21 Aug 2020

Restaurant & Food Industry Insurance

Whether you run a coffee shop or a full-service restaurant, it’s important to know the type of restaurant and food industry insurance your business needs. The needs of the restaurant and food industry in insurance are widely varied and depend on a number of variables. We will explain below which kinds of insurance are most important.

fork, knife, spoon images symbolizing the restaurant and food industry insurance

Food & Beverage Insurance

Restaurants are exposed to a wide range of risks that make them vulnerable to lawsuits and other liabilities. Kitchens can be dangerous, food can go bad, and the large numbers of people that visit restaurants are all risk factors. Restaurant insurance protects against these types of risk and helps prevent financial situations that are impossible to overcome. Our team of experts at Diversified Insurance Group can help you find dependable coverage so you can concentrate on what matters most – your food and customers.

Each restaurant has its own unique qualities that expose them to different types of risk. For this reason, the cost varies from business to business. Common factors that influence your rate include the types of food you sell, cooking methods, and your building and employees, to name a few. For example, a small coffee shop with limited cooking can expect their insurance cost to differ from a large tavern with a bar and full-sized industrial kitchen with fryers and ovens.

garden salad in regards to food and restaurant industry insurance

Food Borne Illness Insurance

No matter how careful you are or how strict your food handling protocols are, mishaps can happen and there is always a possibility that someone could become ill after eating your food. According to the Centers for Disease Control, approximately 48 million people get sick from a foodborne illness each year. Of those, 128,000 are hospitalized and 3,000 die. Most of them are infections, caused by a variety of bacteria, viruses, and parasites.

If one of your patrons becomes sick from the food you serve and is injured, you could be found liable, which is why it is essential to carry food and beverage insurance. Foodborne illness claims are among the greatest financial risks facing the food industry. Following a contamination event, companies often find themselves in the crosshairs of aggressive lawyers and substantial losses. At times like this, insurance is a critical risk management tool.

raspberry tarts from a restaurant

Insurance is a management tool

Food and restaurant insurance is a management tool that all companies in the food industry should employ to protect themselves against the risk of food contamination claims. However, recent lawsuits involving disputes over insurance coverage for food contamination losses show that executives at food companies can and should do more to protect themselves against the risk of an uncovered claim. A well-designed policy should include coverage for “voluntary recall,” “foodborne illness” and “reputational harm.” Food contamination claims are excluded coverage under standard commercial general liability or commercial property insurance policies. Coverage determinations are fact-specific and driven by policy language. The manner in which a claim is characterized when submitted to an insurer can often be the difference between a covered and an uncovered claim.

a plate of pasta ready to serve at a restaurant

Diversified Insurance Group is a regional insurance broker that is small enough to know its clients by name and large enough to insure clients with worldwide operations.

Key Diversified Statistics:

  • Food & Beverage Brands Served: 12
  • Insured Locations: 328
  • Insured Employees: 12,000

Managing the unique risks of the restaurant world

  • Miscellaneous Professional Liability
  • Food Borne Illness
  • Employment Practices Liability & 3rd Party EPL
  • Cyber / Data Privacy
  • Crime
  • Active Shooter / Workplace Violence / Crisis Management
  • Liquor Liability
  • Fleet Safety Programs
  • Workers Compensation
  • Contractual Risk Transfer
  • Suppliers – Food & supplies
  • Vendors – Staffing, cleaning & maintenance
  • Landlords – Slips & falls due to a failure to maintain property
  • Security & Surveillance
  • Employee
  • Customer

As shown above, there is a wide variety when it comes to the food and beverage business. Diversified Insurance Group has experience managing the risks for everyone from coffee shops to nationwide restaurant chains. If you would like to talk to someone at Diversified about your insurance needs, go here.