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Does Grocery Store Insurance Protect Against Food Contamination?

Does Grocery Store Insurance Protect Against Food Contamination

Grocery stores face the constant risk of food contamination. A customized grocery store insurance package that includes food contamination coverage will protect your grocery store.

Grocery stores, food stores, and convenience stores all need to have insurance to protect against the risks and liabilities that come with running their businesses, especially food contamination.

Did you know? With food contamination insurance coverage for grocery and food stores, you can file a claim for the value of the wasted product.

Here are the food contamination coverages you need as part of your grocery store insurance package:

Product recall insurance

Product recall insurance helps grocery store and convenience store owners when a product is recalled whether the government or a manufacturer orders the recall. The costs can include the recall expense, replacement costs, lost profits, and brand rehabilitation expense.

A grocery store owner or food store owner can face financial ruin without product recall insurance because you would have to absorb the losses yourself. This can be financially debilitating especially if you are named in a third-party personal injury or property damage lawsuit.

Equipment Breakdown Insurance: Your grocery store or convenience store has expensive electrical and mechanical equipment to keep your frozen and fresh food non-perishable and safe for consumption.

Equipment breakdown insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment not automatically covered by a standard commercial property policy. You’ll need to have a list of the equipment at your business and how much it’s worth.

Product Liability Insurance

As a food store owner, your products could be contaminated and make a customer ill. When this happens, you could be held liable for any damages.

Product liability insurance helps protect you against liability claims and lawsuits arising from the products you sell and distribute.

If a product makes a customer sick, this type of insurance can help cover costs from a potential lawsuit.

Product liability insurance also protects your grocery, convenience, or food store from damages from design, manufacturing, or marketing defects, such as incorrect labelling and safety warnings.

Here are other insurance coverages recommended for your grocery store insurance package:

Commercial General Liability (CGL) Insurance

Grocery stores or food stores can have wet surfaces both inside and out, resulting in slips and falls. A customer can slip and fall and injure themselves when a product is accidentally knocked off a shelf or when a product is dropped. Produce that has fallen on the floor can also be a slippery hazard.

CGL insurance protects your grocery store when there is a third-party bodily injury or third-party damage on the premises.

  • CGL insurance generally covers medical fees, legal expenses, and settlements regardless of the outcome of a lawsuit by a customer against you.
  • Your policy should protect you from libel, slander, copyright infringement, and false advertising allegations.

It wouldn’t be uncommon that a grocery store owner would carry at least $2 million in CGL coverage, or $5 million and more depending on the size of your operation.

Commercial Property Insurance

Whether you own or rent your grocery store location, commercial property insurance protects your store and its contents from insured risks that can happen, such as fire, theft, flood, or vandalism.

You should consider adding sewer backup or overland flood coverage extensions, which standard business insurance policies typically do not cover.

Business interruption insurance: This coverage supports you when your grocery or food store can’t operate due to a covered loss.

A covered loss could include:

  • Damage to your equipment from fire or vandalism
  • A major reduction in revenue due to a client/supplier facing losses of their own
  • A disruption in your supply chain

Business interruption insurance can help with expenses such as:

  • Payroll
  • Rent
  • Utilities
  • Property taxes
  • Alarm monitoring
  • Relocation of your business

Speak to a Western Financial Group business expert about coverage for your grocery store or convenience store.