Food Spoilage and Food Contamination Insurance—Who Needs It?

In any small business there are many things that can go wrong, but for the owner of a restaurant, bar, catering business, or food manufacturer, a potential and serious problem is food spoilage or contamination.

Losing perishable food can quickly become expensive. Being shut down because you have served contaminated food can not only be costly, but also it can ruin your restaurant’s reputation, which could ultimately close you down for good.

Food spoilage and contamination insurance is a sensible “add-on” coverage for any restaurant or food-related business as part of an overall restaurant insurance policy.

Food may be spoiled because of a power outage or equipment failure. Food Spoilage Insurance will help with the cost of replacing perishable food and beverages lost as a result of such breakdowns. Depending on your policy you may be required to have service contracts in place in order to prove the previously good working order and maintenance of failed equipment. As well as paying for the cost of disposing of and replacing food, your food spoilage insurance may also help with the costs of repairing the mechanical breakdown itself at your restaurant.

It is worth remembering that food spoilage insurance will only cover perishable stock located at the insured premises and, like all restaurant insurance, will be subject to a deductible. But, in comparison to the potentially high cost of replacing all the food in a failed walk-in freezer, for example, having such insurance is essential for any restaurateur.

While similar to Food Spoilage Insurance (and often written into the same policy), Food Contamination Insurance covers different issues. Food may become contaminated not because of an equipment or power failure, but because of improper handling or storage, the inadvertent transmission of a virus or bacteria by a restaurant employee, or it may be delivered contaminated by, for example, bacteria such as E. coli or salmonella. Whatever the cause of the contamination, the financial consequences can be catastrophic to your business. But with Food Contamination Insurance, the associated costs can be dramatically reduced.

Food Contamination Insurance will typically cover the costs of replacing food, cleaning the premises, loss of earnings because of a temporary shutdown, medical testing of employees, fighting legal claims from affected customers, and marketing and advertising efforts to repair a damaged reputation.

When providing Food Contamination Insurance, an insurer may require proof of best food-preparation and -handling practices, as well as evidence of suitable employee training. And, as a restaurant owner, you will want to be familiar with any state or local requirements.

Like so many things in life, food spoilage or contamination can happen suddenly and when you least expect it, but if you have the correct restaurant insurance, a potential tragedy can be reduced to little more than an inconvenience.

Contact Vozza Agency for restaurant insurance in New Jersey.