To specialize in any particular risk-type or even to properly place coverage for a single insured requires a basic understanding of the insured's industry. By studying the industry, agents can uncover unique exposures and may be able to offer risk management advice to help the insured lower their insurance premium or find alternative methods of dealing with their risks.

This commentary focuses on restaurants and other food service and drinking establishments. Links to additional sources of information are found at the end of this article.

Significant Points

• Greater than 1 in 5 restaurant workers are between 16 and 19 - about 5 times the proportion for all industries.
• Cooks, waiters and waitresses and combined food-preparation and serving workers comprised nearly 3 out of 5 workers in this industry.
• About 2 out of 5 employees work part time, more than twice the proportion for all industries.

Nature of the Industry

Eating and drinking establishments may be the most widespread and familiar industry. Restaurants (from fast-food eateries to formal dining establishments), cafeterias, caterers, bars and food service contractors providing food service operations at places such as schools, sports arenas, and hospitals are all included in this class of business.

In 2006, there were 524,000 privately owned food service and drinking places across the United States. About 46.4 percent of these establishments are limited-service eating places (i.e. fast-food restaurants, cafeterias, and snack and nonalcoholic beverage bars). Full-service restaurants account for about 39 percent of the establishments in this category; and alcoholic drinking places such as bars, pubs, nightclubs, and taverns which prepare and serve alcoholic beverages for consumption on the premises comprise about 9 percent of all establishments in this industry. Special food services, such as food-service contractors, caterers, and mobile food-service vendors, account for the remaining 5.4 percent.

Limited-Service Establishments
• Meals in fast-food establishments are generally prepared by workers with minimal cooking or food handling skills and often are served in disposable, take-out containers.
• Cafeterias usually offer a somewhat limited food selection with daily variations. Selections usually are prepared in large quantities ahead of service and seldom are cooked to the customer's specifications.
• Snack and nonalcoholic beverage bars carry and sell a combination of snacks, pastries, nonalcoholic beverages and other related products for consumption on or near the premises.

Full-Service Establishments
• Full-service restaurants offer more meal courses and menu categories. Meals are cooked to the customer's order. Waiters and waitresses offer table service in comfortable surroundings. Atmosphere is more upscale, food is skillfully prepared and service is expected to be highly professional in these restaurants. Per-person costs generally are higher in these establishments.
• Midscale and family-type restaurants usually offer efficient table service, well-priced familiar menu items prepared by moderately skilled kitchen workers all in comfortable but not elegant surroundings.

Drinking places may offer patrons limited dining services in addition to providing alcoholic beverages. Establishments selling alcoholic beverages are closely regulated by State and local alcoholic beverage control authorities and have special licensing and insurance requirements. An establishment moves from a "food-service" establishment to a "drinking place" when alcoholic beverage sales exceed between 40 and 60 percent of the total sales (based on insurance company guidelines).

Recent Developments

Computer and data protection (equipment breakdown) coverage is needed by nearly every modern restaurant. Technology influences this industry class in many ways by enhancing efficiency and productivity.

Many restaurants use computers to track orders, inventory, and patron seating. Point-of-service(POS) systems allow servers to key in a customer's order, either by use of hand-held, table-side devices or from a computer terminal in the dining room. These POS devices instantly send the order to the kitchen so preparation can begin. The same system can total and prints checks, functions as a cash register, connects to credit card authorizers and tracks sales. Managers often use inventory-tracking software to compare the record of sales from the POS with a record of present inventory to minimize food costs and spoilage.

Food service managers use the Internet to track industry news, find recipes, conduct market research, purchase supplies or equipment, recruit employees and train staff. Internet access also makes service to customers more efficient. Many restaurants maintain websites that include menus and online promotions, provide information about the restaurant's location and offer the option to make a reservation.

Wireless communication headsets are now being used by some managers, hosts and hostesses, and chefs. Headsets allow a means of hands-free communications with other staff so that they can prevent order backups in the kitchen, better serve patrons in the dining room, or more easily accommodate special requirements, such as large groups, diners with special dietary needs, or disability accessible seating requirements. Other wireless technology systems allow managers to monitor orders placed through individual terminals or by particular employees, instantly check inventories, and ensure timely preparation of customers' orders.

Working Conditions

Hours: Food service and drinking establishments are often open long and odd (nights and weekend) hours. Part-time employees typically work shorter days (4-6 hours per day) or fewer days per week than most full-time employees.

Safety and Environment
• Food services and drinking places must comply with local fire, safety, and sanitation regulations. They also must provide appropriate public accommodations and ensure that employees use safe food-handling measures. These practices require establishments to maintain supplies of chemicals, detergents, and other materials that may be harmful if not used properly.

• Kitchens usually are noisy, and may be very hot near stoves, grills, ovens, or steam tables. Chefs, cooks, food preparation workers, dishwashers, and other kitchen staff may suffer minor cuts or burns, be subject to scalding or steaming liquids, and spend most of their time standing in a relatively confined area.

• Chefs and cooks are under extreme pressure to work quickly to stay on top of orders in a busy restaurant. The fast pace requires employees to be alert and quick-thinking, but also may result in muscle strains from trying to move heavy pots or force pressurized containers open without taking the proper safety precautions.

• Servers, attendants, and other dining-room staff need to guard against falls, spills, or burns while serving diners and keeping service areas stocked.

• In 2006, the rate of work-related injuries and illnesses was 4.2 per 100 full-time workers in eating and drinking places, slightly less than the average of 4.4 for the private sector. Work hazards include the possibility of burns from hot equipment, sprained muscles, and wrenched backs from heavy lifting and falls on slippery floors.

Employment Characteristics

This industry, with about 9.4 million wage and salary jobs in 2006, ranks among the Nation's leading employers. Food services and drinking places tend to be small; about 70 percent of the establishments in the industry employ fewer than 20 workers.

Establishments in this industry, particularly fast-food establishments, are leading employers of teenagers—aged 16 through 19—providing first jobs for many new entrants into the labor force. In 2006, about 21 percent of all workers in food services and drinking places were teenagers, about 5 times the proportion in all industries (table 2). About 43 percent were under age 25, more than 3 times the proportion in all industries.

Additional Information

• National Restaurant Association
• National Restaurant Educational Foundation
• The American Culinary Federation
• The International Council on Hotel, Restaurant, and Institutional Education

NAICS Codes : 722

For more detailed information go to the Bureau of Labor Statistics food and drink establishment site.

Source: Bureau of Labor Statistics