21 Aug Getting the right cover for your dark kitchen
Mention the words ‘dark kitchen’ a decade ago and, chances are, listeners would assume you were talking about an electricity outage. These days, most people understand that the term refers to a purpose-built commercial kitchen that’s used to prepare meals for delivery.
Australians’ increasing appetite for ordering in, via apps such as Uber Eats, Menulog and Doordash, has seen dark kitchens spring up in major cities and towns across the country.
Establishing one can be a smart way to grow your hospitality business but it’s important to understand and mitigate the risks before you get busy on the pots.
Feeling the heat
Chief among them is fire, according to Steadfast Broker Technical Manager Michael White. It’s a possibility anywhere cooking takes place and a heightened risk in busy commercial kitchens.
Should one break out, the damage can quickly run to six and seven figures, if workers fail to get it under swift control. In April this year, for example, a kitchen fire in Adelaide’s Paper Tiger Asian restaurant resulted in an estimated damage bill of $200,000.
Depending on the style of food they’re turning out, dark kitchens can be just as susceptible to conflagration as those that service dine-in customers, White says.
“Cooking in hot oil is obviously more dangerous than baking in an oven,” he points out.
Mitigating the risk of fire
Irrespective of what you’re producing in your dark kitchen, it’s critical you have comprehensive fire prevention and control measures in place.
Installed fire suppression protection is mandatory in commercial kitchens nationwide – think wet chemical or carbon dioxide systems that smother blazes quickly and prevent them reigniting.
Typically, commercial kitchens will also be required to have early warning systems that detect increases in temperature and smoke levels and alert workers to the danger before a blaze breaks out.
Meanwhile, a rigorous cleaning and maintenance regime will reduce the flammability of your environment and lessen the likelihood of faulty equipment setting things alight.
Electricity outage is a major risk with this kind of business particularly with stock in cold storage.
“If you have stock in cold storage, there can be a major loss if there is a major power outage. You can insure against that risk,” says White.
In the absence of these measures, you’ll find it tricky to obtain the property and contents cover you need to protect your premises and business, White says.
Don’t try this at home
That’s the reason dark kitchens run out of suburban homes and in residential locations which aren’t zoned for the purpose are virtually uninsurable. Most home businesses, other than office type businesses, render the home uninsurable.
In fact, setting up shop at home may void your existing home and contents cover, White warns.
“Most home insurance policies have an exclusion for commercial activities and it’s hard to imagine an insurer being willing to accept the risk,” he says.
Covering yourself comprehensively
Adequate building and contents cover will also protect your dark kitchen from a range of other events, including cyclone, storm, flood and accidental and malicious damage.
Business interruption insurance should also be a consideration, if your operation is a sizeable one.
“Having a policy in place can help prevent an accident or incident taking an oversized bite out of your earnings,” White says.
Cover to help your business keep on cooking
Maintaining suitable insurance can help your business recover from many flavours of disruption and disaster. If you’d like to review your cover, to ensure it’s right for your requirements and risk profile, contact your Steadfast broker today.
Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.
Important notice – Watkins Insurance Brokers Pty Ltd ABN 23 059 370 455, AFSL 244427
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date the article is written as specified within it but is subject to change. Watkins Insurance Brokers Pty Ltd make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.
This article has been reproduced with the consent of Steadfast Group Limited.
Source: – https://www.steadfast.com.au/well-covered/business-insurance/getting-the-right-cover-for-your-dark-kitchen/