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Liability Insurance FAQ
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Food Liability Insurance

Starting a new business is a complex undertaking, but it can also be rewarding. The long hours and hard work might pay off with a successful company. After putting in time and effort, it makes sense to protect the company and its image. For a company that manufactures food products, food liability insurance is an absolute necessity.

This insurance should be in place from the company’s inception. It can protect a fledgling company in the event of claims of damage or injury resulting from consumers eating their products. In some instances, retailers will not even carry the products until they have purchased sufficient liability insurance.

Food Liability Insurance - A Specialized Coverage

Food liability insurance is a highly specialized form of coverage that is not typically offered by ordinary insurance agents. Chances are that the food product manufacturer will have to do some research to find an insurer that is willing to draw up a policy for them. These are not standardized, one-size-fits-all policies. Rather, the agent or company that provides such coverage will utilize a number of different factors in order to create a liability policy that makes sense for the food manufacturer. This may involve answering questions related to the company’s annual sales, prior claims, the type of product, and the type of market in which the company does business. Knowing such valuable information allows the insurer to draw up a policy that will offer meaningful protection to the insured.

Because there are few commonly accepted standards where this type of insurance is concerned, it is probably a good idea to request quotes from at least two or three different insurers, if possible. Rates and coverages can vary widely, and the business owner may have to take considerable time to determine which policy offers the best combination of price and coverage.

Food Liability Insurance - Why Do You Need It?

New food manufacturers may be tempted to think that liability insurance is just another expense, one which they would prefer to avoid. However, the cost of not having such protection is generally much greater than any premiums paid. In the event of a lawsuit, the company will find that the damage to their bottom line is far less when they are insured.

Food liability insurance is an excellent means to protect the reputation and success of a food manufacturer, while also taking responsibility for their practices. It is a necessary precautionary measure that may never be used, but will nonetheless provide peace of mind.