Does My Restaurant Need Spoilage Coverage?

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Does My Restaurant Need Spoilage Coverage?

March 19th 2018

Benjamin J. Palancia, Owner/Partner/CMO, Albert Palancia Agency, Inc.

Spoilage coverage is an important part of the risk management plan for restaurants of any kind. Of course, finding the right coverage for your restaurant’s needs is critically important. But first, it’s important to understand why spoilage coverage is so vital to the health of all restaurants.

What kinds of Restaurants need Spoilage Coverage?

The simple truth is that all restaurants need it. But it goes beyond what the average person considers a restaurant to include the following:

– Ice Cream Parlors
– Yogurt Shops
– Bakeries
– Convenience Stores with Delis
– Butcher Shops
– Sandwich Shops
– Food Trucks
– Specialty Cheese Shops
– Wineries
– Salad Bars
– Concession Vendors

Each of these types of food service businesses needs spoilage insurance coverage, but they are far from the only restaurants and businesses that need this important coverage – just some that may not immediately come to mind.

Preventing Food Spoilage

You probably know by now that prevention is the best cure when it comes to food spoilage. The efforts you take to reduce the risks of food spoiling, can save your restaurant a lot of money and prevent the loss of the faith of the public when it comes to dining in your establishment.

These are a few things you can do to reduce the risks of spoilage in your restaurant.

– Keep steam tables at appropriate temperatures.
– Keep things that need to be refrigerated in the refrigerator or freezer, if applicable, until it is necessary to remove it.
– Wash cutting boards, knives, and hands to avoid cross contamination.
– Inspect temperatures inside refrigerators and freezers at the beginning and end of every shift to look for signs of potential problems.
– Conduct routine maintenance of equipment.
– Rotate food properly to avoid serving old or out of date food to customers.

Small steps like these can go a long way towards preventing food spoilage, but they cannot eliminate all possibilities.

Why Buy Spoilage Coverage?

No restaurant is immune to the problem of spoilage. It doesn’t matter how many backup systems or safety protocols you have in place, there are always risks of spoilage when dealing with food and the potential for mechanical failures and simple human errors.

Unfortunately, in the restaurant business, something as simple as a power outage or refrigeration unit breakdown can result in the loss of an entire day’s worth of food, if not more. Even worse, if you didn’t know about the power failure or the equipment breakdown until people had eaten contaminated and/or potentially spoiled food, the liability could prove catastrophic without the aid of solid spoilage coverage to protect your restaurant.

Insurance is all about planning for the unexpected and mitigating risk.  Prolonged power outages are often unexpected, with the exception of those caused by ice storms and hurricanes. Since you can’t plan ahead for many of these things, it’s important to have insurance protection to protect the interests of your restaurant.

You may have coverage for equipment breakdown, but that only helps to cover the cost of the repairs or replacement of the equipment for your business. It doesn’t cover the costs of replacing the food that spoiled as a result or the liability your restaurant faces in the aftermath.

Risks of Operating Without Spoilage Insurance

Unfortunately, many restaurants fail to take the need for this type of coverage seriously until they find themselves in a situation where it is sorely needed. By then, it’s too late. The costs of food spoilage are much bigger than the average restaurant owner understands. Not only are there the obvious expenses:

– Loss of Food
– Legal Fees
– Liability Damages
– Damaged Restaurant Reputation

While some of these expenses are costs that are easy to quantify, others, such as the loss of reputation if customers become ill as a result of consuming spoiled food are not.

Of course, purchasing the right amount of spoilage coverage for the needs of your restaurant is critical. That’s why it’s so important to work with an insurance agent that understands the unique needs restaurant owners face and has the experience to help you get the right protection to meet those needs at affordable rates.

CONTACT: Benjamin J. Palancia