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Food spoilage is something everyone with a kitchen is familiar with, regardless of whether you are a restaurant owner or not. For the average family, food spoilage might consist of a little milk spoiling or some mold on the last piece of bread – a sign that it is time to head to the grocery store. For restaurants, which manage large quantities of food each day, food spoilage can cost a significant amount of money to your business. If you do not already have spoilage coverage for your dining establishment, here is some insight on why you may want to consider securing a policy.
What is Spoilage Coverage?
Food spoilage coverage protects your business in the occasion that any number of events occur and cause the perishable food in your restaurant’s kitchen to spoil. When you secure food spoilage coverage, you are eligible for reimbursement of food that spoils, loss of income, medical tests and vaccinations for employees in the case of a contamination situation, and sometimes even advertising costs to improve your business’ reputation following a food spoilage or contamination issue. Food spoilage coverage will only provide reimbursements under certain outlined events within your policy that cause the spoilage to occur in the first place. For example, you will not receive reimbursement for food that spoils due to it not being utilized before its expiration date.
Why You Need Spoilage Coverage
There are several events that may occur within your restaurant at any given time and put your business at risk for food spoilage or contamination. It is important to weigh the costs and benefits of something like food spoilage coverage depending on the amount of perishable food your business has on premises at any given time, how many customers you receive on a typical business day, and what kind of damage to your reputation it might have amongst your customers. Here are some of the unfortunate events every restaurant business faces at one point or another that would be covered under spoilage insurance:
- Equipment breakdown: If your refrigerator, freezer, etc. were to have a failure or breakdown, you would most likely be faced with all of the perishable food inside spoiling after a prolonged period of time. With spoilage coverage, you would receive a reimbursement for the food lost due to the equipment breakdown. This will save your business a significant amount of money so that you can focus on making the necessary repairs and replacements to your equipment.
- Contamination: Food contamination can occur at many levels. For example, the food may come to your establishment already contaminated, or one of your employees may unknowingly transmit bacteria to the food. This could cause your customers to get ill, and even cause your restaurant to be closed by the health department. Contamination coverage (within spoilage coverage) will reimburse you for the costs associated with contamination such as income loss, food replacement, and the cleaning of your establishment.
- Power Outage: Power outages might not seem like a big deal, until you realize that it means you do not have anything keeping your perishable food cool and safe. In periods of extended time without power, your food will no longer be safe to serve to customers. With food spoilage coverage, you will be reimbursed for the loss of food and loss of business due to a power outage.
Is Equipment Breakdown Coverage Enough?
The short answer is no, Equipment Breakdown Coverage does not provide the same type of coverage as spoilage coverage. Equipment breakdown coverage only covers a physical breakdown of covered equipment. Therefore, spoiled food would not be covered. It is also important to note that a power outage is not considered a breakdown – something on the equipment must be physically broken for this coverage to kick in. Whereas food spoilage coverage only requires failure of the equipment. Both policies are important in filling the gaps to ensure full coverage of your restaurant and its entities.
Secure the Right Insurance Coverage for Your Restaurant
Need help securing the right insurance for your specific restaurant, without being roped into unnecessary coverages? At RPA, we work solely with the restaurant industry. We draw upon decades of experience in all 50 states to provide restaurants with the necessary coverages they need for their business to survive the test of time. Contact us today to speak with a representative.