How Much Does Food Poisoning Insurance Cost for Restaurants?

Owning a restaurant can be an exciting experience. Serving people your creations and satisfying their palettes is the reason you got into this business.

Food can be such a comfort for people and when someone else is cooking it, it is even better. But what happens If somehow one of your customers ends up with food poisoning? You probably have procedures in place to avoid this, but unfortunately, contamination and other human errors can happen no matter how much you prepare.

If you end up getting sued because someone got sick, and with the litigious society we live in that is extremely likely, you need to have Food Poisoning insurance to pay for it. One claim with this type of issue can bankrupt your business.

Even if you did nothing wrong, the bad publicity alone can be enough to force you to close down. Food Poisoning insurance can help avoid this.

Food Poisoning insurance will cover the following when it comes to a covered claim.

• Bodily injury including medical expenses – If the food is contaminated and a customer, or several, gets sick then you will be able to pay for their doctor or hospital bills through this policy. Additionally, if it causes major issues from being something like E. coli, you will probably be sued. The limit on your policy will be the maximum limit you can use, so be sure to pay attention to that.

• Defense costs including judgments – A huge cost when it comes to claims is defense costs. The court fees and lawyer fees can add up quickly, putting a huge strain on the business. General Liability will cover these costs. Be sure to know if the defense costs coverage is included in the liability limit, or if it is in excess to it. This is important information since they can add up so quickly. If you end up having to pay a judgment in addition to paying the lawyer and court fees, you want to make sure you have enough coverage limits.

Because restaurants face more issues than just food, Food Poisoning insurance is not the only policy you will need. The risks that come along with owning and operating a restaurant are abundant, but luckily the insurance industry has developed an answer for most of them.

• General Liability - Besides food poisoning or contamination, there are some other claims that are high frequency when it comes to the food services industry. Slips and falls by customers are one of these, which would be covered under General Liability. Another claim that is starting to become more and more common is property damage, also covered by General Liability.

You will never believe what for though. Cell phones. People like to show off their photos, or use coupons that have to be scanned by the cashier. Unfortunately, people are in the habit of taking the phone from the customer, and that increases the risk of it being dropped, and therefore your business will be responsible to repair or replace it. It is probably a good idea for you to tell your employees not to handle the personal possessions of the customers.

• Commercial Property - Of course, if you own the building you operate your restaurant out of you will need to insure the structure for covered perils such as fire, wind, and lightning. Even if you rent, what about all the stuff inside? Tables, chairs, utensils, cooking equipment, and even cash registers are all things that can be insured under Business Personal Property coverage under a Commercial Property insurance policy. In order to save some money though, try to bundle both General Liability and Commercial Property together into a BOP, or Businessowner’s policy, or a Commercial Package policy. Which one you can purchase will depend on the size and needs of your business, so be sure to work closely with an experienced agent.

• Business Interruption - Let’s say you do have a fire, which is already such a devastating event to deal with a business owner, and you have to shut down for a period of time. During that time your mortgage company or landlord, vendors, and employees may still expect to get paid. While they will probably be sympathetic, they still have their own bills to pay. Business Interruption, or Business Income, insurance will provide you with your lost income during the time you are attempting to get back up and running. Of course, this will not be an indefinite benefit and usually comes with a limit of either 12, 18, or 24 months. Also, be aware that there will be a waiting period of 24-72 hours. The longer the waiting period and shorter the benefit period, the more affordable the coverage will be, although it is not expensive at all.

• Commercial Umbrella - Since the food service industry is a pretty risky business you want to make sure that you have enough coverage for all of those unforeseen incidents. Most of the insurance policies you acquire will have a standard liability limit of $1,000,000 per occurrence. This includes General Liability and Auto Liability. While it may sound like a lot, an incident such as a child being burned by a hot drink can cause a catastrophic loss to your business and often the court costs and judgments can add up quickly to be more than that standard limit. Umbrella insurance can provide your restaurant with an additional limit of liability top tap into if one of these terrible instances happens. Avoid bankruptcy and having to shut down your business by purchasing an Umbrella insurance policy.

• Cyber Liability or Data Breach Liability - Your restaurant certainly uses some sort of point of sale service to take credit and debit card payments. Because of technology and how dangerous it can be, there have been instances where credit card information has been stolen via a point of sale system. If this happens and it gets traced back to your restaurant it can be detrimental. Not only can Cyber or Data Breach Liability pay for losses associated with this type of claim, but it can also help to restore your name with the public if that becomes an issue.

• Commercial Auto - Do you do any food delivery? Do your employees have any job duties that require them to use their own vehicles like delivery or bank deposit runs? If any of these scenarios apply to you, or you own any vehicles in the business name, you should have Commercial Auto insurance. Your Personal Auto will exclude any claims involving your vehicles that are being used for business. Additionally, your employees that use their vehicles for work purposes can put your business at even more risk. Hired and Non-owned Auto Liability coverage on this policy will protect your business if they are at fault in an accident.

Coverwallet has a team of educated insurance representatives that are ready to help you with the hassle-free quote process. Discuss your unique situation with us and allow our agents to help you obtain multiple quotes so you can make the most informed decision for your business.