As the recent spate of blazes in restaurants and hotels bears witness, fires pose a real and present danger to hospitality businesses. Aside from endangering the lives of your staff and customers, fires can leave you with unforeseen costs even if you’re insured. So how can you prepare for the event of a fire, and how should you deal with it if one affects your business? Rosie Birkett reports.
If you’re a hospitality operator, the only brigade you want to see on your premises is the one in your kitchen. But there’s no denying that restaurants, hotels and pubs lend themselves rather worryingly to the occurrence of a fire. Even if all fire regulations (see panel) are adhered to, and legal precautions put in place, the realities of the kitchen – its naked flames, flammable substances and the often close proximity of hospitality businesses to other premises – can lead to accidental fire or smoke damage.
In the past couple of years, Caterer has reported a string of such instances. Last year, Rose Gray and Ruth Rogers’ acclaimed west London restaurant, the River Café, was closed for six months after a fire broke out in its kitchens; in January this year, a gas explosion at the Drumtochty Arms in Aberdeenshire ripped apart the hotel and injured three members of staff; more recently, Atul Kochhar’s Michelin-starred Indian restaurant Benares was forced to shut after a fire in its ventilation system in September; and Chelsea restaurant Eight Over Eight was closed following a fire in October.
When Sam and Eddie Hart’s Soho restaurant Quo Vadis was forced to close in the midst of a lunch service this summer after a blaze on Dean Street caused smoke damage, it was an unwelcome hiatus for the business, which had opened in a flurry of critical praise.
“We had to close for two weeks and we were lightly smoke-damaged, but it was caustic smoke so it needed to be professionally cleaned,” says Sam Hart, who is now back in the full swing of things with Quo Vadis. While the restaurant was covered by an insurance policy for the damage, Hart points out that the incident carried with it unforeseen costs specific to the trade.
“We were covered from an insurance point of view, but insurance claims are always problematic for hospitality because you stop taking money straight away and don’t get any back for ages, so it really messes with your cash-flow, which is difficult. Although you can do an insurance claim and be successful, it still doesn’t help with the fact you’ve been closed for a couple of weeks.”
Hart also explains that the sudden closure of the restaurant can be damaging for the misconceptions this can cause – especially in the depths of a recession. “You need to try and make customers aware of what’s happening and why,” he stresses. “In a recession, many companies go bust and say that they’re closing for refurbishment – and sadly there are plenty of people out there willing to spread the rumour that you’ve gone under. We had signs up on the door about when we were closing and reopening, but people tend to only read the bit about being closed. One thing that saved us was the fact we have a big database of customers’ e‑mail contacts, so we kept them posted.”
Often, insurance also fails to allow for more difficult to quantify factors, like the difference a closure can make to a business when it reopens, as Hart explains. “Where it gets much more complex is the difference it can make to your business after you’ve reopened. We reopened at the start of August, which is a quiet time anyway, and there’s no doubt the fire took a bit of momentum away.”
Similarly, Kochhar cites this break in business as the most damaging element of the fire at Benares and warns operators to do all they can to avoid a fire in the first instance.
“Telling our regulars we’re not open at the busiest time of the year is not easy,” he says. “We were covered for interruption of business but there are so many things that go through your mind when you’re undergoing this kind of stress – even if you’re insured for every last penny there is no guarantee you’ll get back to the level you were at before the fire.
“It takes some time to get back on track once you’ve reopened – I’m guessing it will be about six to eight weeks for us to leap back to the same level, and that’s with a lot of media and PR. One should be very careful and diligent to not let anything happen – make sure all the steps and procedures are followed over-cautiously, rather than just doing it adequately. One size fits all is not the case because it’s such a diverse industry – so much can go wrong, be it human, electric or mechanical error, so you should keep up with everything as there’s no way out.”
During the six-week closure period, the Hart brothers made sure that they utilised their free time and that of their staff wisely. “It was a brilliant time to do all sorts of things you don’t normally have time for, like catching up on extra training and taking stock, back of house, cleaning, polishing, reworking menus and team building,” says Sam Hart.
One operator who had more than ample time for all of these things is Laurie Gear, chef-patron of the Artichoke restaurant in Old Amersham, Buckinghamshire, which was forced to close for a total of 17 months after it was ravaged by a fire last June. Gear’s restaurant, which he has been running with his wife for six years, is housed in a Grade II listed, 16th century timber-framed building and was reduced to a pile of smouldering rubble after a blaze spread from a neighbouring restaurant.
“We got a call from the alarm company, went rushing down to the restaurant and the place was a bloody blaze,” Gear explains. “It was one of the biggest fires in a Buckinghamshire town for years and we were devastated – I’ll never forget my wife’s face and we were totally taken by surprise. Because we’re freehold and not tenants, and because of the listed nature of our building, there were lots of extra costs we had to absorb.”
The most crucial lesson Gear learned from the accident was to be picky about loss assessment. “The insurance company had initially appointed us a loss assessor who mediated with the insurance company, but we were unhappy with this and appointed our own from Harris Balcombe, who had dealt with other restaurant fires like the one at River Café,” he says.
“The best piece of advice I could give is to appoint your own loss-assessor because they will be working for you and you have more control that way. The object of the insurance company is to not pay out, whereas the job of the loss assessor is to get you what you’re due.
“Make sure you do your research and look into whether they’ve done similar sorts of businesses because restaurants and hotels are different to factories or warehouses because of cash-flow. There are a million different layers to the restaurant industry and you need someone who’s savvy to that situation.”
One of the most difficult things for Gear was quantifying the cost in terms of loss of business, something which was made all the more difficult by the fact that the country was on the cusp of a recession. As he explains, the insurance company was obliged to apply a recession-related 20% downturn to usual revenue figures, something that Gear, whose restaurant is listed in the Good Food Guide, has two AA rosettes, two couverts in the Michelin Guide and a top score for cooking in the Hardens Restaurant Guide, fought against.
Luckily for Artichoke, the chef was able to enlist the support of neighbouring operators Tom Kerridge from the Hand and Flowers, and Becky Salisbury of pub chain Salisbury Pubs, to vouch that their businesses were still buoyant despite the downturn. He also received support from Derek Bournemouth of Michelin, and the Hardens guide, both of which kept Artichoke in the guides – helping to maintain visibility.
But despite settling with the insurance company to cover the cost of the £350,000 rebuild, Gear had to foot the bill for £60,000 of extra building costs accrued from maintenance to the 16th century building.
“A lot of that was unforeseen building works,” says Gear. “Because it’s such an old building, you are duty-bound as a freeholder to restore things to their original state and everything has to be restored – that’s where extra costs come in.”
Gear was however able to agree with the insurance company on keeping key members of staff, and used the months of free time to develop his team, doing a three-week stage at Noma in Copenhagen with his head chef and keeping customers engaged with e‑mails sent from the company’s database. After 17 months of closure, Artichoke reopened last month.
FIRE SAFETY LAW, REGULATIONS AND GUIDANCE
The Regulatory Reform (Fire Safety) Order 2005 (FSO) came into effect in October 2006 and replaced more than 70 pieces of fire safety law. The FSO applies to all non-domestic premises in England and Wales.
Under the FSO, the responsible person must carry out a fire safety risk assessment and implement and maintain a fire management plan. You can view details of the law at www.communities.gov.uk/fire/firesafety/firesafetylaw.
Further information on what you need to do when carrying out a risk assessment is available in the five-step fire risk assessment at www.communities.gov.uk/documents/fire/pdf/151102.pdf.
More detailed advice and guidance on the implementation of a fire risk management plan can be found in the series of guidance documents available on the Fire Gateway website at www.fire.gov.uk/Workplace+safety.
The BHA produces a fire risk assessment toolkit, featuring a training section endorsed by the Royal Institute of Public Health which aids members in complying with the 2005 Regulatory Reform (Fire Safety) Order. This is priced at £99+vat for restaurant members and £144+vat for hotels. To purchase a copy, or for further information on the toolkit and fire safety, call 020 7404 7744.
PROTECTING YOUR BUSINESS IN THE EVENT OF A FIRE
Jonathan Samuelson, partner of loss assessor Harris Balcombe, gives his expert advice
Make sure you’re properly insured. This is the biggest problem facing restaurants and hotels. You need to make sure your business interruption cover is adequate. Having business interruption cover means that you’ll be able to pay your staff and be reimbursed for loss of revenue. This is crucial, especially for restaurants, because if you lose your chef that can be the end of your business.
Unlike many businesses, a restaurant cannot easily relocate. If you have a catastrophic fire it can take much longer than you anticipate reopening, especially if you need to get permission from the local authority to begin work on the repairs. You need at least 24 months’ cover to be safe. 24 months is the maximum indemnity period and this insures you against loss of profit for two years. It can easily take nine months to reopen, and then it’s like opening a new restaurant because you can’t just reopen and expect business to be back to normal. Check that the insurance is correct and understand that you need to insure gross profit before wages are deducted.
You need to check that you are complying with all the warranties and conditions of your policy. Something that is different for restaurants relates to the cleaning of duct work and extractors. Your policy may say that you need to clean them every month or every six months. If you don’t comply with this you’re likely to have your claim turned down – even if the fire was nothing to do with ventilation or ducts.
Deep fat frying equipment needs to be checked because after the fire it’s too late. The restaurateur has got to make sure the insurance broker runs through all this with them at every renewal and that they understand what their obligations are.
Published by: The Caterer