As restaurants embrace new technologies to drive efficiency and enhance the guest experience, they’re also opening the door to new forms of cyber risks. The challenge for restaurant operators today is clear: how to reap the rewards of digital innovation while protecting against the operational and financial disruptions that can come with it.
Technology: The New Backbone of the Restaurant Industry
Technology is no longer an add-on to restaurant operations — it’s the foundation. From connected kitchen sensors to digital ordering systems and contactless payment solutions, these innovations streamline workflows, improve safety, and deliver faster, more personalized service.
But as a restaurant’s digital footprint expands, so do its exposures. Every new connected system adds another potential entry point for cybercriminals or operational failures. Unfortunately, many operators still view technology as a back-office issue rather than a critical business function that affects every area of their operation.
The reality is that managing restaurant technology is not just an IT responsibility — it’s an operational imperative. A single system outage or cyberattack can trigger a domino effect of business interruption, reputational damage, and financial loss that even comprehensive insurance may not fully cover.
The Expanding Digital Ecosystem — and Its Risks
The modern restaurant’s digital ecosystem has evolved far beyond traditional point-of-sale (POS) systems, which are now used by 97% of restaurants. Today’s technology-driven operations include:
- Digital ordering platforms such as kiosks, mobile apps, and QR code menus.
- Smart kitchen devices that monitor food safety and equipment performance.
- Integrated data systems that manage loyalty programs, scheduling, and security surveillance.
While each innovation enhances operations, it also introduces new vulnerabilities:
- Mobile ordering platforms expand customer convenience, but third-party app breaches can expose customer data outside the restaurant’s control.
- Smart kitchen alerts help maintain food safety, but ignored or malfunctioning sensors can lead to costly liability claims.
- Surveillance systems can provide valuable evidence, but unaddressed footage showing unsafe conditions can increase legal exposure.
- Loyalty programs deepen customer engagement, yet they store personal information that’s a prime target for cybercriminals.
With so much sensitive data circulating through interconnected systems, restaurants are increasingly targeted by hackers seeking quick financial gain. Ransomware attacks that lock down business systems and demand payment for restoration are becoming more frequent — and more expensive. The average cost of a cyberattack now exceeds $3.3 million, encompassing ransom payments, recovery expenses, and reputational harm.
Getting Ahead of the Cyber Risks: A Proactive Approach
To protect against these evolving threats, restaurants must approach technology and cybersecurity as integral components of their broader operational risk management strategy. This means taking a multi-layered, proactive approach that includes vendor oversight, staff preparedness, and incident response planning.
1. Vet technology partners and contracts carefully.
Before adopting any new software or platform, understand the fine print. Who bears responsibility if a breach or system failure occurs? Contracts should grant the restaurant the right to audit vendors, receive prompt breach notifications, and confirm that vendors maintain adequate cybersecurity controls. Building redundancy across systems can also help ensure that if one technology fails, operations can continue elsewhere.
2. Strengthen internal protocols and continuity planning.
Staff should know how to respond when systems go down or data breaches occur. Conduct tabletop exercises for potential scenarios, such as a POS outage during peak dining hours or a loyalty platform compromise. Ensure teams are trained to pivot to manual operations when needed to maintain service and protect revenue.
3. Provide tailored cybersecurity training.
Employees play a crucial role in preventing cyber incidents. Front-line workers, such as servers or shift managers, should receive brief, accessible safety refreshers that can be completed during shift changes. Managers and administrative staff should undergo deeper training on identifying phishing attempts, securing passwords, and reporting suspicious activity.
Cyber Insurance: A Critical Safety Net
Cyber insurance has become an essential layer of protection for restaurants, helping cover breach response costs, system restoration, regulatory penalties, and even public relations support. The right policy can make the difference between a temporary setback and lasting financial damage.
Yet despite the increasing frequency of cyber incidents, many restaurant operators still rank cybersecurity as a lower priority. According to the National Restaurant Association, a significant portion of restaurant owners underestimate both the likelihood and cost of a cyberattack. Those who adopt cybersecurity best practices — from regular patching and backups to vendor audits — not only reduce risk but may also qualify for better insurance rates and broader policy terms.
Partnering for Protection
Working with an experienced insurance advisor is one of the most effective ways for restaurants to strengthen their technology risk management strategy. A qualified broker can:
- Assess existing cyber and operational exposures.
- Identify potential coverage gaps in current insurance programs.
- Connect restaurant owners with cybersecurity experts and resources.
- Help structure a risk management plan that supports both innovation and resilience.
Technology has transformed the restaurant industry, enabling operators to serve guests faster, smarter, and more efficiently than ever before. But as digital systems become more central to operations, the risks they introduce become equally critical to manage.
By approaching technology as a shared operational responsibility, training employees to act as the first line of defense, and aligning with expert advisors, restaurant owners can protect profitability and customer trust — while continuing to innovate with confidence.
Speak to your insurance advisor to learn more about implementing effective emergency and crisis management plans that include detailed carbon monoxide exposure prevention measures, as well as strategies for recovery. Learn more at https://www.hubinternational.com/industries/hospitality-insurance/restaurant-insurance/