Food Business Insurance

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What is food business insurance?

The food industry comprises of several businesses, such as restaurants, bars, hotels, and caterers. According to Forbes, the National Restaurant Association estimated the food industry sales to reach $1.2 trillion by 2030. Given how diverse the food and beverage business is, it is equally prone to face different types of risks. A quick yet severe cut, to a skin burn from hot grease, business owners can be liable to such risks. Some of the types of risks businesses can face are:

Customer Injuries

A waiter is in a rush to serve wine for a waiting table. Unfortunately, the waiter trips and spills the wine all over a customer; worse – the glass cuts the customer. For a situation as unpredictable as this, business owners should prepare themselves with the restaurant insurance on their menu.

Food Spoilage and Contamination

Once famous for its grilled BBQ, suddenly ‘ABC’ food truck is now known for delivering contaminated food. Solution? Swerve such situations with food truck insurance. For example, KFC was sued for cooking chicken in a type of oil that could result in heart disease, according to NBCNews.

Property Damage

Just before the pack up of a birthday event, one of the caterers accidentally dropped a heavy pan on the host’s antique table, leaving a stained mark on it. If you want to end the event on a good note, catering insurance should be your go-to thing.

Who needs Food Liability Insurance?

Be it a new restaurant or a five-star hotel, operating business in the food and beverage industry means mishaps are inevitable. Certainly, you would want your business to be atop the market. So, for this to come true, food industry insurance is a must-have.

Business insurance policies that commonly include food business insurance are:

Restaurant insurance
Food truck insurance
Hotel insurance (for hotels, motels, and caterers)

What policies does food liability insurance?

Here are some coverage options for your food-related business:

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Business Owner's Policy (BOP):

The three significant policies, i.e., commercial property, commercial general liability, and business income collectively make a business owner’s policy.

BOP helps to protect and provide coverages to the businesses in the food industry against any accidents. Consequently, these accidents include food spoilage, theft, vandalism, and burst pipes (or other weather damages).

Workers' Compensation Policy:

From a slip and fall on the worksite to reimbursing lost wages, workers’ compensation insurance covers all work-related employee damages. In other words, according to Investopedia, worker’s compensation insurance coverage provides compensation to the employees for workplace injuries.

Commercial Auto Policy:

A commercial auto insurance covers the cost of property damage, medical bills, possible lawsuits caused in case of an accident. This policy is a must if your business owns a vehicle.

Food trucks are always on the go. If the food delivery van gets into an accident, this policy helps to cover:

Legal charges: When your food van gets filed for a lawsuit.
Medical expenses: When your food truck supplies contaminated food to its customers leading to foodborne illness.
Collision: When your food delivery van gets into an accident.
Uninsured motorists: When your unlicensed employee uses the food van and meets with an accident on its way to delivery.
Non-collision damages: When your food van catches fire.

Commercial General Liability:

Commercial general liability insurance helps to cover third party property damage, bodily injury, and related lawsuits from business operations. This policy is also known as business liability insurance since it covers the business’ liabilities.

Businesses like restaurants have a lot on their plate, and accidents shouldn’t be one of them. But if an accident did happen – then commercial general liability helps to cover:

Customer injuries: When a heavy wooden pan falls off and hits your customer’s feet.
Customer property damage: When a wine gets spilled all over your customer’s handbag.
Advertising injuries: When your hotel’s brand logo unknowingly becomes the exact copy of your competitor’s slogan.

Liquor Liability Policy:

Liquor liability insurance covers the cost for the damages incurred by an intoxicated person served with alcohol. The policy is known as dram shop insurance since it protects business that sell or serve alcohol.

Your business can be responsible if a customer who got drunk in your bar another person. This policy provides coverages for:

Property damage: When a drunk customer hits another person’s car and leaves a dent on it.
Accidental injury: When a customer in a drunken state crosses the road and gets hit by a car.
Assault and battery: When a drunk customer pick a fight and severely injures another person.
On-the-job drinking: When your bartender drinks during the work-hour causing property damages to your bar.

Cyber Liability Policy:

Be it data breaches or network failures; cyber liability insurance covers all the financial losses that result from cyber-security violations.

The way how cyber-attacks have upscaled, any business can be a victim of cyber threats. According to NYTimes, companies are facing over $1bn loss on loyalty programs due to cybercrimes. To protect your restaurants/ hotels/ motels from being a target of the possible cyber-attacks, cyber liability policy is a must. This policy helps to cover:

Legal expenses: When your customer files a lawsuit for failing to prevent data hacks during the stay in your hotel.
Data breaches: According to BBC, McDonald’s delivery app in India leaked over 2.2 million users’ personal information.

Umbrella and Excess Liability Policy:

An commercial umbrella insurance acts as a roof for other liability policies. In other words, it extends the liability coverage over the primary liability policies. These primary policies are commercial auto, commercial property, and commercial general liability.

Commercial umbrella insurance is needed at times when your hotel’s or restaurant’s commercial property policies exceed the limit to cover the costs of certain damages incurred. Therefore, the policy acts as a safety net and aids in covering the remaining charges.

Pollution Liability Policy:

A pollution liability insurance covers costs incurred for bodily injury or property damage caused by a business’ waste materials.

So, if you don’t want your restaurant or hotel to face a pollution lawsuit, you should opt for pollution liability insurance.

Product Liability Policy:

A product liability insurance makes sure to cover any financial or legal damages caused by selling the product. It applies to all businesses that manufacture or sell products.

According to USAToday, in September 2011, a muslim patron filed a case against McDonald’s. The lawsuit claimed that the food chain did not meet Islamic requirements while preparing the food.

Commercial Property Policy:

Commercial property insurance helps to protect your business property and premises.

If your food truck hits another person’s car, commercial property will provide coverages for the damage done.

Employment Practice Liability (EPL) Policy:

An employment practices liability insurance (EPLI) is one of the forms of professional liability insurance. This policy deals against cases such as harassment, discrimination, or wrongful termination of employees.

For example, one of Starbucks’ employees filed a case against Starbucks, according to Foxnews. So, if your employee files a case against harassment that you did not commit, this policy helps to cover the legal costs related to it.

How much does food liability insurance cost?

Any insurance company considers the following factors that affect the cost of insurance.

The size of your business

Level of Risk

Value of the equipment

Do you want the best insurance policy quote for your food business? Get in touch with us today!