Published On: May 17, 2022

Before you start a food truck or restaurant, you’ll need to take steps to protect yourself and your business. Food liability insurance covers you in case your customers get sick after eating your food. It also covers food lost due to recalls. Keep reading to learn more about this kind of insurance and why you need it for your business.

What Is Food Liability Insurance?

Food liability insurance covers the food products you serve to your customers. It’s also referred to as product liability insurance. These policies protect your business from lawsuits related to the food products you sell. If you’re lucky, food liability is covered under your general liability policy. If not, you can work with an insurance agency like Tabak Insurance. We’ll help you find a policy that works for your business.

Here are a few scenarios where you will need food liability insurance:

1. Your Lender Requires It

Small business loans are a great way to get your restaurant or food truck off the ground. Your lender will have some demands before you can access your loan. They need to know that you are protecting their investment, and will likely require you to carry liability insurance. Your lender will not approve a loan without considering the risk that goes along with it. If you are sued by a third party, liability insurance covers your lender’s investment and prevents a total loss.

2. Your Landlord Requires It

Your landlord will have an outline similar to your lender’s. They will likely require you to carry general liability insurance at the bare minimum. Carrying food liability insurance shows good faith to your landlord. It indicates that you plan to uphold food safety laws and are responsible in other areas of your business.

3. Buying Fresh Produce Has Risks

As a restaurant owner, you become a central figure in your city or town. You can invest back into your community by building partnerships with farmers in your area and buying local produce. This has great benefits for you, the farmers, and the people in your town. Everyone gets to enjoy fresh food, and the money you spend stays in the local economy. 

Note that buying produce from farms can be tricky depending on the weather and season. Drought or insects can cause crops to fail with little warning. If you’ve contracted with a local farm and they are unable to deliver their produce, you may not be able to serve your customers. The farmer in this case is hopefully covered by product liability insurance. Their insurance company will compensate you for products not delivered.

If produce is recalled, you could be in a similar position. Recalls can have broad effects nationwide on the ease of getting produce. Not only is it expensive to throw away food that has been recalled, but you also need to pay to replace it. The produce you purchase to replace what is lost is more expensive now because of the low supply, due to the recall. Food liability insurance can help you cover these costs. 

4. You Need To Protect Your Business From Lawsuits

The goal of a chef is to serve delicious meals and not make anyone sick. If the proper steps are taken, almost all cases of foodborne illness can be avoided. However, accidents happen, which is why business owners should carry food liability insurance. 

An unlabeled allergen that sneaks into a meal can cause your customer to have an allergic reaction. Ambulance rides and epinephrine are not cheap. Not only are these very expensive medical emergencies, but they are also distressing for the person and their family. The symptoms of an allergic reaction are serious and people can die as a result. The person or their family may sue to cover their hospital bill. Without insurance, you may have to pay for these fees.

Luckily, very severe allergic reactions are rare, and when the proper steps are taken, can be avoided entirely. The same is true for foodborne illnesses. It is a chef’s job to make sure that food is stored and washed properly before serving it. The most common pathogens that hitch a ride on food are E.coli, salmonella, and listeria. Most people will only experience mild discomfort or food poisoning symptoms. Others may experience severe symptoms that send them to the hospital, and some people may die as a result of foodborne illnesses. 

While this is a worst-case scenario, there is always a risk if food safety is not taken seriously. You must prove that you follow food safety laws. Your staff may be required to take a course on food safety and storage. You will also be asked to demonstrate that the coolers and warmers you use to hold food are at the proper temps. 

5. You Need to Repair Your Reputation

If the worst has already happened, and the food you served accidently made your customers sick, your business can suffer. Word of mouth is a great marketing strategy, but it can impact you in negative ways too. If word has gotten around that your restaurant is making people ill, then you may need to consult with a brand consultant to rebuild your restaurant’s image. 

You will need to strategize ways to earn back the public’s trust. This may require a rebrand, new advertising strategies, or a coupon campaign to get your customers back in the door. While working with brand consultants is an expensive investment in your business, it may be worthwhile if your insurance company will cover the cost. Ideally, by working with a company like Tabak Insurance, you will be covered for future potential food-related mishaps.

How Can I Get Food Liability Insurance?

Before an insurance company will grant you a policy, you’ll need to prove that you can uphold food safety standards. You may even get a lower rate if you follow their guidelines. For example, if all of your staff have a food handling certificate, this indicates to your insurance company that mistakes with food handling are less likely to occur. Keeping good temperature logs is also evidence that you uphold food safety standards.

If you don’t have food liability insurance, it’s time to contact an insurance agent to learn more about the best policies for you. At Tabak Insurance, we specialize in the food and liquor industry. Our agents are trained on the ins and outs of this business, so we can get you an accurate quote that covers all your needs. Contact us today to get a personalized rate.

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