Duty of care – understanding your obligations as a hospitality licensee

In Australia, hospitality licensees i.e. Those who operate businesses involving the sale or supply of alcohol, such as pubs, bars, clubs, and restaurants— must meet their obligations under law. One such obligation is the significant responsibility known as the “duty of care.” This duty requires licensees to take reasonable steps to ensure the safety and well-being of their patrons, guests and employees. Understanding and complying with the duty of care obligations is crucial to avoid legal liabilities and maintaining a safe environment.

Duty of care refers to the legal duty one party owes to another to avoid causing harm. In the context of hospitality, this means that licensees must act reasonably to prevent foreseeable risks of injury, be it physical or mental, to their patrons and employees. This responsibility encompasses various aspects of operation, including the physical environment, the conduct of your employees, and the overall management of the venue.

A common example, of meeting the duty of care obligations in respect of your employees and providing a safe workplace is whereby you (or another employee) identifies that a patron is drunk and unruly. As licensee, you must not let them into the venue and if they are already there then you must take reasonable steps to remove them.

In Australia, the duty of care for hospitality licensees is primarily governed by common law principles (alongside statutory regulations which we will cover in another insight article). Common law principles dictate that licensees must take all reasonable precautions to prevent harm. This includes addressing potential hazards within the premises, such as ensuring that floors are free from slip hazards and that proper lighting is maintained. Failure to address such hazards could result in legal demands for compensation if a patron or employee is injured because of the venue’s actual or alleged negligence.

Hospitality licensees should implement a framework to recognise, assess and manage their duty of care. We have detailed some suggestions below which not only help to meet licensees’ common law duty, but also complement the law and regulations in place for the sector:

Regular risk assessments are essential for identifying and addressing potential hazards. This includes evaluating the physical environment—such as checking for slip and trip hazards, maintaining safe electrical installations, and ensuring that fire safety equipment is in place. Additionally, risk management involves establishing protocols for handling and recording of incidents such as managing intoxicated patrons or medical emergencies.

Examples of risk management initiatives for hotel licensees include ensuring staff are appropriately trained in the Responsible Service of Alcohol (RSA), maintaining cleaning logs and checks, annual thermographic testing of switchboards, regular cleaning of rangehood filters, flus, canopies, as well systems to record compliance with the Food Standards Australia New Zealand Act 1991.

Licensees must adhere to the principles of responsible alcohol service. This involves training staff to recognise signs of intoxication, managing the pace of alcohol service, and putting in place procedures to prevent excessive drinking. Employees should also be trained to handle situations where refusal of service may be necessary.

Effective crowd control is crucial in maintaining a safe environment. This involves having adequate security measures in place, such as trained security personnel and surveillance systems. Licensees should also establish clear policies for managing large crowds and handling potential conflicts or disturbances.

The ongoing training and supervision of employees are both vital components of fulfilling the duty of care. Employees should be educated on legal requirements, safety protocols, and customer service skills. Regular supervision ensures that employees adhere to these protocols and can effectively respond to any incidents that arise.

Failing to uphold the duty of care can lead to significant consequences for hospitality licensees.

A breach of duty of care happens when:

Licensees may be held legally liable for injuries or property damage sustained by patrons or employees if it can be proven that reasonable care was not exercised. This could result in costly lawsuits, compensation payments, and damage to the venue’s reputation.

A failure in duty of care can also lead to reputational damage, which can affect the business’s profitability and customer trust. Negative reviews, media coverage, and public scrutiny can have long-lasting effects on a venue’s success.

• • Material Damage/Business Interruption: Coverage is provided for physical loss or damage to property and financial losses incurred because of the damage. Please click here for further information on this product.
  • Public & Products Liability: Public & Products Liability offers coverage for third party Personal Injury & Property Damage first happening during the Period of Insurance and caused by an Occurrence within the Territorial Limits in connection with your Business. Please click here for further information on this product.
  • Management Liability: Management Liability is a single insurance product comprising a suite of coverage sections. These sections include Directors & Officers Liability, Employment Practices Liability and Statutory Liability. Coverage is provided for events such as unfair dismissal of an employee, workplace discrimination and inquires brought by regulatory authorities. Please click here for further information on this product

In Australia, the duty of care for hospitality licensees is a critical aspect of operating a safe and compliant venue. By understanding the obligations under common law and statutory regulations, and implementing a framework to comply, licensees can effectively manage risks, ensure the safety of their patrons, and avoid legal and regulatory repercussions.

Through diligent risk management, responsible service practices, and ongoing employee training, hospitality licensees can fulfill their duty of care and contribute to a positive and secure experience for all who visit their establishments.

Bellrock has significant expertise in advising on hospitality risk and provides services to a wide range of hospitality clients. This includes hotels, pubs, club, restaurants, community associations and clubs. Bellrock understands the challenges faced by the industry. Bellrock can assist with navigating complex insurance products & placements, ensuring compliance with regulations and assisting in the mitigation of risks. With the help of external experts, we can conduct a thorough review of your current programme and provide our recommendations to ensure your risk needs are met.

A comprehensive risk management plan that addresses and mitigates risk exposures will further benefit licensees when procuring insurances. Demonstrating that a licensee is mitigating risks for claims for compensatory damage, property damage and business interruption and breach of its statutory obligations is essential to assist with minimising frequency and severity of claims, incentivising insurers to provide cover and minimise insurance costs.

For further information and advice relating to your risk management needs, please contact us via the form below.