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There’s a great deal to consider when setting up a brand-new food or drink business, whether it’s a restaurant, deli, coffee shop, pub/bar or manufacturer. From hiring new talent to sourcing premises and suppliers, there’s plenty you’ll need to do before you get up and running – including ensuring you’ve got the right insurance in place.
Having adequate insurance is vital for food and drink businesses. Not only is there a risk that your products could affect someone’s health if improperly cooked, stored or prepared, there are also risks to your employees, who could face injury in the workplace. Depending on the types of food and drink business you run, there are different types of insurance you’ll want to consider. Here are some of the main options that will protect the owners of food and drink businesses in case anything goes wrong.
1. Public liability insurance
If an accident or incident happens to another person on your premises – like a customer slipping on a wet floor or a member of your serving staff spilling a hot drink on a customer – then it’s you as the business owner who will be liable. That’s why it’s vital that you have this type of insurance in place – and the cost of public liability insurance need not be prohibitive.
2. Product liability insurance
No matter how fastidious you are about health and hygiene, there’s always the risk that a customer could suffer ill health as a result of consuming one of your products. This may be as a result of something that happened within your premises (such as a dish in a restaurant being undercooked or prepared with out of date ingredients), or as a result of one of your suppliers providing you with sub-standard products or ingredients. Product liability insurance will cover both you and your business against any legal claims resulting from products consumed on your premises or bought from you.
3. Employer liability cover
If your food or drink business employs staff, you’re legally required to take out employer liability cover. Food businesses of all types feature a variety of environments where employees could potentially become sick or injured – and if something like this happens on your premises, you could well find that they seek compensation. Your employer liability cover protects you from having to pay this compensation from your own pocket.
4. Buildings and contents insurance
Just as in residential properties, buildings and contents insurance can protect you from unpredictable costs associated with damage to or theft of your property. If you own, rather than lease, your business premises, you’ll want to make sure you have buildings insurance to cover any damage to your property, while contents insurance will provide peace of mind should anything happen to your operational equipment, fixtures or fittings. Depending on the policy, it may also cover the personal belongings owned by your employees and suppliers.
5. Stock insurance
As well as your equipment, fixtures and fittings, you’ll want to insure your stock. The cost of replacing ingredients in a restaurant or products you’re selling in a deli can be high – what would you do if a flood contaminated your stock, or a rat or mouse problem meant that you had to start over? Stock insurance will cover you against a wide range of eventualities.
6. Business interruption insurance
If your business is forced to temporarily stop trading – for example, as a result of a fire or flood on-site – it can result in a huge amount of lost revenue…but your bills will still need to be paid. Business interruption insurance aims to put your business back to the same trading position it held before the incident happened, compensating you for shortfalls in profits and any increased costs you face as a result of the event.