Restaurant Workers Compensation Insurance
Summer is the time to load up on food that’s best consumed outdoors in locations that are sometimes off-limits the rest of the year – think hotdogs at a ballpark or ice-cream on a scoop shop’s patio. However, while some restaurants might see a spike in customers during these months, they also face increased workers’ comp-related risks.
June, July, and August see the highest reported restaurant workers’ comp accidents, according to AmTrust Financial Services’ “Restaurant Risk Report.” Between Memorial Day and Labor Day, the workforce of this industry almost doubles, and inexperienced or newly hired seasonal workers are more likely to be injured than those who have held their positions for a longer period of time.
Matthew Zender, senior vice president and workers’ compensation product manager at AmTrust, delved deeper into the reasons why restaurants often bear a heavier workers’ comp burden in the warmer months.
“If you’re bringing somebody in and they’re only working for you from June to August, they’re not going to be as familiar with the operation, and they also don’t have as much loyalty toward the firm,” he explained. “In the event that they have a somewhat minor claim, if that had happened and they were going to be working all year long, maybe that injury works itself out. If it happens when you’re toward the end of your seasonal term, you might be more likely to report that claim.”
The seasonality of certain businesses can affect the proportion of workers’ comp claims seen during this time of the year versus other times, which makes sense. After all, payroll is going to be up because revenues are also up for many restaurants. Yet AmTrust’s book of business in this sector reveals that the proportion of claims to payroll is higher in the summer because of the added exposures.
There are other unique qualities of the restaurant segment that impact claims experiences. According to AmTrust’s report, an injured employee will, on average, take 30 days to return to work in the restaurant industry, with injuries to wrists and hands causing the most lost time at 265 days of lost work.
“The length of time that a worker is going to be out does tend to vary based on the nature of what that person was doing. If they’re working in a tip income business, they tend to have a high motivation to return to work. If they’re working in a job that does not involve tips, they tend to be out longer,” said Zender.
The report also found that cafes and coffee shops yield the highest lost time by 45% when compared to all other restaurant types. Tight quarters and sudden influxes of coffee addicts are partly to blame.
“One of the things that tends to drive [claims in] coffee shops is a function of concentration, both of space, because they tend to be working in some confined spaces, and also concentration of business, since they tend to be very busy for concentrated periods of time,” said Zender. “If you wanted to go buy a cup of coffee at 11:45 in the morning, you’re probably walking to the front of the line in many places, but if you want to buy one at 7:40 in the morning, you might be waiting in a line. That concentration leads to a very fast pace, and when you’re working that quickly, you’re going to sometimes make careless mistakes, and those mistakes in some cases lead to claims.”
Those experiences don’t mean that AmTrust avoids writing coffee shops. In fact, the company is one of the largest writers of restaurants in the United States, which mean its team has ample restaurant expertise.
“In California, we write one out of every eight payroll dollars of restaurants,” said Zender. “We really try and focus on this business, and think about the needs of restaurant owners. We meet with a number of different companies that offer different tools, and whether it’s non-slip pads or non-cut gloves, we’re always paying attention to the new, great products that we can [offer to] restaurant businesses.
“Our loss control [services are] a big part of [our resources], but we also work to make sure that we have competitive rates so that the businesses aren’t paying more than they need to, and we work to make sure that we have payment solutions that are conducive for a restaurant owner, making it cash-flow friendly for them.”
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