Perishable Prepared Food Manufacturing

Your Guide to Perishable Prepared Food Manufacturing Insurance

Ann Herro | September 5, 2018
Radishes being washed on conveyor belt on industrial washing line

The perishable prepared food industry includes establishments that manufacture foods like salads, sandwiches, prepared meals, fresh pasta, and peeled or cut vegetables. Other perishable prepared foods include:

  • Box lunches
  • Fresh coleslaw
  • Fresh egg noodles
  • Cut or peeled fresh fruit
  • Fresh pizza
  • Fresh or refrigerated salads
  • Fresh sandwiches
  • Tofu

Why Do I Need Perishable Prepared Food Manufacturing Insurance? 

Food processors are susceptible to a wide variety of costly problems that can be financially devastating. 

Whether you sustain building damage after a fire or you are forced to recall tainted products from the marketplace, you need perishable prepared food manufacturing insurance to help you recover and stay in business. 

Food Safety Is a Major Cause for Concern

The Centers for Disease Control (CDC) estimated in 2015 that:

  • Nearly half of all food-borne illnesses were caused by produce.

A previous CDC study found that:

  • Between 1998 and 2008, leafy vegetables (found in prepared salads, sandwiches, cut-up vegetable trays, etc.) caused a quarter of all cases of food poisoning .
  • Leafy vegetables were the second-most common cause of food-poisoning related hospitalizations.

While procedures and regulations have gotten more rigorous in recent years to combat the problem, contamination still occurs, sometimes on a massive scale. This is a huge problem for the perishable prepared food industry. 

  • In May 2018, Del Monte recalled a variety of fresh-cut vegetable trays sold in 5 states, where 212 people became ill and 7 were hospitalized after eating vegetables tainted with the Cyclospora parasite. 
  • From March 2018 through May 2018, 172 people in 32 states fell ill (including one death and 75 hospitalizations) from eating romaine lettuce tainted with E. coli. The lettuce was sold in prepared salads and salad mixes at grocery stores and restaurants. It was the largest multi-state E. coli scare since 2006. 

Protect Yourself with Product Recall Insurance

The financial costs of a product recall can be devastating, even for an otherwise strong and resilient company. You’ll be forced to contend with costs related to:

  • Removing the product from the market
  • Communicating information about the recall to consumers, retailers, and government agencies
  • Disposing of the product 
  • Containing the public relations and reputational fallout 
  • Fines, legal fees, settlements, and judgments
  • Decreased sales and stock value

Product recall insurance is essential for companies that want to recover should they ever experience a recall. More than 78% of the companies contacted in an Ernst & Young survey had purchased product recall insurance, citing it as one of the top ways to help mitigate the financial consequences of a major product recall. 

Product recall insurance can help with many of the costs, allowing you to focus on saving your company and your reputation. 

Protection for All of Your Exposures

Aside from product contamination and recalls, you have a variety of other risk exposures that must be addressed. You need perishable prepared food manufacturing insurance in order to:

  • Protect your physical assets, your customers, and your employees from property damage and injuries.
  • Protect your financial assets when you are sued for causing harm to a third party.
  • Recover from product spoilage, product damaged in transit, and equipment breakdowns.

With a few property and liability insurance policies and endorsements, you can cover many of your business risks. 

  • Commercial general liability (CGL) insurance is necessary when you are accused of causing bodily injury or property damage to a third party. It covers medical expenses and repair costs for the injured party, as well as attorney fees, court costs, settlements, and judgments up to the limits of your policy. 
  • Commercial auto coverage is necessary if your business owns and operates any vehicles. It covers your vehicle fleet and drivers in the event of an accident or other vehicle damage that occurs as you transport your product from place to place.
  • Excess liability coverage, or commercial umbrella coverage, provides liability protection above and beyond the liability coverage included in a commercial general liability and business auto policy. A commercial umbrella policy would pay when your other liability coverage has been exhausted. 
  • Commercial property insurance protects your buildings and other property in the event of a covered loss, such as fire, vandalism, smoke damage, or theft. It provides coverage for physical damage to food processing equipment, factory buildings, warehouses, office space, office equipment, computers, and more.
  • Business interruption coverage protects your earnings and helps to pay expenses if your business is unable to operate because of damage caused by some type of covered disruption (fire, weather, etc.).
  • Equipment breakdown insurance covers certain costs associated with accidental breakdown (power surges, operator error, etc.) of machinery or equipment. 
  • Cargo and goods-in-transit coverage, including ocean marine coverage and/or inland marine coverage, protects your products as they are transported from place to place. 
  • Spoilage coverage offers financial protection for the costs of goods that spoil onsite. 

How Much Does Perishable Prepared Food Manufacturing Insurance Cost? 

Perishable prepared food manufacturing insurance costs will vary depending on the size of your business and the coverage you need. A large manufacturer will pay more than a small one; a factory in a hurricane zone will pay more than one located away from the coast. 

With so many variables (e.g., number of employees, types of manufacturing equipment, size and location of your building, and the volume and geographical distribution of your products), cost is hard to predict. But an independent agent can guide you though your options so you get coverage that meets your budget. 

Find and Compare Quotes

An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice. 

Benefits of an Independent Agent

Our agents simplify the search process for finding the right perishable prepared food manufacturing insurance. They’ll walk you through some handpicked policy options and explain the details.

Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately. 

The Lowdown on Online Quotes

Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you. 

Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of. 

Instead of getting an online quote, find an independent agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs. 

TrustedChoice.com Article | Reviewed by Paul Martin

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