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

Restaurant Business Insurance: A Basic Outline of Coverage

Restaurant business insurance is so specific that you could be leaving yourself liable for thousands of dollars in damage if you do not work with an agent who specializes in insuring restaurants. Many owners are either too busy or unfamiliar with insurance they do not know how important this is.

Recently, we handled a case where a restaurant owner got his business insurance through a family friend. In an effort to save the owner money, the agent dropped a few vital coverages during the renewal. There were two incidents when the owner had to contact the insurance company because of a loss. Imagine the owner’s surprise when he found out that he was not covered and had to shell out over $100,000!

Restaurant Business Insurance: Most important, work with a specialist!
We cannot stress enough how important it is to work with a qualified agent who is experienced in working with restaurants. Call (949) 756-4100 and ask for our restaurant business insurance specialist.

In the meantime, here is some helpful information about restaurant business insurance. This is by no means a complete list and there are many exceptions and nuances to the brief descriptions supplied below. Your restaurant business insurance specialist can help advise what limits you need and which coverages apply to your restaurant specifically.

Insurance Specific to Restaurants and Food
Several types of insurance coverages are made specifically for the food industry. Depending on the type of restaurant you have and the volume you sell, your insurance agent will help you get the appropriate coverage:

  • Food Product Liability – Protects you in the event that your food causes injury to the user.
  • Food Spoilage Coverage – Covers you in the event that your refrigeration equipment breaks down and you lose your food as a result.
  • Food Contamination Coverage – Covers you in the event of food poisoning or communicable diseases transmitted by an employee.
  • Food Product Recall Coverage – If you sell food products and they are recalled, your expenses are covered.
  • Equipment Breakdown Coverage – If your pizza oven (for example) goes on the fritz and you lose business as a result, this is how you are covered for your loss. Similar to:
  • Business Interruption Coverage

Only a qualified agent can help you determine exactly which policies you need to help protect your business.

Insurance for the Restaurant Building
Like other business insurance policies, you will need insurance coverage for your property.

Workers’ Compensation Insurance
Even if you only have one employee, in California you are required to have Workers’ Compensation Insurance.

Valet Coverage – If your restaurant has a valet service, this protects the customers.

Liquor Liability – An absolute necessity if you serve alcohol.

Bailee Coverage – Protects your customers’ property.

Cyber Crime Insurance – If your restaurant offers online ordering with credit card transactions or payment by smartphone, you would need this.

Crime Insurance – To protect yourself from employee theft, among others.

Non-owned & Hired Auto – Do you have delivery drivers? If so this coverage will protect your business in the event they cause an accident on the job.

Employment Liability Practices Insurance (EPLI)
In California, about 60% of restaurant owners face employee lawsuits. California has complicated wage and hour laws and the hours that restaurant employees work is unpredictable and hard to control. Restaurant owners need this coverage to protect themselves financially in the event of a lawsuit.

Only Work with a Restaurant Business Insurance Specialist
You want someone who thoroughly understands the restaurant business. Make sure you only work with an agent who has years of experience in your industry.

Invensure specializes restaurant business insurance for Southern California. Call us if you have any questions or if you would like a no-obligation quote.

Call (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.