Risk management becomes a prominent focus as the hospitality sector battles to prevent claims inflation around allergic reactions

Last month, The Natasha Allergy Research Foundation published new figures from information and data organisation NHS Digital, revealing that the number of children in England that had been hospitalised with severe allergic reactions had increased by 72% over the last six years.

A total of 1,746 hospital admissions that related to under 18s experiencing anaphylactic shock, a life-threatening allergic reaction, were recorded in 2018 to 2019, compared to 1,015 cases in 2013 to 2014.

Taking adults into account, the data showed a 34% increase in anaphylactic shock admissions over the same reporting period, from 4,107 cases to 5,497.

With food being an allergen for many of these individuals, restaurants and cafes across the UK may be wondering whether this apparent rise in allergic reactions and associated hospital admissions could correspond to an increase in public liability premiums.

Paul Wilson, adjuster at McLarens’s Belfast office, noted: “With such an increase in hospital admissions, it is somewhat inevitable that a rise in the number of potential claims and litigation will follow, also fuelled by the number of legal firms providing online guidance regarding allergic reaction compensation. This would correspond with our own experience in recent times, specifically in the hospitality industry.”

Seemingly supporting this view, specialist business insurer Simply Business reported a 12% year-on-year increase in quote requests from restaurant owners compared to last year.

However, George Scarfe, head of insurance product, small and medium sized enterprises (SME) at Simply Business, stated that this is unlikely to be linked to increased allergy awareness, as quote requests for cafés have instead decreased by 3% between 2018 and 2019.

For Scarfe, “public liability cover remains the same as we haven’t seen any claims inflation as a result of food allergies or intolerances.”

Increased awareness

Food allergies have gained more column inches since the death of 15-year-old Natasha Ednan-Laperouse in July 2016; she suffered a fatal allergic reaction to sesame after eating a Pret a Manger baguette that did not specify the allergen in its ingredients list.

As a result of this, new labelling legislation – dubbed Natasha’s Law – is expected to come into force next summer. This will require businesses to label all products that are prepared and packaged on-site with a full ingredients list.

Currently, only pre-packaged food and drink that is prepared off-site needs to be labelled with an ingredients list; on-site products for direct sale only have to display allergen information in writing, whether this is on an ingredients list, menu, chalkboard or an information pack.

“The Food Standards Agency has stepped up its awareness activity to make business owners in the food and drink industry aware of their legal responsibilities,” Scarfe added. “The main responsibility of business owners in this space is to provide the correct allergen information about the ingredients that are in the food they serve to their customers.”

Industry reaction

Wilson detects that risk management will be more of a focus for restaurant owners and insurers moving forwards.

“Given that the upward trend will likely continue for the foreseeable future, it’s possible the market will respond on the policy side, and we would also expect an increased focus on implementing improved risk management with policyholders, specifically around risk assessment, provision of allergen information, staff training, prominence of displays and warnings, kitchen hygiene and avoidance of cross-contamination, as well as server and chef communication,” he said.

Scarfe added: “It’s important to note that insurance policies given to the food and drink industry are conditional and for the policy to remain valid, the business must comply with regulation around food standards and safety. The responsibility, therefore, falls to restaurants and café owners to ensure they abide by this.”

Proactive stance

Furthermore, Wilson warned restaurateurs to exercise caution when attempting to repair reputational damage following an allergic incident, or risk invalidating their insurance cover.

He explained: “Policyholders often issue apologetic responses to initial complaints offering, for example, refunds, free meals, overnight stays, etc, which can result in a potential breach of policy conditions relating to an implied or actual admission of liability without the consent of the relevant insurer.”

He concluded: “It is imperative, irrelevant of the size of the organisation, that all businesses selling or serving food review both their internal policies and procedures in an utmost effort to avoid such incidents, together with their insurances.

“This is an important step in safeguarding themselves against an increasing trend in the number of civil claims arising from food allergen reactions, together with potential criminal investigations arising as a result of such incidents.”