As bars and restaurants serve customers again following the COVID-19 lockdown measures, striking the balance between effective risk management and authentic customer experience may determine whose doors stay open.
Bars and restaurants post lockdown

Balancing risk management with customer experience

It was welcome news for bar and restaurant owners up and down the country when the Government announced they could resume business after the COVID-19 lockdown.

Having remained closed for over three months through the unusually sunny spring weather, the Easter break and VE anniversary celebrations, many business owners took the opportunity to roll up their shutters the moment the new rules came into place, while others watched and waited to see how things would pan out.

Closer to normality?

Following guidance in countries such as France, Spain, Germany and Italy, the two-metre social distancing rule was relaxed to help bars, restaurants and cafes accommodate guests while still adhering to set guidelines (which for England is now a minimum of one metre – two where possible).

According to Kate Nicholls, CEO of UKHospitality, the easing of this rule has increased the potential capacity for most venues from around 30% to around 70%, which she says “could be the difference between failure and staying alive to see out the remainder of the crisis…1” However, the 10pm curfew on pubs, bars and restaurants in England introduced in September is now making the fight to survive harder for many businesses in the hospitality industry who rely on the night-time economy.

But it’s not just about the capacity of the venue itself. It’s also about whether or not customers feel safe to come back, especially now infection rates are rising again and lockdown restrictions in some areas are tightening.

After 14 weeks of hearing a “stay at home” message (and with many people still shielding in their homes), the new “eat out to help out” Government slogan may be a difficult one to digest for some.

Just over 20 percent of 1,788 people surveyed by the Office of National Statistics said they would be comfortable sitting in a restaurant or bar to have a meal during the pandemic, while over 60 percent said they would either be uncomfortable or very uncomfortable2.

The rules may be relaxed, but can the same be said for customers? A venue’s success may rely on what’s being done to help guests feel comfortable, confident and safe.

In the first few weeks after lockdown restrictions eased for bars and restaurants, there was a mixed response from the public to their reinstated freedoms. When England’s bars and restaurants began to open again on 4th July (dubbed ‘Super Saturday’) there were incidents of social distancing rules being broken and in some cases relaxed attitudes to these and other health and safety guidelines.

On the other hand, footage was shared that weekend and during the weeks that followed of diners in various establishments across the UK, seated at a generous distance from others, and being carefully served by staff in PPE. These reports have shown signage and floor markings clearly visible, hand sanitiser readily available, and guests following instructions from staff. It’s still a matter of time however before we discover how effective these measures are, even when they are being strictly observed.

Location can also be a factor in determining a venue’s success after re-opening. While bars and restaurants in cities may be seeing a resurgence in customers, many establishments in smaller towns and more remote locations are still struggling, and some village pubs have already closed due to business becoming unviable.

A number of chain restaurants are also running into severe financial problems. During the lockdown, job cuts and closures were announced by Frankie & Benny’s and Carluccio’s, and a few weeks after lockdown eased, Pizza Express announced that the company may close 67 of its UK restaurants which would mean the loss of 1,000 jobs3. Even before COVID-19, many restaurants and cafes were faced with rising rents and falling consumer spending, and so the financial impact of the pandemic may be impossible to recover from.

It’s all about the atmosphere

Surrounded by visible health and safety measures, and with a lack of background music to discourage raised voices, customers are now becoming accustomed to an altered dining environment.

Paul Jenkins, Purchasing Director at Caprice Holdings, a Gallagher client, says “We still want to create a welcoming physical environment without being overbearing. All the measures we’re taking should not detract from the overall experience.3

For restaurants within the Caprice Holdings group, this includes simple touches like restaurant-branded sanitisers or sympathetically designed screens and signage. But overall, it’s about providing guests with the same high level of service, a quality product and a great atmosphere. Paul’s advice for restaurant owners is to “Do as much as you can to mitigate the risk but work hard to ensure that you’re still offering customers great hospitality, because that’s what will keep them coming back”.

People come to restaurants for a reason – not just for food and drink but for the atmosphere. It’s the ambience that allows people to have a good time. As soon as you lose that you’ve lost the DNA of your business.”4
By Paul Jenkins - Purchasing Director at Caprice Holdings

What happens when financial assistance ends?

As one of the first sectors to be seriously affected by the pandemic and one of the last to reopen, the hospitality industry has been hit hard by the COVID-19 pandemic, despite many businesses receiving financial help throughout lockdown. It’s not long now before this assistance ends, including reduced rent, rate cuts and the Government furlough scheme. Some businesses may only have one chance to get this right.

Already, some UK establishments have had no choice but to shut down again after customers were diagnosed with the virus. The Scottish Government, for example, ordered pubs and restaurants to close again on 5th August due to a significant outbreak involving community transmissions. Further to this, regional spikes in cases of COVID-19 have led to local lockdowns in the Midlands, the North West and North East of England, and parts of Scotland and Wales.

Because of such outbreaks, further easing of lockdown was delayed for some areas of hospitality UK-wide, such as casinos and bowling alleys, and and at one point there was talk of a potential trade-off between pubs and schools in September to allow children to return to the classroom. Scientific advisor to the Government, Prof Graham Medley, has said that it’s possible that closing some other networks and activities “may well be required to enable us to open schools”5.

All of these considerations mean businesses across the hospitality industry will be facing high levels of uncertainty for some time to come.

Continuous risk management is key

The highest priority for all bars, restaurants and cafes right now is the health and safety of their staff and customers. The pandemic has elevated this duty of care and all venues are required to conduct a COVID-19 risk assessment before reopening to the public in order to minimise transmission of the virus.

3/4 of businesses did not pass their COVID-19 risk assessment first time6

Through our Risk Assessment Validation service, we have been assisting businesses across all sectors, including hospitality, with an independent, professional review of their COVID-19 risk assessments.

Since we launched this service we have found that over 75% of businesses (across all sectors taking up the service) do not have sufficient preparations documented to meet Government guidelines6. There are a number of reasons for failing the risk assessment first time – among the most common are misinterpretation of the guidelines, inadequate checklists, and a lack of detail on plans to control risk including PPE plans and employee education.

Although it’s almost impossible to completely eliminate the risk of virus transmission, having a validated and successfully implemented COVID-19 risk assessment will enhance risk mitigation and defensibility should a COVID-19 incident occur within the premises.

As part of Gallagher’s commitment to help businesses with their risk management, we have also been supporting clients with the deep cleaning of premises through services specialising in anti-viral disinfection. These services use hospital-grade disinfectant, and include misting treatments which can enable rooms to be used as quickly as ten minutes after application.

Keeping staff involved in the process

For many businesses, consulting staff throughout the risk management process has been key as they learn what’s working well and where improvement and adjustments can be made. It’s also essential to share the results of your risk assessment with your workforce.

From managing queues to configuring seating, displaying adequate signage to clearing and sanitising tables between guests, and now enforcing the 10pm curfew, this will be an ongoing commitment for venues and their employees. In addition, staff rotas should be organised and monitored in a way that helps business continuity should a member of staff contract COVID-19, causing those on the same shift pattern to also self-isolate.

Some businesses are going above and beyond Government guidelines to mitigate risk – Caprice Holdings, for example, ensured all of their restaurant staff had antibody tests before their venues reopened, and have an ongoing testing process in place.

Up-to-date guidance for restaurants, pubs, bars and takeaway services can be found on the UK Government website7, including advice on staff travelling to and from work, Test and Trace for workers (including keeping a record of shift patterns), social distancing, safe disposal of business waste including face coverings and PPE, support bubbles, guidance in the event of a local lockdown, and how to respond in the event of a COVID-19 outbreak in the workplace.

Data protection considerations

While focusing on these important health and safety measures, the risk of consequences from the mishandling of data shouldn’t be overlooked. When dining out, customers are currently being asked for contact details in line with the NHS Test and Trace service in order to help contain virus clusters or outbreaks. Venues are required to keep a temporary record of customers and visitors for 21 days8 (usually the lead guest of the visiting party), and assist NHS Test and Trace with requests for that data if needed.

There are strict guidelines around the use of this data – it needs to be kept secure, not held longer than the specified 21 days, deleted securely, and only used for the purpose for which it was intended. It should not be added to a venue’s general marketing database. In short, businesses should remain GDPR-compliant to avoid data breaches and potential repercussions.

COVID-19 and Business Interruption Insurance

Business Interruption (BI) insurance is currently a hot topic for the hospitality sector, and many other industries who have been affected by the COVID-19 pandemic. The market has seen many insurers take a stance that their policies do not provide cover for the pandemic and as a result many claims for losses arising from disruption to business caused by COVID-19 have currently been declined.

The court hearing in relation to the FCA test case on BI insurance policies9 finished on 30th July 2020. The FCA test case aims to provide clarity on whether and how particular business interruption insurance wordings should respond to the COVID-19 pandemic and subsequent national lockdown. The judge has stated he is aiming to report his findings in mid- September. However, there is a possibility that any ruling would be appealed and then fast tracked to the Supreme Court for final ruling. In the meantime, businesses are unfortunately having to add this uncomfortable wait to their list of concerns about the future.

The insurance market is already making changes where there are potential ‘grey areas’ within a policy wording. These changes range from COVID-19 exclusions to exclusions for diseases with pandemic potential. A market-wide wording from Lloyd’s Market Association, LMA5393 Communicable Disease Endorsement10, has been broadly used by many insurers in the recent weeks and months.

Gallagher has access to a specialist facility currently active in the market for Pandemic Risks. This product does have significant minimum premiums so is currently aimed at corporate business. We are also taking into consideration the changes that the insurance industry will need to make regarding business interruption insurance and its structure. Where possible we will aim to design BI sections to be fully adjustable so that our clients only pay for the insurance they need.

In addition, we are exploring lower percentage ‘minimum and deposit’ premiums on Liability sections, with a year-end adjustment to help ensure clients that might over-declare what their business will achieve have a way of minimising total insurance cost.

How Gallagher can help

In a hardening market where insurer appetite is waning, Gallagher’s Hospitality & Leisure practice is here to help businesses navigate their way through this challenging period.

If you have yet to reopen your bar or restaurant or are planning to reopen again after a local lockdown, we can help you meet Government requirements through our COVID-19 Risk Assessment Validation service. Or, if you are back in business and feel you would benefit from our specialist advice and support for the coming months, we can assist you with your ongoing risk management and business continuity planning.

We are supporting our clients across the sector with their Business Interruption claims, and closely following the FCA test case on their behalf.


  1. The Grocer
  2. BBC
  3. BBC
  4. Interview with Paul Jenkins, Caprice Holdings, 7th July 2020
  5. BBC
  9. FCA