Why Food Product Liability Insurance Coverage Will Save Your Food Business from Bankruptcy

If you want to protect your food business from the financial damage of a lawsuit, food product liability insurance is essential. Food can easily spoil or become contaminated at many points through its life cycle. From being contaminated at the farm where it grows (as in recent e. coli outbreaks), to its storage, transportation, manufacture, and preparation there are multiple points of contact where a problem can occur.

Food Product Liability Insurance Can Save Your Business if You are Sued

You can use all the care in the world in your process, but if food you receive is contaminated with bacteria, you could be held liable if someone gets sick.

Even when food safety and hygiene is a priority in the operations of your business, there is always a chance for an error that can expose you to a lawsuit. Even if you do everything right, you could receive a shipment of contaminated food and pass on that on to a consumer, in which case you may be liable, even if you did nothing wrong.

Common bacteria that cause foodborn illness are e. coli, listeria, mad cow disease, and salmonella. If the food is not refrigerated or processed properly, the end product can cause illness or even death to those who consume it.

Food labeling is also another serious issue that can lead to lawsuits if it is not done properly. Not only can the food company be sued for improper labeling or mislabeling, the organizations using those food products can be liable for lawsuits as well.

Many people suffer from food allergies, and can become seriously ill or even die if they eat the wrong thing. Common food allergies include: peanuts, tree nuts, shellfish, lactose, and wheat gluten. If food is not labeled properly, such as “processed in a plant that contains peanuts,” a lawsuit can ensue.

If a food manufacturer, farm, or restaurant causes a consumer to become ill, they can be sued and be held liable. The cost of legal defense is extremely high, and monetary rewards or settlements out of court can be astronomical. Food product liability insurance will cover costs of a lawsuit, and protect the financial well being of the company sued.

Invensure has experts on staff that can help you determine what amount of coverage you need. We have been serving Southern California for over 35 years, and have agents who work exclusively with restaurants, food manufacturers, and distributors.

Call today to learn more. (800) 331-4700

Food Liability Insurance. What is it and why do you need it?

When you are producing food for the public, it doesn’t matter if you serve it in a restaurant, a café, or plan to sell it in stores or at a farmers’ market. If someone gets sick from the food you make, you could be liable for the cost of their medical expenses, or worse, if you get sued on a mass scale by a number of individuals who became ill.

To protect yourself, food product liability insurance is a must. There are several different forms of this type of insurance including product liability insurance, food contamination coverage, and food recall coverage, to name a few. These forms of coverage would be in addition to your regular liability or umbrella insurance policies.

Even if you do not have your own restaurant, kitchen, or bakery, and are producing food in a facility that you rent, most commercial kitchens will require you to have insurance. Also, if you are manufacturing food for distribution, most major retailers will require that you have suitable insurance before they will make a deal with you. Farmers’ markets generally require vendor liability insurance.

Food liability insurance is relatively inexpensive, and will vary depending on the type of food you are producing and how you plan to distribute it. For example, most baked goods and items that do not require refrigeration are generally considered lower risk. On the other hand, food products that are considered specialty health products (gluten-free, organic, etc.) can be a higher risk.

In general, the cost of your insurance will be related to the risk you are assuming and will be affected by the following factors:

• the amount of products you sell or supply
• quality control and safety measures in the manufacturing process
• where the manufacturing is located
• type of product and the specific market for that product
• your insurance history and any loss claims

Food product liability is a complex subject and you should only work with an expert who has a lot of experience in the food industry. A common mistake made by food producers is to try and find the insurance they need for themselves, or worse yet, use a friend who has little experience insuring for the food industry.

Invensure has a complete program for the food industry in Southern California. Call (800) 331-4700 and ask for Vicki, the food industry specialist.