpful by doors that are not often used.
  • Locks – Again, a simple security measure that is also essential. Front doors should always be locked during non-business hours. Any back doors that are used for emptying garbage or employee breaks should remain locked at all times. If a back door is used frequently, install a key card entry system on the door. With this method, lock the door and turn the system off after business hours to further increase security.After locks are installed, they must be checked regularly to ensure they stay in working order. Also, keep an eye on the condition of doors. If they fall into disrepair, their effectiveness as a method of protection will be weakened.
  • Landscaping – A well-landscaped property can improve security at your restaurant in several ways. First, a well-maintained property gives the impression that the premise is under the supervision of attentive management, so show your presence by keeping the grounds well groomed. Second, just like poor lighting, an overgrowth of bushes and trees may create blind spots that can be used to conceal criminal activity. When choosing plants to be placed around windows and doors, pick ones that will remain relatively short, and trim them regularly.
  • Security cameras or on-site security personnel – Deciding to employ security guards or install security cameras depends on the individual situation. Often,, such measures are not needed on the building’s exterior to provide the reasonable amount of security required of restaurant owners, but they can be beneficial in situations where a specific security concern may need extra attention. If the property is located in a high-crime area, security cameras or on-site personnel may be necessary.
  • Steel bars/bulletproof glass – Steel bars and bulletproof glass can be important security additions to your restaurant’s windows, and are helpful if your restaurant has a drive-thru.

Building Interior Security

If a thief gains entry to the restaurant despite the exterior security measures, there are ways to deter the person once he or she is inside.
  • Alarm system – Install an alarm system that is monitored by a licensed security company. If there is a break-in, they will be notified and can dispatch the police to the restaurant to investigate. Make sure it is loud when triggered and is located where a thief can easily spot it.
  • Safes – Frequently deposit cash into a damage-resistant safe during hours of operation. Keep the safe out of sight and ensure only high-level employees know its location. Never leave the keys or code for the safe lying around. Safes that can only be opened at certain times add extra security.
  • Varying banking procedures – Thieves pay close attention to the routines of workers, so it’s important to change up how the restaurant does sensitive tasks such as banking and other cash handling activities. In this case, not having a routine is a positive thing.
  • Physical inventories – Either hire an outside company to perform physical inventories regularly or perform them in-house. If thieves see you physically counting merchandise, they are less likely to steal it.
  • Data security – Identity theft is a growing trend in restaurants. Thieves can place credit card skimming devices on point-of-sale (POS) terminals and collect a customer’s credit card information when the card is swiped by an employee. Employees that handle customer credit cards should be trained to detect any abnormal devices in and around POS terminals.
  • Never opening or closing alone – Make sure there is always more than one person opening or closing the restaurant. Before closing, check bathrooms and other areas where a person could hide to ensure thieves aren’t staying behind after hours.
  • CCTV – Install a closed circuit television (CCTV) system that is easily visible for both employees and customers. If thieves know they’re being watched, they are unlikely to steal from the restaurant. Make sure the video equipment is locked safely in a room at all times.

Don’t Take Anything for Granted

It doesn’t matter if your restaurant is big or small—thieves will take advantage if you have lax security measures. In addition to these various security measures, training employees on how to spot potential thieves will go a long way to maintaining a successful restaurant.

Working with Cash

Helpful tips for handling money on the job

Having cash on hand creates a significant risk for any business, and it’s important for you to understand how to safely handle cash that you are responsible for.

Cash Drawers
When using a cash drawer:
·       Open it only when making a transaction.
·       Close the drawer before you package merchandise the customer may have purchased.
·       Leave the bills the customer gave you on top of the drawer until after making change to keep a record of what the customer paid in case of dispute.
·       Never leave an open cash drawer unattended for any length of time.
·       Notify your supervisor when you build up excess cash in your drawer so it can be moved to a more secure location.
·       Never count cash drawers in front of customers. Always count the contents of the drawer in a secure, private area.
·       Always lock the cash drawer and remove the key when it is not in use.
·       If the premises will be unattended overnight, empty the cash drawer and leave it open to deter damage in the event of a break-in.

Bank Drops
There may be a time when you will have to bring cash to the bank on behalf of . Remember these tips while moving cash:
·       Never establish a routine for deposits. Vary the time and the route you take as much as possible.
·       Always try to take someone with you. Go by yourself only as a last resort.
·       Alert someone that you are leaving with the deposit and also tell them when you should be returning.
·       Transport cash in something that doesn’t draw attention to you. If you are using a bank bag or similar container, always put it in something unidentifiable.
·       Do not use public transportation.
·       If taking a taxi, use a reputable company, and always call for it by phone instead of flagging one down once you’ve reached the street.
·       If walking, choose busy streets that will keep you close by people.
·       Do not make other stops before the deposit.

Even when employees take all the proper precautions, there is still chance for a robbery. If such a robbery occurs while you are at work, remember:
·       Try to remain as calm as possible.
·       Comply with the robber’s instructions.
·       Give them any money or goods that they ask for.
·       Make mental notes about the robber’s appearance so you can inform police.
·       Never attempt to physically stop an armed robber.
Remember that no amount of money is worth a life.