A smarter way to manage workplace injury liability

Sarah Tupper

Ask most restaurant owners about employee injuries, and they immediately think of their workers’ compensation coverage. However, as important as this is, there’s more to your risk management program than an insurance policy. An integrated program of affordable workers’ compensation insurance and an effective, ongoing risk management program will stabilize (and perhaps even lower) your rates, protect your workers and help you sleep a little easier at night.

Workers’ compensation insurance

Although many restaurant owners view workers’ compensation insurance purely as an expense, it’s still the main remedy for injuries or incidents that occur in your restaurant as well as a linchpin in your risk management program.

Here are a few quick points to make your coverage more cost-effective:

• Cover every employee for every job performed: Your workers may perform multiple roles, so coverage should be specified for each of these class codes, along with the percentage of time typically spent on each.

• Insure the owner: If the restaurant had to run without you, it could incur significant losses.

• Understand the basis for your workers’ compensation rates: Rates are based on loss history and regulated by each state. They are raised or lowered based on your safety performance over a three-year period – and that’s why a proactive risk management program is so important.

• Look for ways to save money on premiums: Yes, you can save money on your premiums, and a combination of safety programs and shopping for the right carrier can make a big difference in your costs.

Workplace safety and risk management

Workplace safety is a huge issue, both in terms of worker safety and cost to employers. Nationally, more than 3 million workplace injuries occur each year, costing U.S. businesses nearly $250 billion annually. And, as you well know, restaurants typically fall into one of the highest incidence categories.

Apart from the significant impact on injured employees and their families, the tip of the expense iceberg is the upfront costs, such as your workers’ compensation premiums, deductibles and fees. However, the indirect follow-on costs associated with the claims can be an additional 4-8 times the direct upfront costs. These indirect costs may include lost production on the part of the injured worker, as well as coworkers and supervisors; interruption of operations; cost of training another employee to backfill temporarily; overtime costs; damage to equipment or facility and potential liability.

Typical concerns in restaurants include:

• Slips/trips: Whether caused by spills, wet floors, clutter, poor lighting or just plain rushing, many slips, trips and falls are eminently avoidable.

• Cuts and lacerations: Many chefs and sous chefs suffer frequent cuts, but don’t bother to use cut gloves, and that example extends to line workers.

• Improper lifting: Reaching for heavy supplies on high shelves may lead to painful consequences.

Solutions are often relatively simple, but should be planned in the context of an ongoing risk management program. When establishing or improving your safety program, it’s important to reflect your restaurant’s culture and workplace characteristics and to seek guidance from professionals who can help develop the right program for your operations.

The first steps to lower injury rates—and, by extension, lower workers’ compensation insurance rates—include identifying and resolving the immediate causes of your most frequently experienced injuries:

• For slips and falls, solutions will include slip-resistant footwear, removal of clutter, improvement of lighting and maintenance of safe floors.

• For cuts and lacerations, getting kitchen staff to wear cut gloves will greatly reduce injuries.

• Moving heavy storage items to lower shelves will solve many improper lifting injuries.

The most important elements, though, are communicating, training, coaching and reinforcing safe practices. Bear in mind that this isn’t a “one and done” solution: managers at all levels need to follow safe practices and continue to reinforce them with staff, particularly in light of the 200-300 percent turnover rate in restaurants.

Studies by insurance carriers indicate that an investment in proactive workplace safety processes can yield a return on investment of $6.15 for every $1 spent. Add that to lower workers’ compensation rates based on a better safety record, and that’s an investment most restaurant owners would gladly make.

Sarah Tupper is v.p. of direct sales at FrankCrum, a national professional employer organization.