Is your hospitality business providing “reasonable care” to your customers and your bottom line?

Published on Tue, 04/07/2015 - 23:39
hospitality business

When customers walk through the front door of your business, they have certain expectations that they’ll be safe from hazards, and as a business owner, you have a legal duty to provide a certain standard of “reasonable care” to protect them.

If you’re in an especially customer-focused industry like hospitality, those expectations are even higher. Whether you operate a hotel, restaurant, bar, or other similar hospitality business, your customers expect a certain level of pampering, so the duty to provide reasonable care is even more crucial.

What does “reasonable care” mean?

Basically, the law defines “reasonable care” as the amount of care that a reasonably prudent person would use in a similar situation. That means using all of your skills and experience to operate your facility in a manner that would be consistent with that of a reasonable hospitality manager in similar circumstances. That doesn’t mean you’re required to absolutely ensure your guests’ safety, and you won’t generally be held liable for events you can’t reasonably foresee, but you’re still required to act prudently and use reasonable care to fulfill your duties of care.

Sometimes that duty is fairly straightforward, such as a restaurant’s duty to serve food that’s safe for consumption or a hotel owner’s duty to keep the premises in a “reasonably” safe condition to protect the guests. But it’s rarely cut and dry, and depending on your business, your duty to provide reasonable care could cover a lot of ground:

  1. Providing a reasonably safe premise including all public spaces, the interior of guestrooms, dining rooms, and all outside spaces that make up the total physical facility.
  2. Serving food and beverages that are fit for consumption. This duty of care also extends to selecting quality suppliers, as well as the techniques used by an operator to prepare and serve food or beverages.
  3. Serving alcoholic beverages responsibly. Servers must avoid acts that could cause harm to others (both the person served and other patrons). This includes serving alcohol to minors or to those who are already visibly intoxicated.
  4. Hiring and properly training employees. This protects you against charges of negligent hiring or training, and terminating employees who pose a danger to other employees or customers protects you from charges of negligent retention and other potential liabilities.
  5. Warning of unsafe conditions. When you become aware – or should be aware – of conditions that pose a threat to your customers’ safety such as a wet floor or damaged walkway, you have a duty to make those conditions obvious to your customers.
  6. Safeguarding guests’ property and private information. If you offer valet parking, coat checks, or offer to hold guests’ valuables in a company safe, you have to exercise a duty of care to protect their property. Similarly, you need to have procedures in place to protect your guests’ confidential information such as credit card numbers.

The doctrine of reasonable care puts an enormous burden on you as a hospitality manager. If one of your customers gets injured, loses valuables, or has personal information compromised, the question of whether “reasonable care” was used is perfect fodder for a lawsuit – and the resulting legal costs, increased insurance premiums, and damage to your reputation can put a serious dent in your bottom line.

Ready to learn more?

For more information about your duties to provide reasonable care to your customers, contact us to talk to the experts at Heffernan Insurance Brokers and review your business insurance coverage needs today.

With more than 20 years of experience with restaurants, hotels, caterers, bars, and similar industries, Heffernan’s Hospitality Insurance Practice is a partner you can count on.