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  • P.O. Box 121 Surry Hills NSW 2010 Australia
  • 1300722878

Cover your own back

Australia is the second most litigious country in the world, behind only the USA. That’s why it’s never been more important for restaurant and catering businesses to have the right insurance program in place.

The sad fact is that a simple act, error or omission in managing your business can leave you open to litigation. Should this happen, the focus switches firmly on the conduct of the company and its management.

Even if you think a claim made against you has no basis or merit, it will still cost time and money to defend yourself. And if the claim goes against you, significant financial losses could ensue.

Management liability insurance offers great protection against a range of insurable events and could make the difference between maintaining your annual profits – and even staying in business.

Think we’re over-egging the pudding? Think again. The following case studies from Arthur J. Gallagher Insurance Brokers could happen to any restaurant and catering business and show the real value of having management liability insurance cover in place.

CASE STUDY 1 – MISAPPROPRIATION OF FUNDS

Over a period of three years, an employee accountant of a restaurant who had access to payroll and the trust account misappropriated over $100,000 from the trust account. The theft was detected and reported to the police. The police however could only prove that the employee stole $15,000.

Outcome

Under the policy, the Insured engaged a loss assessor who could prove a direct financial loss of $105,000 (greater than the amount initially calculated by the Insured). The claim was covered by the policy and settled for $105,000.

CASE STUDY 2 – OCCUPATIONAL HEALTH & SAFETY

An apprentice chef, whilst preparing the dinner service, suffered a severe injury when he sliced his hand. A full Occupational Health & Safety investigation began against the business, which led to the company being prosecuted for failing to provide adequate training and supervision to the apprentice.

Outcome

The company was fined $25,000 and incurred $20,000 in defence costs, all of which was covered by the policy.

CASE STUDY 3 – BULLYING & HARASSMENT

A claim was made by four former restaurant staff against certain directors, managers and supervisors of the insured restaurant for bullying, harassment, abuse and sexual harassment. Claims were made against the restaurant alleging failure to respond to the bullying and harassment. Employees’ claimed combined compensation of $200,000.

Outcome

After protracted litigation, the matter settled for $20,000 per claimant. In addition to this, the company incurred over $150,000 in defence costs associated with this Claim. The settlement and defence costs were covered by the policy.


Arthur J. Gallagher is the endorsed insurance broker of Restaurant & Catering Australia. They have developed a Management Liability insurance product that’s a great fit for the restaurant and catering sector. Get a quote for your business, or read more case studies here.