Thursday, May 21, 2015

Brewery Tip: Safe Alcohol Service In the Taproom


With festival season upon us, we can all look forward to the upcoming festivities and increased patronage to our breweries. With this increase in fests and fun, we may also expect an increase in hiccupy, wobbly customers who have over imbibed, and inversely decrease our fun (it’s science). Read my advice below, as both a brewery owner and brewery insurance and risk management consultant, on how to handle conflict resolution with intoxicated patrons. And I hope to see you at your brewery or mine soon!
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I’ve had the pleasure to work with 20+ breweries across Colorado and surrounding states over the past five years or so. Usually a pleasure, anyway… some of you guys smell weird. Anyway, most of my start-up clients have leaned on my experience as a brewer for advice when it comes to operations, licensing, beer quality (best part of the job), and, of course, risk management.

It’s always been fun to share what I’ve learned as an operator within the industry and a consultant to the industry. I’ve never really considered myself a very good teacher, but I’ve really come to enjoy this role.

One of the topics that has never come up in any of the conversations with the folks that brew the finest beverage on the planet has been that of conflict resolution. Specifically, resolving conflicts with intoxicated customers. The fact that this conversation has never come up didn’t occur to me until I started getting ready to interview taproom servers for our new brewery, Goldspot.

Obviously, the best way to resolve this situation is to have well-trained servers that can identify your friends that may have reached their limit. But that’s not always possible. Sometimes things are out of your control. You can have the best trained staff in the world, but if someone comes in having been over-served somewhere else, or they have a penchant for looking all cool on the outside while on the inside they’re a wobbly mess, you need to know how to take care of that person.

So, as I’ve been interviewing the awesome candidates that will hope to be presenting our liquid art to your flavor hole, the most important and telling question that I’ve asked these folks is this: How do you resolve conflicts?

I’ve compiled a short list of some of the answers that I’ve received, along with some stuff that I’ve compiled over the past few months as I build my own server training program.

    1.  If possible, don’t work alone/schedule a single staff person for late-night/closing    
         shifts. That stupid adage that your parents used to throw at you when you were 
         begging to stay out ‘til the wee small hours of the morning is pretty accurate. Not 
         everyone who’s out enjoying a drink after 10:00 PM is looking to get crunk. But when I 
         look at loss reports for my clients or prospective clients, most of the liability issues 
         involving intoxicated customers will happen after 10:00.

         Some of us are better at resolving conflict than others. Logic holds that if you’ve got  
         more than one person working, you’ve got a better chance of having someone there 
         who can successfully make the situation go away. Also, if one person is handling up 
         on an unwanted situation you still have another person to make sure that everyone 
         else is being taken care of properly.

         I also had an interviewee tell me that the bar he works at has been robbed three times 
         since he has been there. All three times is was when there was a lone worker closing 
         down the shop. Depending on where you’re located this might be a concern.

    2.  Address the person you’re concerned about directly. If they’re with a group of  
         folks that are otherwise being respectful, directly tell that individual that you won’t be 
         serving them any more alcohol that night and that you’d be happy to get them some 
         water or coffee (or Italian soda if you’re slinging suds at one of those fancy breweries).

         If they’re with a group, that group will usually take the initiative to make sure that their  
         friend stays cool and doesn’t cause any problems. From what I’ve seen, that party 
         usually settles up and leaves pretty quickly.

    3.  Be friendly when you approach them. Another old adage that came from Grandma 
         (so therefore not near as dumb as the stuff my dad told me) is that you catch more 
         flies with honey than vinegar. If you try to end a confrontation by being confrontational, 
         there’s a better chance that someone’s going to end up in a headlock than if you’re 
         nice.

         Don’t confuse being nice with being a pushover, however. You need to be confident 
         when you address them. Know that you are completely within your rights to make sure 
         that you, your clients, employees, and business are protected.

    4.  When in doubt, ask for help. If your beer is good, you’ve probably got several people 
         in your taproom. If your beer is good, some of those folks are probably regulars. If your 
         beer is good, those regulars probably love you and want you to continue serving them 
         your goodness in a glass. Those people are your allies and are usually more than 
         happy to lend a hand.

         I had an interviewee tell me that one of his favorite moves is to tell the offender that 
         he’s surrounded by people that like him (the bartender) more, and that if the offender   
         continues to be belligerent and hiccuppy, then he won’t be able to pay them any 
         attention. The guy that told me this is also 6’3” and weighs in at about 250 lbs, so he 
         can get away with talking this way. He also said that is his second to last move before 
         calling a cab and sending them on their way.

    5.  Make sure they have a safe ride home. Empower your employees to pay for cabs. 
         My employees will totally have the power to pull a $20 out of the drawer and hand to a 
         cabby to get home. One brewery owner that I spoke to has Über loaded on the    
         brewery iPad, and will arrange rides for customers that way.

         If they’ve got a sober friend who’s going to take them home, get that person’s contact 
         info and make sure that you document what happened. If anything happens after they 
         leave your establishment, you want documentation that you took the proper steps to 
         help them get home safely.


As a server of alcohol, it’s your responsibility to intervene if someone is getting out of hand. Luckily, this kind of situation is the exception and not the rule. Just remember to keep your calm, be confident, and be respectful. And, if you’re not 6’3” and 250 lbs and the situation is beyond your control, ask for help!

~Matt

Matt Hughes
Pure Risk Solutions
Office: 303-834-1001 | Mobile: 303.350.0287 
500 Briggs St., Ste. 200, P.O. Box 1274, Erie, CO 80516

About Matt
Matt is the owner of Gold Spot brewery and an insurance and risk management consultant who has been a part of Colorado's craft brewing industry for close to a decade. He uses his unique expertise in both the craft brewing industry and commercial insurance world to help breweries across the country understand the risks they face, while running his own production brewery and taproom.

Tuesday, April 28, 2015

The Two Best Ways To Protect Your Business


This month, you asked us: Where do you find that most businesses are under-insured? And why do you think they are?

The answer: Business Interruption + Cyber Liability.
Case In Point: Big cases of cyber hacking, like the Anthem hack,
exposed personal data on as many as 80 million records for current and former
customers and employees. The information accessed included names,
birthdays, Social Security numbers, street addresses, email addresses, and
employment information including income data. That’s 80 million people
the business is responsible to notify and provide protection for.
And the kicker? The risk isn't short term, like when a credit card
number is stolen. An attacker could sit on stolen information for years,
and you are liable just as long. 

Why? Yes, you do need it--and you really can afford it. Most small to midsize companies pass on these coverages because of added cost and a misunderstanding or underestimation of their need or risk. But consider this: Business Interruption and Cyber attacks are common, and can be financially crippling. Nearly four out of five -- 78% -- organizations experienced some sort of data breach in the past two years, and 71% of them failed because of it. Read our advice below on why it’s essential and why it really won’t cost you that much.


:|: Yes, you need Cyber Liability insurance. Target. Anthem. Sony. It seems that every week, a new story hits the media about a major hack. If you’re a small business owner, you may wonder: What would I if something like this were to happen to my company? How can I protect myself? Do I need cyber insurance?

The internet has made everyone vulnerable, the costs to fix an intrusion are very expensive, and coverage is inexpensive (in comparison), so it’s silly to take a risk. If you are a retailer that accepts credit card payments, you are open to cyber liability risk. Even if you don't, you probably have personal information from your employees and/or customers, and perhaps intellectual property from vendors.

What does the coverage buy you? It pays for out-of-pocket expenses after a breach, remediation costs, cost to notify impacted people, credit monitoring for those impacted, and identity theft resolution services should a theft occur. It can also cover public relations.

:|: Yes, you need Business Interruption insurance. Business interruption is likely to happen at some point during the lifetime of your business. The rising number of natural disasters (increasing from 400 to 600 major incidents annually, according to a recent survey from global insurer Allianz), makes this likelihood even greater.

Business Interruption is a very misunderstood coverage area. Most business owners assume that their standard Property policy covers them from loss. However, most standard Property policies cover only loss or damage to tangible items (i.e. equipment and inventory and your warehouse, office, or store), not lost profits if your business cannot operate (which an Interruption policy would cover).

Also, consider that your business is at risk when related businesses are affected by disaster. For instance, a fire at your credit card server’s processing center could take down your ability to accept payment, or flooding or a strike at a key manufacturing or delivery center could cause disruption to your supply chain. These events hurt your finances even though your facility may be undamaged. "Contingent business" insurance covers your lost profits in these disaster scenarios.

According to the Federal Government, statistics show that of all businesses involved in a major loss, 43% never trade again and 28% fail over the next three years. This statistic means only 29% survive and 71% fail following a business interruption event.

What does the coverage buy you? A Business Interruption policy covers lost revenue if your business has to temporarily shut down due to a disaster (whether to the supply chain or the business directly), payroll for your employees, expenses (i.e. electricity) and other costs while you’re preparing to reopen, and can be the deciding factor in whether your business thrives or fails.

Case In Point: Consider a disaster like Hurricane Sandy. Property policies cover damage to the structure and equipment listed on affected business policies (a good reminder as to why it’s so important to update your policy when you expand, purchase new equipment, etc.), but do NOT cover revenue lost while repairs were made or businesses found new locations. Businesses not covered by an Interruption policy would have to pay out of pocket to cover bills like mortgage and utilities (that do not quit following a disaster), employee payroll (or risk losing valuable, trained employees), and for temporary relocation during a rebuild. Covered businesses would have these expenses covered by their insurer.

How Much Do You Need? Calculating coverage needs and business worth is also a barrier to many companies. When there is a lack of understanding of the coverage, it is difficult for a business to set values to its worth, which is necessary to ensure the right coverage amount. For example, a study from the Chartered Institute of Loss Adjusters (CILA) in 2012 shows that 40% of all companies have declared values that are too low, and by as much as 45%!

To figure out your ideal coverage amount, you should envision how your business would be affected by a catastrophe (hurricane, fire, etc.). Consider all costs that you would continue to pay even if your business couldn’t operate (loan or lease payments and taxes). You may also need to keep workers on the payroll while you rebuild, so your insurance should reimburse you for their salaries.

:|: The Cost? You'll pay less for it than you'd expect. How much you need is dependent on the size of your business, your company’s balance sheet (for Business Interruption), and the type and amount of data your company manages (for Cyber Liability). A rider on a standard insurance policy may be sufficient for small companies, provided you do not process or store a large amount of sensitive information.

If a rider is sufficient for your business, Cyber Liability insurance can cost as little as $45 to $75 a year for $10,000 to $20,000 of coverage. Adding business interruption coverage and network security liability coverage could cost in the low hundreds per year. If you need a stand-alone policy, your premium cost will generally be at least $500, but more typically $750 and above. For larger businesses, this goes up, depending on the type of coverage you need.

:|: The Summary: Cyber Liability and Business Interruption are not part of your standard business insurance policy. Even if your policy has small amounts of these coverages as an enhancement, the amount of protection is not enough to really protect you.
  • Business Interruption insurance can be the difference between staying in business or disappearing after a direct loss (i.e. fire, flood), or an indirect loss (i.e. your credit card server goes down for a day, your distributor isn’t able to make a delivery crucial to your business).
  • Cyber coverage is too often built into another coverage on a policy, diluting the limits and reducing coverage. If your businesses uses a credit card vendor to accept payment or collects email addresses for a newsletter, you are open to cyber exposure – and should have a stand alone policy to protect your business and the costs that it could incur should your credit card vendor go offline, making you unable to accept payment (and therefore losing hours or days of income), or a hacker should steal your marketing lists or other Personally Identifiable Information about your clients.
Our advice: General coverage often isn’t enough to protect your business. Passing on these two added coverages can strike a fatal financial blow to your business.

Business Interruption and Cyber Liability are added protections your insurance company can tailor to the risks in your specific line of business. Believe us, your risk of the costs following a major loss (like a hack or business interruption) far outweigh the low cost of upfront premium coverage. 

Our goal is to help you avoid costly pitfalls associated with cyber or interruption breaches, and make sure that the financial health of your business is protected against accidents or catastrophes. Give us a call to review your policy and add the coverage you need.