Hospitality businesses caught by regulatory risk

While many in the hospitality industry are living their dream of running their own café or restaurant, they should be wary of the regulations that allow them to operate.

In recent months, the hospitality industry’s regulatory landscape has drastically changed.

From superannuation hikes to changes to the annualised wage arrangements for hospitality workers, these changes are designed to better represent hospitality employees across the sector.

For many across the hospitality industry, these changes are a positive step forward. However, they do increase the risk for small business owners, who are now dealing with increased liability if things get missed.

This article will explain these risks in detail and show how small business owners in the hospitality sector could be protected by Management Liability (ML) insurance.

Know when you’re responsible as a business owner

There have been countless examples of small hospitality businesses breaching the regulations that govern them.

From Darwin workers being back-paid nearly $400k to a Queensland bakery failing to act on a compliance notice and similar offences by a Barossa Valley pizza operator – hospitality business owners are getting into trouble across the country.

The scrutiny is only ramping up, with the Fair Work Ombudsman pledging to check hospitality businesses, recently making surprise inspections to restaurants and cafes in Melbourne.

While these are isolated incidents, it shows employers must be vigilant to meet their obligations. There is no guarantee that a technicality or lax accounting won’t land you in an expensive and stressful legal proceeding.

What a Management Liability policy can cover

It’s important for small business owners to consider what safeguards are in place if a claim is made against them.

A Management Liability* policy is designed to cover a variety of situations that could occur when running your business, including OH&S issues, unfair dismissal, sexual harassment, and defamation.

ML policies can also be tailored to your business needs depending on the risks you face.

For example, you could get Employment Practices Liability* to cover you from claims made by employees about their employment conditions or breaches of employment laws.

Generally, ML policies are designed to cover the damages and claimant costs awarded against the insured business and legal, defence and claims investigation costs. It also covers some civil fines and penalties.

With hospitality businesses facing hefty penalties, there is a need to protect your business. Many will find that it’s not worth risking their business over some regulatory mistakes.