Posted August 23, 2023
How the Labor Shortage is Impacting Claims

The impact of the COVID pandemic of 2020 continues to affect the hospitality industry. Few could have anticipated the labor challenges that were created and continue to persist. Unfortunately, we are beginning to see the impact of this ongoing labor shortage on our claim activity.


Years ago, a police officer/TIPS trainer told me “Million-dollar decisions are made by minimum wage employees.” His point was based on who is deciding, in the last hours of the evening, whether to serve a patron one more drink. He noted that the bartender or server at that time of the evening was rarely the owner or manager. The consequences involved with the decision to serve “just one more” can be tragic. 


As businesses struggle to find people willing to work in the hospitality industry, they sometimes can become desperate and will hire anyone who can show up to work. ICC has recently experienced several large claims that resulted from very poor decision-making by employees:


  • A young manager decided it would be cool to let a couple of underage waitresses drink at the bar on a slow night after their shift was over. Both young women later died in a single-car accident after leaving our insured.
  • Workers stacked boxes in front of the smoking bucket next to the building. Instead of moving the bucket, an employee flipped his cigarette over the boxes toward the bucket. He missed, and the butt smoldered for several hours before causing a large fire.
  • On one of the windiest days of the year, an employee decided to burn boxes in an outdoor burn area. Embers blew directly toward the building and caught it on fire. The wind caused the fire to spread rapidly, and the building was fully engulfed before the fire department could respond. 


Business owners must be extra diligent with new employees during these challenging times. If not already in place, consider adding video surveillance to help keep “eyes” on the place when owners can’t be there.


Alcohol server training and other courses are available through ICC and Katkin. Reach out to OnTAP@ilcasco.com to schedule an OnTAP server training or visit www.katkinco.com for other available in-person or online courses.