How to protect your business when food contamination strikes
The kitchen is heating up, and unfortunately, it is not just from the oven. With the risk of foodborne illnesses, recalls, and reputational damage, it’s a wonder restauranteurs get any sleep at night. On top of that are the constant pressures of marketing your restaurant and coming up with innovative and great tasting menus. While we can’t help you cook up tasty eats, we can help you recover your business after a food contamination incident.
Foodborne Illness cases are on the rise (Eater, 2/23/18). According to the Center for Disease Control, each year about 48 million Americans (that’s about 1 in 6) are sickened by a foodborne illness such as salmonella, norovirus or hepatitis A. 46% of those sickened got the illness from a restaurant (see figure A below).
If that wasn’t enough, consumer awareness is at an all-time high with the prevalence of social media. Foodborne illness cases are making their way into the news every day, and the information is disseminated faster than ever. Case in point, a tweet sent out from a high profile individual regarding a friend’s illness sunk Chipotle’s Mexican Grill’s (CMG, 316.55) stock by 3.4% (Fortune, 2/23/18). When looking at these cases, we can speculate about what happened and why, but one thing is certain: The burden of increased financial costs to restaurant owners.
The core coverages of a business insurance policy are normally general liability, property (building and business personal property), business income and extra expense and workers’ compensation. While these coverages protect a business from the majority of loss exposures, there are some coverage deficiencies when it comes to foodborne illness claims. For example, general liability coverage provides protection for 3rd party bodily injury claims (i.e. an injury occurs from a slip and fall or from ingesting contaminated food). However, most standard policies do not sufficiently address losses arising from foodborne illness claims or reputational harm.
That is why First Insurance Company of Hawaii is proud to offer Restaurant Recovery Insurance, backed by our sister company and leading specialty insurer, Tokio Marine HCC. This is a specific insurance policy that covers the potential gaps in your standard insurance policies by providing comprehensive coverages for your business should you suffer from a contamination incident, malicious product tampering or face baseless adverse publicity. For example, this policy offers business interruption coverage to get you
back to pre-incident sales and can also cover brand name rehabilitation costs and product recall expenses. Restaurant Recovery Insurance also comes with a 24-hour hotline that offers crisis management advice as soon as a covered incident occurs. Coverage is available to restaurants of any size, single or multi-location enterprises, including individual groups of franchisees. Standard coverage automatically includes income from royalties and a full policy limit for product extortion. No additional premium is charged when new locations are opened due to “organic growth” during the policy period (learn more).
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Please talk to your agent/broker to determine your exact exposures and to procure coverage. You can also speak with a marketing representative at First Insurance Company of Hawaii to learn more.
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First Insurance Company of Hawaii
Direct: +1 808.527.7408 | Mobile: +1 808.838.9916
*Please note: This is intended for informational purposes only. Please seek your agent/broker and attorney to be advised. Thank you.