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Catering equipment, hospitality equipment, foodservice equipment

Managing risks to businesses servicing the catering and hospitality industry

There are numerous risks that can affect businesses in the foodservice, catering and hospitality industry. Traditional risks and insurance cover will always need consideration, such as:

Current risks affecting the industry

In our experience, technological developments in the industry have meant that the risk of cyber-attacks have received renewed interest.


Cyber insurance (also referred to as cyber risk or cyber liability insurance) is a form of cover designed to protect your business from threats in the digital age, such as data breaches or malicious cyber hacks on work computer systems. Let’s look at a claims example:


Hackers gained unauthorised access to account information located on a network due to an unknown vulnerability. The account information included names, email addresses, national ID numbers, and the financial account information of 20,000 contacts. After multiple people reported suspicious activity on their email, IT discovered that an unauthorised user was in the system. The insured telephoned their insurer hotline.

Potential impact

Privacy liability – mismanagement of personal and/or corporate confidential information
- Defence expenses arising from regulator investigation due to irresponsible management of private information
- Defence and settlement costs for claims from individuals that had their identity stolen

Network security liability – failure to effectively protect insured’s network from malware, hacking, denial of service attacks or unauthorised use or access
Incident response expenses
- Forensic investigation costs to locate vulnerability, analyse impact, ensure containment, and calculate extent of loss
- Notification to affected individuals
- Identity theft monitoring services to affected individuals
- Costs to set up and operate a call centre for enquiries
- Public relations expert fees to minimise reputational impact of the incident - legal consultation fees
- Incident response manager fees
Total cost: £243,000


This scenario highlights the importance of storing sensitive information under the necessary protections. Up to date firewalls, intrusion detection software, and encryption of databases are just a few ways to responsibly maintain the privacy of employee and customer information. This example also highlights the many ways a cyber policy may respond to cyber events.1

Another topical risk is directors’ and officers’ insurance.

Directors’ and officers’ insurance

Directors’ and officers’ (D&O) insurance offers vital protection for you as a company director or officer. It pays your legal defence costs and damages that you are legally liable to pay to other parties following a wrongful act committed by you in your capacity as a company director or officer. Let’s look at an example claim:

  • Scenario: A company needed help with a claim brought against them and its directors by a former company solicitor and company secretary for discrimination and constructive dismissal. The situation was further complicated by the fact that some of the directors of the company were involved in procuring phone records from a third party to help substantiate their claims against the claimant and in doing so, breached the Data Protection Act 1998.
  • Outcome: Settlement and legal costs in negotiating acceptable outcomes for all parties came to over £75,000.
  • Takeaway: Directors’ and officers’ claims are rarely straight forward, either in terms of size and or circumstance. Insurance protection can give peace of mind from the unforeseeable.2

Managing your claims and costs

Of course, avoiding a claim is always better than having one in the first place. Not least, because it can have an adverse effect on your premium in the future. Understanding your risks and managing them effectively can help to reduce the frequency and cost of your claims. Plus, it can help to create a risk-aware culture in your business.

Risk Management

Specialist risk management consultants can offer a wealth of experience and can work with you regarding your health and safety or employment law matters to ensure you are prepared for the challenges you face.

Health & Safety at work

Many businesses faced unprecedented challenges to protect safety and health at work, while also battling to survive in lockdown. To support you in returning to work safely, we collaborated with leading risk management specialists to provide an expanded range of services to help mitigate this risk. This includes a number of downloadable tools providing practical information, guides and checklists to navigate you through some of the most common risks and measures to mitigate the risk from exposure to COVID-19. Visit the Health & Safety Hub.

1 Chubb ‘cyber claims examples’
2 Markel International ‘claims examples’
Claims examples are based on actual claims with the insurers. Costs and expenses will differ in every scenario, and your policy wording should be reviewed in detail to see how your insurance will respond.

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