In 2012, the U.S. Centers for Disease Control and Prevention (CDC) estimated 48 million instances of foodborne illnesses occur each year resulting in 128,000 hospitalizations and 3,000 deaths making it especially important for the specialty food shops to carry product liability insurance.
Let’s say you own a cupcake business and a customer becomes ill after eating a contaminated Red Velvet cupcake you sold them and they end up in the hospital. Their medical costs will be covered by product liability. Product liability coverage is typically bundled together under a general liability insurance package.
What Does General Liability Insurance Cover?
General Liability – General liability includes three areas of coverage: product liability, premises liability and completed operations. If a customer becomes ill from eating contaminated produce you sold them, the medical costs are covered by product liability. If another customer trips and falls in your store, the costs are covered by premises liability. Completed operations is for any services you provide, such as baking a custom-made cake. For more information about about product liability and premises liability contact the law offices of Wolf and Pravato
Things to Consider When Shopping For General Liability Insurance
Premium based on estimated gross sales. Your premium is based on your estimation of annual sales. At the end of the year your insurance carrier will ask for the actual sales amount and adjust the premium through a credit or debit.
If you directly import goods your choices may be limited. Some insurance carriers are uncomfortable with direct importation of goods with no third party in the middle because of diminished ability to recover payments it makes on your behalf when the producer of your goods is not a US based company.
Understand the Territory. Liability policies have a coverage territory. You will find business outside the US (including territories & possessions), Puerto Rico and Canada to be more limited because not every legal system views a suit the same. Basically, liability outside the covered territory is not something to rely on.
Other Types of Gourmet Food Store Insurance
Every specialty food retailer should understand the different types of insurance available to make sure they are fully protected from certain risks.
- Spoilage Coverage – Covers the cost of food contained in your refrigeration or freezer if you lose power or something causes your units to stop working.
- Food Contamination Coverage – Covers the cost of food contaminated by parasites or other conditions.
- Business Auto -Commercial insurance policy for vehicles used for business purposes.
- Business Property – Covers damage caused by unexpected events like fire, flood, natural disasters or severe weather conditions to your gourmet food store and the contents within it.
- Cyber Liability Insurance – Protects you from customers paying online with stolen credit cards or a computer virus that harms you or your customers.
- Workers’ Compensation – Covers employees’ work-related injuries and accidents.
- Crime Insurance –Covers you from theft – both random and employee-related.
In order to fully protect your specialty food store, you should consider a variety of insurance policies. But at the minimum you should have product liability coverage. It’s a ‘must have’ for specialty food and beverage businesses. If your company needs legal guidance during a premises liability case get a free case evaluation from the accident attorneys in Fort Lauderdale.