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

How Much Does Restaurant Insurance Cost? Restaurant Business Insurance

When new restaurant owners start out, they are always concerned about the cost of business insurance for their restaurant. You may be asking the question, how much does restaurant insurance cost?

Unfortunately, there is no simple answer to this question. Every business is different and so is every restaurant. Insurance is as individual as the business it covers, and only a qualified agent who specializes in restaurant insurance can give you an actual number after they have thoroughly reviewed the operation.

There are many factors that go into the cost of restaurant insurance. To list a few:

1. What are the annual gross receipts?
2. Is alcohol served on the premises?
3. Does the restaurant offer delivery services?
4. What about catering?
5. How large is the building and how is it constructed?
6. Does the restaurant own or lease the building?
7. What type of food is being served?
8. Are there special cooking methods that could be a risk factor, such as table top cooking?
9. Has the restaurant had any claims?
10. How many employees work there?
11. How long has the restaurant been in business?
12. What kind of risk management and safety programs are in place?

These are just a few items that determine the cost of your restaurant insurance. If you would like an accurate quote, please call our restaurant insurance specialists at (949) 756-4100.

Invensure is located in Orange County, CA and insures restaurants in Southern California.

Restaurant Insurance 101: The Basics of Business Insurance

Does a liability policy cover every incident? Of course not, but you can mitigate your legal risks by making sure you have the right policies in place. Here are the most common policies that your business will need to cap your legal and financial exposure:

General Liability (GL). This is the most common type of business liability policy. GL covers injuries caused to others, damage to the property of others, and may cover personal and advertising injury coverage, such as incidents caused by libel or slander. Many of these policies include products liability, which covers defective products that might cause injury or property damage.

Employment Practices Liability (EPLI). EPLI insurance is becoming more and more necessary for employers, both large and small alike. EPLI provides protection against employee lawsuits such as discrimination, sexual harassment, failure to employ, and many others. This coverage generally does not pay for punitive damages, but instead will pay for the company’s legal costs associated with a covered lawsuit.

Errors & Omissions Coverage (E&O). Also known as malpractice insurance, E&O provides coverage to individuals and firms who provide a certain expertise and counseling to their clients. When a professional receives payment in exchange for services, they are held to a high standard by both the client and the legal system. Although incidents are not common, when they do happen they are very costly.

Directors & Officers Liability (D&O). This type of insurance is taken out to protect legal action against directors and officers of a company. Any firm that has a board of directors, such as privately held companies, non-profit organizations, and homeowners associations, need this coverage. Anyone serving on a board without this coverage is putting their own personal assets at risk. Legal action against Directors and Officers can come from competitors, government agencies, creditors, employees, stockholders, and other third parties.

Auto Liability. A business should not neglect getting Auto Liability even if they don’t own any vehicles. If an incident happens during working hours and the injured employee was using their personal vehicle for business use, the business may be named as a party to legal action on any injury or property damage that may occur. If the business is using personal vehicles on the job full time, it is probably best to have those insured under the company to make sure the company has coverage against legal action due to an automobile incident.

Specialized Insurance for Restaurants and the Food Industry. In addition to the basics mentioned above, there are many policies that pertain specifically to the food industry. For example, food spoilage coverage, food contamination, food product liability, equipment breakdown, valet coverage, crime, flood, liquor liability, and mold are just a few that are important to most restaurants. Depending on your specific business, the types of coverage you need will vary.

Each business is different, which is why it’s so important to review all potential exposures with your agent to determine if any of these exposures can be covered by insurance. A business owner truly gets a great bang for their buck when having these liability policies because as mentioned earlier, you are dealing with experts who know how to leverage their expertise most effectively.

These types of insurance policies also bring more certainty to your business, the premium is all you pay, you have no worries of losing your business or facing significant setbacks due to spending tens or hundreds of thousands of dollars defending and paying claims that most people have no idea how to handle.