Food and beverage manufacturing is a complex process, with many stages and lots of different equipment and ingredients. The complexity can lead to unique risks and challenges, which is why you need specialist insurance solutions and an experienced team of insurance brokers.
Most 'standard' insurance policies are missing important protections that every food manufacturer must have. We explain some of these below and how a tailor-made policy can fix the holes in your cover.
It's a big deal to get this right - it can mean the difference between your business surviving or failing, when you have a big claim.
The Unique Risks of Food Production
Food and beverage manufacturers need to ensure that their products are safe for consumption by their customers. They must also be able to prove that their products meet regulatory standards.
Food contamination issues, product recalls manufacturing errors, and packaging errors can be extremely costly to resolve, as they have the potential to damage your brand reputation, create legal liabilities and destroy your business.
Even if you have a stellar track record in terms of food safety and compliance, there are still so many other risks that can damage your brand: cyber-attacks, equipment failure, fires, floods logistics issues…the list goes on.
Food and beverage manufacturers need to be equipped with a comprehensive food and beverage insurance plan in order to continue delivering your best.
Why It's Important To Have A Tailored Liability Solution
If you are in the food and beverage manufacturing industry, it is important to know that your standard General Liability Policy will not address some of the following key liability risks for your business:
Product Recall including the Cost of Replacement Products and Financial Loss to Third parties
Package Labelling Errors (unintentional) that may or may not create risk of harm to customers
Errors & Omissions Financial losses incurred by customers and third-parties as a result of design, formulation or manufacturing errors
Crisis Management Provides cover for specialist PR expenses, to help mitigate negative publicity generated by a crisis event
Pollution Damage Provides cover for an insured’s own clean up costs and compensation to third-parties from a pollution event, including sudden and accidental pollution events and also extends to cover slow and gradual pollution
A tailored food manufacturing liability policy can address these gaps in coverage and exposures that are unique to the industry. One local provider who provides a great tailored policy is Delta Insurance.
Let's look at two case studies below and how Delta Insurance's Food Manufacturing policy responded:
Case Study 1 : Product recall
A boutique cheese manufacturer packed their cheese destined for overseas markets with dates longer than the intended shelf life. The error was picked up when the shipments reached the Chinese ports.
The products were recalled as they posed a potential danger if consumed after the end of the shelf life. The product recall section covered the costs associated with recall and replacement of the cheese products. Total value of the cheese replaced was $80,000 and the cost associated with the recall was another $30,000.
Case Study 2 - Manufacturing Errors
A contract manufacturer’s packaging unit was faulty and caused the packaging to be defective which resulted in food spoilage, with the customer losing revenue as a result. The product recall section responded with recall and replacement of the product but their customer sued them for loss of revenue and expenses. This is covered under the errors and omissions section of their specialist wording.
50% of food-related incidents have resulted in an errors or omissions claim under Delta's policy.
Summary - You've Built Your Brand. We'll Help Protect It
As a food and beverage manufacturer, you need to ensure that your business is protected from the unexpected. When it comes to insurance, you don't want to be caught off guard by an unforeseen risk - that's why it's important to have the right coverage in place and the right advice to help manage your risks properly.
That's where we come in. You shouldn't have to worry whether you have the right protection in place. That's our job.
Our team specialise in providing insurance solutions and risk management advice for clients in the food and beverage sector. We'll put a plan together that is tailored to your business.
Find out more about working with Insurely here