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How Food Liability Insurance Protects Your Business

by Hassan Ali

Whether you own a five-star restaurant or taco truck, you need liability insurance to protect your business and reputation from various risks. Food liability insurance can cover property damages, food spoilage, and legal suits from your customers, suppliers, and partners. Here’s how food liability policies protect your business and why you need it:

Pays for Lawsuits

Food liability coverage can pay for lawsuits and claims from your clients. General liability insurance will cover common risks, including customer injuries, customer property damage, advertising injuries, and host liquor liability.

If someone falls and breaks a bone in your restaurant, the general liability insurance will pay for their medical bills. The insurance will cover property damages like broken phone/jewelry, libel, slander, and copyright infringement.

Lawsuits from customers can set your business back thousands of dollars, especially if you’re liable for the injury or property damage. You can purchase different policies to cover all possible liabilities.

If someone gets an upset stomach because of contaminated food, the insurance will cover their medical bills and other claims. The liability insurance pays for lawsuits against your business by customers and suppliers.

Covers Property Damages

You can purchase policies to protect your business property in the event of a fire, storm damage, or other incidents. Restaurants and food industry companies need to protect the building and its assets.

The insurance will cover damages to your floors, roof, furniture, equipment, appliances, auto, and other business assets. You’ll need to purchase commercial property insurance to cover your assets. General liability policies don’t cover business property.

Commercial property insurance can repair or replace damaged property. The insurance covers damages caused by vandalism, arson, or other featured events. Make sure you review the policy to see what property damages are covered. The best solution is to purchase a business owner’s policy (BOP), which combines general liability and commercial property insurance.

Pays For Spoilt and Contaminated Food

Restaurants and other food service industries can suffer huge losses when food and beverages go bad. Food can spoil because of a power outage or contamination that renders the refrigerators and freezers useless.

Spoilage insurance covers the cost of replacing food and drinks that have gone bad. Purchasing food liability coverage can pay for spoilage as well as expiration, which can be beneficial during low seasons.

You can purchase food contamination insurance to cover the cost of replacing contaminated food and cleaning restaurant equipment. Contamination can result in sickness and lawsuits against the business.

Your equipment may be rendered unsafe and require thorough cleaning to sterilization. Food liability policies will pay for the contaminated/spoilt food and equipment sterilization, while general liability will cover lawsuits from affected clients.

Covers Workers Compensation and Dishonesty

Most food service businesses have employees who can get hurt in their line of duty. If your employee cut or bruises themselves while preparing a meal, your business is bound to pay for their treatment.

Workers compensation insurance is a type of food liability policy covering injury to your workers. Such policies will cover burns, bruises and other harms suffered while the employee is preparing or serving meals or cleaning the facility.

Food liability coverage can pay for employment practice liabilities, including racial and gender bias claims. Other covered liabilities include employee dishonesty, which reimburses the losses suffered when an employee steals from the company. Worker’s compensation and employee dishonesty can cost the business a lot of money. They are unpredictable, so you should be prepared to avoid paying from pocket.

Pays for Business Interruption

Food service businesses may be forced to close operations due to contamination, lawsuits, or compliance issues. No income is generated when the company closes down, but employees may be entitled to remuneration according to their contracts.

If you don’t pay the employees, they’ll be poached to other companies, leaving you with less-experienced personnel when you reopen the restaurant. Food liability policies can cover the cost of business interruption.

The coverage will pay for basic costs, including salaries and rent. Food liability policies can cover the cost of replacing personnel. Various factors can interrupt your business, including natural disasters, vandalism, change of location, sanctions, upgrades, and more.

When interruptions occur, the insurance kicks in to take care of the basic expenses and prevent the business from closing. The coverage verifies that there is business continuity after the interruption.  

Reliable Food Liability Insurance

Your food service business needs insurance to cover different risks and lawsuits. Beverage stores, catering companies, food vendors, food trucks, public catering companies, and food delivery businesses face risks. Insurance policies can cover different risks to prevent your company from paying out of pocket. 

When looking for food liability insurance, choose reputable companies. Review your food service business risks and purchase policies that offer the best protection. Contact a provider today to get coverage for your restaurant.

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