By SANNA LEVINE, a freelance writer with 25 years of experience writing
and editing for trade publications.
Despite possible legislation requiring allergen notifications on menus, restaurants are still an attractive industry for insurers, according to experts who underwrite restaurant industry risks.
"We may see underwriting restrictions or carve-out riders in policies if there's a dramatic increase in allergy-related claims. For now, everyone likes to write restaurants," said Barry Walfish, a broker with Jimcor.
Liability for businesses that serve food only as a sideline, such as airlines, could rise, according to Walfish. "They might not have the expertise to spot risks," he said.
Restaurants, whose sole business is food preparation and service, are generally alert to food allergens and the possibility of cross-contamination, said Jan Schnabel, Marsh Inc.'s Hospitality & Gaming practice leader, who was trained as a food-safety engineer.
"Restaurants take precautions, but they aren't expected to read consumers' minds," Schnabel said. "The industry standard is to let customers know if a menu item contains 'the Big 8,' " the most common, and potentially lethal, food allergens -- namely milk, eggs, peanuts, tree nuts, fish, shellfish, soy and wheat. "If a restaurant doesn't, and a customer can prove an allergic reaction, the general liability policy kicks in."
And it can kick in hard. Little data is available on recent cases because settlements have been confidential, said Tami Griffin, managing director of Aon's Food System, Agribusiness and Beverage Practice, but restaurants have taken notice of -- and preventive action against -- servers who misinform their customers about allergens and cross contamination that resulted in death and injury.
Meanwhile, the industry standard could change. The Food Allergy and Anaphylaxis Network, a nonprofit advocacy group and resource for food allergy and anaphylaxis information, successfully pushed Massachusetts' Food Allergy Awareness Act requiring restaurants to display its food allergy awareness poster and provide state-approved allergy training for servers.
"FAAN would like the Massachusetts law replicated in the other states," said Chris Weiss, Food Allergy and Anaphylaxis Network's vice president of advocacy and government relations. The organization expects other states, including Wyoming and New York, to introduce similar bills in early 2012.
Restaurants are subject to state and municipal laws, unlike packaged foods, which cross state lines and are therefore subject to federal regulation.
How the new Massachusetts law affects any liability risks, Weiss said, will depend on the facts specific to any claim. Proving an allergen originated at a particular restaurant is difficult because the evidence has already long disappeared ... into the stomach of the claimant.
The National Restaurant Association -- the trade group the Republican presidential candidate Herman Cain once headed -- worked with the Food Allergy and Anaphylaxis Network on guidelines for restaurants but doesn't see legislation or regulation coming down the road.
"The restaurant industry is concerned about customers' health," said Dr. Catherine Adams Hutt, a spokeswoman for the National Restaurant Association and president and CEO of the food safety consultant RdR Solutions Consulting.
"Most people with allergies tell their servers," Hutt said. "The restaurant community is deeply sensitive to food allergies, and servers and kitchens know what to do. Legislation and regulation isn't necessary." As a result, restaurants are likely to resort to self-regulation and avoid liability.
Part of the National Restaurant Association's resistance to regulation or legislation is related to the cost and impracticality of compliance, according to the Food and Drug Administration's Anitra Brown-Reed.
For example, menu boards in drive-through restaurants would have to be retrofitted and redesigned so the allergy notifications were big enough to be legible from a distance, which would claim a large part of the menu board's limited real estate.
However, Tami Griffin said the restaurant industry would welcome uniform labeling about allergens. "Compliance would be easier for the restaurants, and consumers could manage their own safety."
November 15, 2011
Copyright 2011© LRP Publications