The hospitality industry took a pretty heavy hit in 2020 but are we finally seeing the end of the tunnel? Now that we are well out of strict pandemic restrictions we enter a world where traffic again exists meaning people have places to go. With vaccine passports in place with close to 73% of the Canadian population double vaccinated we begin to see restaurants and bars filling up and also provided the ability for full capacity. We are entering a new era and there is no reminder needed that we are not quite back to normal, nor the possibility if we will ever be and that also reflects from an insurance standpoint.

Much prior to the pandemic, insurance markets did not shy away from writing restaurants, bars, taverns and even nightclubs. Even with a large book of business of hospitality accounts the claims that resulted from them were a hard pill to shallow. As a result we entered into a hard market where insurance companies cut classes of business, increased rates and tightened their underwriting guidelines.

With hard market conditions in addition to pandemic restrictions -hospitality establishment owners were placed in a difficult predicament if they couldn’t operate within the guidelines. If they couldn’t operate within the restrictions they couldn’t afford insurance premiums as a result they would have to shut down operations temporally or for good. There was no promise when everything will open back up and business owners were tapping into savings to pay rent. Luckily at APRIL we have worked closely with our markets and broker partners to alleviate some of that burden by providing audits on our hospitality book of business to ensure we are rating with the actual sales and result in adjustment endorsements many of which with significant return premium.

With the holiday season approaching, the hospitality industry is expecting increased foot traffic. Canadians are eager to get back into some sense of normal and eating at restaurants is one of them. There is much to consider for restaurant owners while they prepare to open their doors.

Staffing being one of the first items of consideration. Many of the experienced hospitality workers prior to the pandemic have found other means of work to compensate for their unprecedented layoffs. Restaurant owners are left to hire new staff, many of which with no to little experience. It is their responsibility to training accordingly. An inexperienced server can easily be a liability to the establishment. Not knowing the ingredients of the dish with allergies being present or over serving inebriated patrons. This also applies to kitchen staff; ensuring proper health safety practices and food handling procedures are maintained with integrity to avoid cross contamination or undercooked meat.

While considering insurance, insureds expect to be adequately protected for a fair premium. If you haven’t noticed already premiums are much higher than they used to be; reasons being inflation for one, accumulated claims expenses and the rate increases due to the overall risk hospitality establishments pose. It is not as easy as it used to be to acquire insurance coverage. Market have tightened their guidelines and brokers are forced to approach MGAs more often, even then the struggle continues. There are not many markets that will underwrite nightclubs or shisha lounges -where are they being placed? Its important for restaurant owners to consult their brokers regarding whether their operations fit the appetite of insurance carriers prior to advertising their niche. Its important as an insurance company that our partnered brokers have reputable relationships with the clients and have a good level of risk management knowledge towards hospitality accounts specifically.

The hospitality sector being one of the biggest drivers for the Canadian economy making 6.5% of Canada’s GDP in 2019. Together, insurance companies, brokers and insureds, can help the industry once again achieve its economical status and ensure risk management to maintain the industry reputation within the insurance industry. Once again we will all be celebrate at our favorite bar or restaurant if not this Christmas season -definitely in the new year!