Best Insurance for Food

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Contributor, Benzinga
September 21, 2020

Food-based businesses face unique risks. Fortunately there are business insurance products designed to protect your food business. 

Here’s what you need to know about making sure your food-based business has the coverage that it needs.

Best Food Insurance

Finding the best food insurance can take some time. You may want to consider looking for insurance companies and insurance agents that are familiar with putting together food insurance policies. 

All you need to do is get a free customized quote to get started.

Types of Food Insurance

It’s important to understand that in order to get full protection for your business, you’ll probably need more than 1 business insurance policy. An experienced insurance agent can work with you to identify the risks that your business faces and provide suggestions for your insurance products. 

Here are some of the common insurance types you may want to consider.

General Liability Insurance

General liability insurance is important for almost every type of business, including food-based businesses. This type of insurance can help protect your business against damages if a 3rd-party (meaning a non-employee) is injured at your place of business. 

It can also protect your business if it’s found responsible for a 3rd-party customer’s property damage. Your general liability insurance policy can reimburse your business for the costs of medical expenses, attorney fees and other damages if your business is held legally responsible for either of these scenarios.

Commercial Property Insurance

Think of commercial property insurance as the homeowner’s insurance or renter’s insurance equivalent for your business property. This business insurance product can help your food-based business cover the cost of repairing or replacing important property if it is damaged. 

Commercial property insurance covers almost any physical aspect of your business that you can think of. This includes your actual business building, any fencing or landscaping, outdoor signage, furniture, business equipment and even your business’ inventory. It may also offer coverage for the property of others if the damage is related to a covered claim. 

Covered claims include damage due to events such as fire, hail storms, wind storms, theft, vandalism and more. Commercial property insurance can benefit your business whether you own the business’s building, lease it or even if you’re running a food-based business from your home.

Business Income Insurance

If the thought of unexpectedly having to close your business temporarily scares you, business income insurance may be able to bring you some peace of mind. It can help keep your business financially afloat if your business has to close due to damages that are covered by your commercial property insurance policy.

Business income insurance can benefit your business in a few different ways. While your business is closed for repairs, it can replace lost net income based on what you would have earned if your business was able to operate as normal. It can also be used to pay for your normal operating expenses, such as your business payroll. If you decide to operate your business elsewhere temporarily, it can even pay for your business’s relocation expenses and advertising fees.

Equipment Breakdown Coverage

As a food-based business, your equipment is an essential part of keeping your business running smoothly. Equipment breakdown coverage can help your business handle equipment breakdowns quickly and affordably. 

As with other types of insurance, only certain causes of equipment breakdown are covered by this insurance product. Covered causes include power surges, motor burnout, boiler malfunction and operation error. Most types of equipment are included, such as mechanical and electrical equipment, computers and other communication equipment, refrigeration systems, boilers and more.

If your business experiences a covered equipment breakdown, this coverage can help in a number of ways. You can use it to cover the cost to repair or replace your damaged equipment. This includes the cost for time and labor to make the repairs or install the replacement. 

If some of your inventory spoiled due to an equipment breakdown, it would cover the cost to replace the cost items. Your equipment breakdown coverage may also cover business income losses if a covered breakdown causes an interruption to your business operations.

Business Owner's Policy (BOP)

A business owner's policy combines a few different types of coverage into a single policy. Most BOPs include general liability and commercial property insurance coverage. Some insurance companies may offer additional coverages that you can include with your BOP. As a food-based business, you may want to consider a BOP that includes business income insurance and equipment breakdown coverage. 

Some insurance companies offer BOPs tailored to the food service industry. In some cases, purchasing a BOP that includes all of these coverages can be less expensive than purchasing an insurance policy for each coverage separately.

Workers’ Compensation Insurance

Workers’ compensation insurance exists to protect both your business and its employees. If an employee suffers from a work-related illness or injury, your workers’ compensation policy can help them get the care that they need. 

It covers the employee’s medical expenses while they seek treatment for their illness or injury. If the employee needs to take time off from work to recover, it can help replace some of their lost wages until they’re able to return to work.

Workers’ compensation insurance also offers other benefits for employees. This includes situations in which the employee’s work-related injury is severe enough that the employee can only return to work in a lower-wage position. 

If this occurs, your workers’ compensation policy may be able to replace some of the employee’s lost wages from being unable to return to their normal, higher-paid position. In the unfortunate event that an employee passes away due to a work-related reason, it may also be able to pay for their funeral expenses.

Business owners can also benefit from workers’ compensation policies. Your workers’ compensation policy can help pay for your legal expenses if your employee or their family sues you due to a work-related injury.

Cost of Food Insurance

The cost of your food insurance will be based on several different factors that are specific to your business. Some of these factors include:

  • Where your business is located
  • The size of your business operation
  • Your years of experience in the food industry
  • How long your food business has been open
  • The number of employees you have
  • Your annual payroll
  • A history of past business insurance claims

The best way to find out how much it will cost to get coverage for your food-based business is to get a quote. Getting a quote is fast, free and starts by just entering your business’s ZIP code.

While most insurance companies don’t offer information about the cost of its policies upfront, some do publish the average costs for some policies. Progressive is a trusted insurance company that offers affordable business insurance policies through its Progressive Advantage Business Program. 

Through this program, Progressive reported 2019’s average annual costs for some common business insurance policies:

  • $636 for a general liability insurance policy
  • $960 for a BOP
  • $816 for a workers’ compensation insurance policy

To help you save money on your business insurance, there are a few options that may be available to you. The 1st option is to ask an insurance company if it offers the option to bundle insurance coverage into a single policy, such as with a BOP. 

You’ll also want to compare the costs for insurance from different companies, which you can do by getting a quote. Finally, make sure you’re only purchasing the types of coverage and amount of coverage that your business needs. An experienced insurance agent can help advise you on the insurance options that are appropriate for your business.

How Food Insurance Works

Food industry insurance is made up of multiple business insurance policies that are suited for food-based businesses. Each type of business insurance offers coverage for a specific set of circumstances that can negatively affect your business. As the business owner, it’s your responsibility to research the different types of business insurance and select the policies that your business needs. 

After you’ve selected your food insurance policies, you’ll need to make payments to keep your insurance policies active. These payments are referred to as your policy’s premium. If you think your business has been affected by something that is covered by your insurance policies, you can file a claim. 

Each insurance company has its own claims process. To receive the benefits of your policy, you must file a claim with your insurance company and submit the required documentation. The insurance company’s claims department will then review the claim and either approve or deny it. 

In some cases, your business may be legally required to carry certain types of business insurance. For example, most states require businesses to carry workers’ compensation insurance if it has any employees. Since each state may have different requirements, it’s important to review the rules and requirements for the state(s) that your business operates in. An insurance agent may also be able to help you determine what types of insurance may be required for your business.

Next Steps to Coverage

To protect your food-based business from legal and financial harm, you’re going to want to purchase some form of food insurance. Be sure to gather information about your business, including its size, number of employees and your business operation costs. This information can help you and your insurance agent determine the best policies and amount of coverage for your business.

Start with our list of recommended business insurance providers to find coverage for your food business today.