Tortilla Manufacturing Insurance

Your Guide to Tortilla Manufacturing Insurance

Ann Herro | August 15, 2018

Tortillas have been baked and eaten for centuries, and because of a rapidly growing Hispanic population and changing tastes, today they are a dietary staple in the U.S. 

While some tortillas are now made with more diverse ingredients, most are made using traditional corn- or flour-based recipes.

Businesses in the tortilla manufacturing industry purchase flour, corn, cornstarch, salt, and other seasonings from other food manufacturers, and then produce and sell completed tortillas to grocery wholesalers, retailers, caterers, and other food service companies that sell them for mass consumption. Find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs. 

Why Do I Need Tortilla Manufacturing Insurance?

Tortilla manufacturers use centuries-old methods and recipes that have been modernized with high-tech equipment. Complex industrial machines used in the manufacturing process enable efficient mass production while ensuring a safe, high-quality final product. 

The tortilla manufacturing process involves a variety of mixers, grinders, cutting tools, ovens, and packaging equipment in order to prepare the tortillas to be shipped and sold. 

During this process, tortilla manufacturers face numerous risks and exposures to financial losses every day. Tortilla manufacturing insurance is the best way to help you recover and get back to business. 

Consider the following:

  • Your employees are at risk for injury or illness every day, as they work with dangerous equipment and machinery, are exposed to extreme temperatures, and can experience respiratory problems while working long hours around flour and other grains.
  • Broken or damaged machinery can force you to cease production and lead to product spoilage, lost income, and serious financial consequences.
  • Contamination, tampering, and food-borne illnesses can harm consumers and lead to lawsuits, product recalls, and even bankruptcy.
  • Fires, severe storms, vandalism, and break-ins can damage or destroy buildings and property, cause utility outages, and lead to production interruptions and lost income.

Product Contamination and Recalls Can Cost You Millions

Any food manufacturing company can experience a product recall that costs millions of dollars. In many cases, food contamination events and recalls have resulted in civil lawsuits, criminal charges, and bankruptcies. 

According to a 2011 Ernst & Young survey of 34 major food companies:

  • Food companies rank the risk of a product recall as among their severest strategic threats, with 81% deeming it a “significant” and “catastrophic” financial exposure.
  • 78% of food manufacturers purchased product recall insurance to mitigate the risk of a product recall.

Product recalls, even smaller ones, are expensive. Product recall insurance can help you pay for many of the related costs, such as:

  • Product removal, storage, and disposal costs
  • Product replacement costs
  • Communications and public relations cost (communicating information about the recall to the public and to government agencies, and ongoing PR costs to minimize brand damage)
  • Investigative costs (determining the source of the contamination) 
  • Fines, legal fees, settlements, and court-ordered judgments

Protect Your Manufacturing Facility with Comprehensive Property Coverage

Tortilla manufacturing insurance starts with protecting your business property, including your factory building, warehouses, and office space, as well as everything that is inside all of them. 

Commercial property insurance covers your financial losses if a fire, break-in, vandalism, or severe weather damages your factory. It helps you pay for repairing or replacing destroyed buildings, machinery, furniture, computers and any other covered property inside your buildings. 

What about your business property that is not on your premises, but is destroyed while it is in transit? 

In these cases you need inland marine insurance, which is designed to protect you from losses when cargo is damaged in transit. Any piece of property that is moved from one location to another can be covered with an inland marine policy.

You Need a Backup Plan for Business Interruptions

Sometimes events out of your control can force you to stop your tortilla production line. From weather events to fires and equipment breakdown, any production stoppage can ripple throughout your business with devastating consequences. 

  • If an essential piece of equipment breaks down, it could interrupt your operations until it is repaired or replaced.
  • Sometimes equipment breaks and damages other nearby machines or even causes structural damage to your factory. Expensive repairs must be made, and in the meantime, your production line may have to come to a halt. 
  • If a severe storm hits your area and knocks out power for 12 hours, dough or ingredients left inside machines can quickly spoil and become a total loss. 

In these situations, you have to be able to react quickly, pay for the damage, make up for lost revenue, and continue to pay your bills. 

  • Business interruption coverage, or business income coverage protects your earnings if your business is unable to operate because of damage caused by some type of covered interruption (fire, theft, tornado, etc.). It pays for rent, employee salaries, lost income, relocation fees, and more. 
  • Utility interruption coverage can help you cover your losses for a predetermined time or until utility service is recovered. You can also include an endorsement to include coverage for lost or spoiled product that results from the utility interruption. 
  • Equipment breakdown insurance covers certain costs associated with accidental breakdown of machinery or equipment and the resulting property damage or loss. It pays for repairs or replacement costs as well as business interruption costs related to a breakdown of covered machinery or equipment. 

Lawsuits Can Happen to Any Food Manufacturer, Here’s How to Protect Yourself

When customers, suppliers, or members of the general public are injured on your premises, you are likely to have to pay for medical expenses and other costs related to the injury. What’s more, you can be sued and required to defend yourself, which will cost a great deal more. 

In addition, your products can injure consumers, your vehicles and drivers can be involved in traffic accidents, and your plant can emit harmful pollution that causes illness or damages the environment. 

And these are just a few of the reasons you could be sued. 

Liability insurance is your first line of defense for lawsuits and liability claims. Whether or not the claims against you are legitimate, you have to defend yourself. A legal defense is not cheap under any circumstances. 

Commercial general liability (CGL) insurance offers broad coverage for outside claims of property damage or injury. If a customer or supplier tours your tortilla factory and is injured, this policy pays for medical bills and other expenses related to the incident. It also pays for your defense as well as judgments or settlements if you are sued. 

While your CGL policy covers a wide variety of claims, there are certain circumstances where it will not respond, and you need a special policy or endorsement to be sure you are protected. 

  • Product liability insurance covers your financial responsibility for losses or injuries to a user, buyer, or bystander caused by a defect or malfunction of your product. If a person becomes ill after consuming your product, product liability insurance pays for medical bills and other expenses, as well as your defense costs if you are sued. 
  • Commercial auto insurance covers your vehicle fleet and drivers in the event of an accident or other vehicles damage that occurs with your owned vehicle. 
  • Pollution liability coverage protects you from the costs associated with improperly disposing hazardous waste or causing environmental harm. 

You can also purchase a commercial umbrella policy, which helps you pay for claims that exceed the coverage limit of your CGL or commercial auto policies. 

How Much Does Tortilla Manufacturing Insurance Cost? 

The size of your business and the types of policies you need to cover your unique risks are the biggest predictors of how much your business insurance will cost. A variety of variables that are unique to your business help determine how risky you are to insure, and consequently how costly your insurance will be. 

To determine the types and amounts of coverage that you need—which determine your cost—your insurance agent will evaluate several factors, including:

  • Number of employees
  • Types of manufacturing equipment
  • Size and location of your building 
  • Volume and geographical distribution of your products
  • Size of vehicle fleet

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 tortilla 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 insurance 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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