How to Assess the Risks in your Hospitality Business

September 19, 2022

Hospitality businesses face many direct and indirect risks, so it’s good practice to refresh your risk management approach regularly.

So, what’s the difference between direct and indirect risks?

Identifying workplace hazards

Direct risks include hazards that are biological, legal/regulatory, global, technological, environmental, market, staffing, economic, financial, security, and property, and equipment, to name a few. You can drill down for more details here. Hazards are things or situations that could harm a person.

Indirect risks include:

When your suppliers are directly affected, so you run out of materials you need to make products or those you sell
Your customers being affected by the indirect risk, which impacts their buying patterns and, by extension, your business
An event or regulation/law affects your general location and possibly utilities, so customers can’t access your premises.

Risks could harm your business in multiple ways, including legally, financially, strategically, operationally and reputation-wise. Keep a step ahead with risk assessment and planning. However, as your Broker/Adviser, we acknowledge that during economic uncertainty, disruption, and the skills shortage, forecasting can be another hazard.

Understanding the risks those hazards pose

The Australian Government’s resources offer a great guide to assessing and planning risk management. This is a process of identifying hazards, assessing risks, minimising or controlling them through measures, then reviewing those measures. It’s not realistic to eliminate all risks.

A risk assessment gives you insights into:

How past incidents and accidents can be better managed
Risk severity, including which workers and others could be exposed
Sources and processes leading to those risks
Effectiveness of your existing control measures
What else do you need to do to minimise and control the risk
The urgency of your actions to deal with the risk.

Ensure you don’t just identify risks at one point in time, but review differences during peak and low periods as well as during special events. You might also like to benchmark your work health and safety performance against others in your industry via this Safe Work Australia website.

Implementing risk controls

Here are some typical risks in hospitality and how to control them:

Food-borne illness: ensure staff are trained in safe food handling; cook foods such as poultry, beef, pork, and eggs thoroughly before serving; abide by food use-by dates and check for changes to food’s appearance, use reputable suppliers, practice high levels of cleaning and sanitation
Alcohol-fuelled behaviour: ensure staff have and follow training in the responsible serving of alcohol; offer courtesy transport; have safety and security systems, both human, cyber, and CCTV
Kitchen fires: regularly check your fire safety equipment, including fire blankets, extinguishers, fire suppression, and sprinkler systems; routinely clean flues, oven and cooking areas; train staff about fire risks.

That’s not all. Find out more about managing these risks: Manual handling, slips, trips and falls, transferring cash safely, electrical hazards, cuts and burns, plus mental stress and fatigue.

Reviewing and maintaining control measures

Aim to be proactive about risk assessment – it’s a continuous process of assessing, adapting and improving how you operate. For example, you should review your risk control measures:

When they don’t work and someone experiences a ‘near miss’ or is injured
Before you change practices or workplace layout
Before introducing new equipment materials or work processes
When identifying a new problem
If consulting with staff and/or other stakeholders prompts you to do so
At the request of a health and safety representative.

This business.gov.au website is a helpful portal to refresh your knowledge of work health and safety laws for your state.

Insurance protection is an important part of a business’s risk management strategy. To help you understand your risk management, talk to us as your Broker/Adviser. We work across the hospitality industry, so we can share insights, including the most appropriate types of insurance to cover businesses like yours.

123 Insurance Pty Ltd ABN 67 621 727 722 T/A Bell Partners Asset Protection is an Authorised Representative 001259573 of Insurance House Pty Ltd ABN 33 006 500 072 AFSL 240954. This advice has been prepared without taking into account your personal objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of your objectives, financial situation or needs before following the advice. Please obtain a copy of, and consider the Product Disclosure Statement applicable to the general insurance product before making any decision.