Food Processing Plants Insurance FAQ. Food processing plants have property-driven insurance plans because of their significant and substantial building and business personal property exposures that are often located in rural areas which have limited water and are served only by volunteer fire departments.
They also have liability concerns because their products are meant for human consumption and can become contaminated. Another major concern must be injuries to workers. Farm-related injuries are higher than most other industries so coverage is very important.
We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Food Processing Plants Insurance FAQ.
Read the Food Processing Plants Insurance FAQ to learn what type of commercial insurance coverages are right for your business - including liability, property, workers compensation and other specialty policies.
According to NH.gov, "A food processing plant is a type of food service establishment that is a commercial operation that processes food for human consumption, and provides processed food for sale and distribution to other business entities such as other food establishments.."
Food Processing Plants include - but are not limited to - the following types of businesses:
You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.
Following are some suggested commercial policies and coverages applicable for Food Processing Plants:
Package policies are the most convenient way to combine several coverages on a single policy. Most coverage for food processing operations can be combined together and receive package discounts under a commercial package policy (CPP).
Types Of Food Processing Plants Package Policies:
Larger food processing risks should consider an agricultural output policy for property exposures. The additional coverages and extensions could be very important. Other risks may prefer a regular output policy. Equipment breakdown protection coverage is particularly important coverage because of the processing operations performed and pressurized vessels used in the process.
Utility services direct damage coverage is an important optional coverage that should be considered because the processing risk depends on an uninterrupted source of power for its continuing operations.
Types Of Property Coverages:
The food product must be moved from the processor to the consumer. Coverage for the product during the transport is extremely important because any loss is often a total loss. While property coverage forms include some transit coverage, the limits are low and may not have the needed causes of loss.
Inland marine transportation coverage is usually broader and more inclusive. This is an important coverage even if carriers for hire are used to transport finished product. In addition, electronic data processing coverage is needed because of the highly mechanized processing systems most food processors use.
Types Of Inland Marine Coverages:
The primary crime exposure for food processors is employee theft of inventory. Money and securities exposures may be present if retail and wholesale operations are conducted at the plant or at offsite locations. Internet sales may create additional exposures.
Types Of Crime Coverages:
Food processors having contracts to supply products to government entities are required to provide a contract-performance of service or supply bond. Other bonds may be required, depending on the actual operations performed or services provided. In addition, some private entities are beginning to require supply bonds to guarantee contracts.
Types Of Surety Coverages:
Tainted products are the biggest general liability concern for most food processors. While commercial general liability coverage is vital, it is not enough. Products recall and product tampering losses are excluded under the CGL, but coverage can be purchased.
Some large food processing operations have a railroad spur on their premises. Required coverage can only be provided by a railroad protective policy.
Types Of Liability Coverages:
While the exposure may be limited to only salesperson fleets, there might be an extensive exposure if finished product or stock is transported to customers on owned vehicles.
Types Of Business Auto Coverages:
Most employers are required by state statute to provide coverage for on-the-job injuries sustained by their employees through a workers compensation policy. However, some agricultural workers are exempt from coverage. It is important to add voluntary compensation coverage endorsement to cover those workers in order to avoid a coverage gap.
Farm workers have some of the highest rates of work-related injury, so coverage should be as broad as possible.
Types Of Workers Comp Coverages:
Tainted food products can injure great numbers of people in many different places. Because the dollar impact of the damages can be catastrophic to the food processor, additional excess or umbrella limits of insurance are needed. If coverage is written on a claims-made underlying policy, retroactive excess liability coverage should be considered.
Types Of Excess Liability Coverages:
Ocean cargo coverage should be considered for goods the food processor ships overseas. Because cargo policies have war risk exclusions for certain geographical areas, the status of countries to which goods are being delivered and those along the delivery route should be reviewed and war risk coverage considered.
Types Of Ocean Marine Coverages:
The types of operations conducted, the nature of the customers, and the countries where the products are sold vary by food processors. The following coverages may be very helpful to certain customers.
Types Of Specialty Coverages:
There are many commercial insurance policies available for Food Processing Plants. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring food processing businesses.
Learn about the coverages available for specific industires with the Insurance FAQs below: