Food Spoilage Insurance

Spoilage insurance is essential for restaurants and other food-based businesses that rely on fresh, safe ingredients and inventory to operate. When something unexpected happens, like a power outage or equipment failure, food spoilage coverage can reduce or eliminate your losses and keep your company running. Businesses that handle fresh food can add this coverage as an endorsement to their business owners policy (BOP).

What is food spoilage insurance?

Food spoilage insurance is specialized coverage that helps your restaurant or business if your perishable inventory goes bad due to covered risks. These include weather-related events, theft, and vandalism. It can also help replace your stock, so you don't have to pay out of pocket for goods you couldn't use or sell.

What does spoilage insurance cover?

A spoilage endorsement covers food that goes bad due to issues like power outages or equipment breakdown. It can also pay costs associated with contamination, such as special cleaning for equipment that's been exposed to contaminated ingredients. Spoilage insurance can help cover the following:

• Loss of inventory: Replacement of spoiled or contaminated ingredients.
• Business interruption: Recovery of lost revenue and expenses if you have to close temporarily.
• Cleanup and disposal: Safe removal of contaminated products.
• Liability claims: Costs for legal fees, settlements, and judgments if customers sue over foodborne illness.

Besides the financial protection it offers, spoilage insurance also helps protect your reputation. Responding quickly and efficiently to a food safety issue shows customers that you're responsible, which can keep them coming back after the situation is resolved.

What isn't covered by food spoilage insurance coverage?

A spoilage endorsement may not cover other kinds of inventory loss. For example, theft may be covered by the business personal property portion of your BOP.

Adding this endorsement won't cover equipment breakdowns resulting from improper use or maintenance, so taking care of your equipment is key. It also doesn't cover ingredients that expire because they weren't sold or used in time.

What professions need food loss insurance?

Insurance requirements vary by profession, but most businesses that stock fresh ingredients can benefit from food spoilage insurance.

The clearest example of a business that needs food loss coverage is a restaurant. For example, say a storm knocks out power to a restaurant kitchen, causing everything in the walk-in fridge to go bad. With a restaurant insurance policy with spoilage protection, the business could be reimbursed and get back to cooking.

Many other businesses can benefit from spoilage coverage in similar ways:

Food vendors

Food trucks, ice cream trucks, and concession vendors can protect stock that's stored in the truck or at a warehouse.

Groceries, farmers, and suppliers

Farmers and other vendors who sell at farmers markets work with perishable goods. Spoilage insurance can protect those products in refrigerated storage before going to market or if contaminated produce causes illness after sale. Likewise, grocery stores can cover a wide variety of perishable goods with food spoilage insurance.

Food service businesses

Restaurants, bakeries, and caterers can protect most of their ingredients with spoilage insurance. Coffee shops can protect beans, pastries, milk, and other supplies.

Pet professions

Even pet stores can benefit from food loss insurance. If you stock fresh treats or prepared raw meals that need refrigeration, you may be able to get spoilage coverage, just as you could for human food.

How does food spoilage coverage work?

First, you'll need to add food spoilage insurance to your BOP. Then, if a covered loss ruins your perishable stock, you can file a claim with your insurer. Once approved, the insurance company will pay to replace it up to your coverage limit.

How much does food spoilage insurance cost?

It depends. Food spoilage coverage isn't a standalone insurance policy. It's cost is factored into your BOP premium. How much it affects your rate depends on many factors, including:

• Coverage limits
• Claims history
• Location
• Business size
• Inventory

Contact the experts at Progressive Commercial to learn more about getting spoilage insurance on your business owners policy. Call our team or start a quote online to get started and see what you'll pay.

How can I reduce the risk of food spoilage?

It's always better to prevent your inventory from getting ruined or contaminated than to recover from a setback. You can reduce the likelihood of perishables going bad by:

• Performing regular equipment maintenance
• Following proper handling and storage procedures
• Educating employees
• Working with reliable suppliers and transport partners

Adding food spoilage insurance is a good option for many businesses that rely on perishable goods. Get a customized quote from Progressive Commercial for the protection you need.