Recent News – Industry alarmed by MHA directives, action against management if workers test positive for Covid-19 – Link
Brings me to a fantastic line – “Not taking risks one doesn’t understand is often the best form of risk management.” – Raghuram Rajan
Though Events and F&B are still not directly covered under industry category but this highlights the seriousness with which we need to assess and plan impact for Covid 19 – have to be assessed and a strong risk management plan has to be drawn as part of our respective businesses.
During some of the webinars our Company hosted recently, we came across multiple agencies who were interested to know about Public Liability Insurance –
1) The Meaning
2) Coverage Scope
3) Actual “on ground” benefit of the same.
Here it goes –
Definition – “Public Liability insurance (PLI) is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims and protects the insured party if the purchaser is sued for claims.”
Simply put, PLI protects against any “THIRD PARTY” claims levied on your business when bought to court, via a business client, customer or public; if a third party is injured or their property suffers damage while engaging at business activity or when you are working in their home, office or business property.
Why is it important for 3 stakeholders mentioned at the heading to be covered –
- Catering Companies – While serving tens of thousands of people at Marathons/Conferences/Sports Events, the odds of coming across concerns pertaining to quality, quantity, taste and most importantly, hygiene are very high.
In spite of following all relevant precautions, no caterer can prove if a strand of hair found is actually due to negligence or a conspiracy theory (falling from someone’s beard/foul play etc.). Besides the reputation damage, financial implication can run over 6-8 figures.
2) #CloudKitchens – Almost 95% cloud kitchens are running at the mercy of the Aggregator platforms, with multiple delivery boys thronging our kitchens at peak hours.
There is major gap for the consumer to identify the actual party responsible for transmission of the disease – where its the delivery boy or the kitchen staff? Hyper funded platforms have a dedicated Risk Management Team with appropriate liability covers, what about small Food Business Operators(FBOs)?
With wafer thin margins while managing commissions – no brainier to invest in one especially knowing the fact that each lac in delivery hits respective P&L.
3) Event and Event Ancillary Companies –
Important Fact –
- Event insurance (as a permission compliance) covers fire, production and other setup but what about the liability arising out of third party claims especially with stampede, food quality concerns, vendor screw up etc.? These are not covered under standard event insurance norms.
- Even if you make the judgment of not taking one for your Company, please ask ancillary vendors (F&B, Security, Production) etc. to have one. Adding it to vendor empanelment eligibility can also be an option.
- An event of 50 pax or 5000 pax – the risk is the same, especially with more information around. Importantly, the premiums are yearly and not on per event basis.
Conclusion
With ardent belief of optimized risk to reward ratio – it’s imperative to consider investing into PLI to ensure optimizing the ratio.
Recommended coverage from India perspective should be –
- Restaurants- INR 20 Lacs equivalent $27,000
- Catering Companies – INR 50 lacs equivalent $66,667
- Event Companies – depending on the size of event
#PublicLiabilityinsurance #Postcovid #Strategicplanning #CloudKitchen #Catering #Events #CorporateCatering