Whether you sell small-batch maple syrup, own a catering business, or run a pizza place, your food business is just that – yours. No doubt you want to protect the business you’ve worked so hard to build.
And if you caught our article last month, you know about the top risks your food business may face. So now let’s explore the insurance policies that can help you manage risk and lay a strong foundation for your future.
General Liability & Product Liability Insurance
General liability insurance is often the first policy business owners buy. It can address some common risks you may come across, including…
- Third-party bodily injuries (e.g., a customer slips and falls in your restaurant)
- Third-party property damage (e.g., a fire at your restaurant damages the building next door)
- Advertising injuries (e.g., you accidentally slander a competitor during an interview)
These situations may not be everyday occurrences, but you can probably imagine dealing with them at some point. That’s why general liability coverage is so handy. When an accident happens, and you’re sued over it, your policy can pay for your legal expenses, such as lawyer fees, damages you owe the injured party, and more.
Make sure your general liability policy includes product liability insurance, too. This coverage can help pay for your legal expenses if you’re sued over contaminated food.
Commercial Property Insurance / Business Owners’ Policy
No matter if you own a food truck, a coffee shop, or a gourmet popcorn shop, you rely on your culinary equipment. That means you’ll probably need commercial property insurance to cover…
- Commercial kitchen appliances
- Kitchen knives, pots, pans, etc.
- Computers / POS system
- Furniture
- Your commercial space if you own it
You can tailor this policy to fit your needs, too. For example, you can add spoilage coverage to this policy to recoup losses when your food supply is spoiled or contaminated. If you offer delivery services or catering, adding off-premise coverage can protect equipment or products that you transport to other locations. Caterers and food truck owners may want to add on inland marine insurance, which can protect business property that’s mobile or in transit.
Your business may also qualify for a business owner’s policy (BOP), a policy that combines property insurance and general liability insurance at a reduced rate. Ask your agent about it to see if you can save some money on your essential coverages.
Workers’ Compensation Insurance
Workplace accidents are fairly common in the food service industry. After all, employees regularly handle sharp kitchen equipment, work over hot stoves, or unload heavy boxes – activities that are ripe for injuries.
Workers’ compensation insurance can help out when employees are hurt on the job by paying for their…
- Medical bills
- Ongoing care, such as physical therapy
- Partial lost wages if they have to miss work
Most states even require employers to have this policy to make sure hurt employees are properly cared for. Check the laws in your state to see what’s required.
Even if it’s not required in your state, workers’ comp is a signal to your employees that you care about their wellbeing and their future with your business.
Cyber Liability Insurance
You might think that cybercrime only happens at major corporations, but in reality, hackers frequently target food businesses like yours. According to the Verizon Data Breach Investigations Report for 2017, that’s because food service businesses typically accept credit and debit cards but don’t have an IT department to monitor suspicious activity. This makes your POS system a tempting target for thieves.
If your system is hacked, it could expose sensitive customer information:
- Credit card or debit card numbers.
- Bank account information.
Every state has different rules on how data breaches need to be handled, but they typically require you to notify customers impacted by the breach. Cyber insurance can pay for these costs and…
- Legal expenses if you’re sued for the breach
- Credit monitoring services for affected customers
- Marketing and PR costs to help repair your business’s reputation
Considering how expensive data breaches can be, this coverage can be the difference between bouncing back from a breach and closing up shop.
Liquor Liability Insurance
Many states have dram shop laws that allow alcohol-selling businesses to be held liable for an intoxicated patron’s actions. So if you sell or serve alcohol or allow patrons to BYOB, consider purchasing liquor liability insurance.
This policy can protect your business if you’re sued over an accident or injury your intoxicated customer causes. For example, if your employees overserve a guest who later assaults someone, the victim of the attack can sue your food business over their injuries. Liquor liability insurance can help pay for their medical costs and your legal expenses.
In short, you can’t predict the future. But you can prepare for your food business’s continuity by planning ahead and investing in the appropriate insurance policies.
Ready to find the right policy for you? If so, get your free quote from Insureon today!
About the Author
Rebecca Hosley is a content writer for Insureon, an online small business insurance agency. She is based in Chicago and frequently writes about small business insurance on Insureon’s Food for Thought blog.
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