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Dairy And Creamery Insurance Policy Information

Dairy And Creamery Insurance

Dairy And Creamery Insurance. Milk freshly collected from cows is processed - pasteurized, rendering it safe for human consumption, and sometimes skimmed - at a dairy.

Milk and its byproducts, such as cream, can further be processed to make products ranging from butter and cream, to cheese and yogurt. Much of this work is carried out by dedicated creamery businesses.

Dairies harvest fluid milk from cows. Milk processors may pick up the milk, or the dairy may convert it into products such as butter, cream, yogurt, ice cream, and cheese to sell directly to retailers such as grocery stores and restaurants. The cows are milked two to three times each day.

After sanitizing the animal, a milking device is attached to the cow's udder, and the milk is pumped into a holding tank. There the milk is refrigerated until processed by the dairy or transported to another processor. Because milk naturally contains bacteria that will cause it to spoil quickly even if refrigerated, it is put through a heating process called pasteurization to destroy the bacteria.

If the dairy sells the milk directly to retailers, homogenization also occurs to keep the cream from rising to the top. The final product is bottled (using glass, plastic, or treated paper), labeled, date-stamped, and distributed to customers in whole, low fat, skim, lactose-reduced, lactose-free, flavored, and buttermilk varieties.

Additional processes are used to manufacture other milk products. Dairies are subject to regulation by the USDA, FDA, and EPA.

This work of processing dairy products and getting them ready for retail is important to public health as well as playing a vital role in the economy, and these often large-scale creamery and dairy companies rely on industrial machines (pasteurizers, homogenizers, pumps, and heat exchangers, among others) to make it all possible.

Whether you already own and manage a dairy or creamery or are considering starting such a business, it is clear that these companies have the potential to be very successful, as well as that this business sector is a stable one in which demand will never be lacking.

How do dairies and creameries defend themselves against the many risks they also have to consider, however? Investing in the appropriate dairy and creamery insurance policies is one of the most effective, as well as easiest, ways to protect your business from considerable financial setbacks when unexpected circumstances impact your business. Learn more about your options in this brief guide.

Dairy and creamery insurance protects your facility from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked dairy and creamery insurance questions:

What Is Dairy And Creamery Insurance?

Dairy and creamery insurance is a type of insurance coverage that protects dairy and creamery businesses from financial losses due to events such as theft, property damage, and liability claims.

This insurance covers various risks associated with dairy and creamery operations, including dairy production, distribution, and retail sales. The coverage includes protection for the physical property, including buildings, machinery, and inventory, as well as liability protection for third-party injury or property damage.

This insurance is essential for dairy and creamery businesses to protect themselves from financial losses and to ensure the continuity of their operations.

How Much Does Dairy And Creamery Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small dairies and creameries ranges from $57 to $79 per month based on location, size, revenue, claims history and more.

Why Do Dairies And Creameries Need Insurance?

Insurance For Manufacturers

There are many reasons to evaluate whether you have armed yourself with adequate insurance. Legal requirements and conditions set by potential lenders are two, but the other reason may be even more important - by investing in the best possible insurance coverage, you ensure that the hard work you put into building your dairy or creamery will not be undone by an unexpected disaster in the blink of an eye.

A dairy or creamery operates with the same risks common to all businesses, regardless of their branch of commerce. Your business could be impacted by a theft or act of vandalism. An accident or malfunction could force you to repair or replace your essential equipment at short notice. It is even possible that your dairy or creamery will, one day, fall victim to an act of nature - a large-scale disaster like an earthquake, hurricane, or wildfire.

On the liability front, an end consumer may get sick after consuming a dairy product processed at your facility, and sue you. A visitor to your premises, or an employee, may be injured. During a delivery, an employee may accidentally damage a neighboring business.

There is no question that many things can go wrong, and, once you have been in business for a while, the chances that all your activities pass without any incident or mishap will be rather slim - simply because risk and uncertainty are a part of life. When you are struck by a major peril, your facility will be protected if you have the right dairy and creamery insurance on your side.

What Type Of Insurance Do Dairies And Creameries Need?

The exact nature of your insurance needs depends on factors like the location of your dairy or creamery, the scope and nature of your activities, your number of employees, and the value of your equipment.

A commercial insurance agent is in the best position to help you craft an insurance plan customized to your needs. Among the key types of dairy and creamery insurance coverage needed are, meanwhile:

  • Commercial Property: Should your facility be impacted by perils like acts of nature, theft, vandalism, and accidents, this form of insurance covers your physical building as well as many of the contents. Additional business interruption insurance will help you recover some of the revenue you lose in the aftermath of such perils.
  • General Liability: To protect yourself from the costs of third party bodily injury and property damage claims, it is also essential for dairy and creamery businesses to carry commercial general liability insurance.
  • Product Liability: This type of dairy and creamery insurance helps businesses reduce the costs arising from any claims that your product caused someone injury, illness, or property damage. It does so by covering a significant amount of your legal costs.
  • Workers' Compensation: In the event that an employee suffers a work-related injury or illness, this form of coverage picks up their medical bills as well as the cost of any wages they lose to associated work absences.

Businesses in this industry will find that these forms of coverage form the backbone of their dairy and creamery insurance program, but they may also require further policies. Discuss your risk profile with a skilled commercial insurance broker to ensure you are fully covered.

Dairy's And Creamery's Risks & Exposures


Premises liability exposure is moderate as drivers of pickup and delivery vehicles, repairmen, and inspectors regularly visit the premises. There must be clear markings as to where trucks may go, and their movements must be controlled to keep the area safe and secure.

If tours are given or the dairy has a retail store on premises, all life safety codes must be met to assure visitor safety. Good housekeeping is critical due to the potential for slips and falls. Spills of liquids should be promptly cleaned up and warning signs posted.

Exits should be clearly marked and free of obstacles. Adequate interior and exterior lighting should be available in the event of a power outage. Parking lots and sidewalks need to be in good repair, with snow and ice removed.

Products exposures are moderate due to the possibility of contamination, spoilage, and foreign objects in the dairy products. Raw milk should be tested before delivery to milk processors or processing into final products. If pasteurization is done at the dairy, it must be conducted under FDA conditions.

The workplace must meet all FDA specifications for sanitary working conditions and be arranged to prevent foreign substances from entering the processing area. An on-site laboratory is recommended to verify quality control.

Tanker cleaning must be continual and must be documented. Controls must be in place to prevent contamination from exposure to chemicals such as insecticides and pesticides. Stock dating and rotation are important factors. An effective recall program must be in place that can be activated immediately.

Environmental impairment exposures are high from underground or aboveground fuel tanks and the possible pollution of air, nearby land or groundwater from the odorous gases and wastes from dairy animals. The owner must comply with all applicable federal and state requirements. Shipments of manure may result in off-premises pollution in the event of an accident or spill. If there are underground storage tanks, a UST policy will be required.

Workers compensation exposures are heavy. Handling animals and animal parts can result in workers being trampled, stepped on, or exposure to blood borne pathogens. Workers can also suffer burns caused by the heating machinery and equipment, back injuries or a hernia from lifting, foreign objects in the eye, and slips and falls from spills and inadequate housekeeping.

The automated machinery can cause injury and loss if not properly guarded. Employees may be exposed to chemicals, excessive noise, or noxious odors from animal waste. Adequate safety equipment should be required for employees in grain storage and animal handling areas. Slips and falls can result if the entire premises, including the floor, is not kept clean.

Anhydrous ammonia refrigerants are poisonous when leaked into confined spaces such as coolers. Controls must be in place to maintain, check, and prevent such injury. There may be an occupational disease exposure due to the use of hazardous or toxic chemicals, such as disinfectants, pesticides, fertilizers, and medicines used for the animals. Employees delivering goods to customers can be injured in vehicle accidents.

Property exposures are high. Dairies are commonly located in rural areas with limited firefighting resources and water supply. Ignition sources include electrical wiring, heating and air conditioning systems, refrigeration/cooling equipment, and automated milking and processing equipment. Flammables such as grain, feed, and bedding materials increase the fire load.

All machinery and equipment must be inspected and maintained regularly to avoid wear and tear or overheating losses. Wiring must be up to date and of sufficient capacity. All machinery should be grounded to prevent static buildup and discharge. Electrical fixtures should be dust and moisture proof. Due to its combustibility, an ammonia detection system should be in place if ammonia is used as a refrigerant.

Dairy products must meet extremely high sterility requirements, with most processes taking place in closed containers to prevent contamination. This sterile environment helps control most fire exposures. However, if a small fire does begin, a total loss could occur as state, local, or federal regulations may require the disposal of major portions of stock and raw materials that have been exposed to fire, smoke, heat or water.

Spoilage losses can be severe if the refrigeration and cooling equipment malfunctions or loses power. Controls, such as alarms, must be in place to warn if power is out or if the temperature rises in coolers and freezers.

Emergency backup systems, such as emergency generators, should provide power if an outage or shutdown occurs. The business income exposure can be very high as some production equipment may be difficult to repair or replace quickly.

Equipment breakdown exposure is high due to the automated machinery and equipment which can malfunction or break down. All machinery and equipment must be regularly inspected and maintained. If there are boilers, operational safety valves must be in place.

Crime exposure is from employee dishonesty of both inventory and money. Background checks should be conducted on all employees. The inventory must be under the supervision of more than one individual so that there are checks and balances. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements.

Regular audits by an outside firm should be conducted. If drivers pick up checks or accept money, there is an employee dishonesty and theft of money and securities concern. Money can be an exposure if the dairy accepts cash for tours or retail operations. Receipts should be issued for any cash payments received.

Inland marine exposure is from accounts receivable if the dairy bills customers, computers (which may include computer-run processing systems), goods in transit, livestock, mobile equipment, and valuable papers and records.

Bulk milk is transported in refrigerated tankers that must be used only for milk. Each must be sanitized after each use. The tankers are bulky and will result in a total loss if one overturns due to the potential loss of refrigeration and spoilage.

Valuable papers and records include animal records, inventory records, customer files, quality control records, and contracts with suppliers and distributors.

Very high-valued animals may need Livestock Mortality coverage through a specialty market.

Commercial auto exposures may be limited to hired and non-owned since most dairy farmers rely on milk processors to pick up raw milk. If the dairy transports milk, milk products or animals, drivers must have appropriate licenses and acceptable MVRs. Liquids may sway while being transported which will affect the handling of the vehicle. Vehicles must undergo documented, regular maintenance.

What Does Dairy And Creamery Insurance Cover & Pay For?

Dairy And Creamery Insurance Claim Form

Dairy and creamery businesses, like any other businesses, can face various legal issues that could potentially lead to lawsuits. Here are a few examples:

Lawsuits due to Product Liability: If a dairy or creamery product causes illness or injury to consumers, the company may be held legally responsible. This could be due to contamination, allergen mislabelling, or foreign objects in the products. In such cases, Product Liability Insurance can protect the business. This type of insurance is designed to cover legal expenses associated with product-related claims, including legal defense costs, settlements, and court awards.

Lawsuits due to Employee Injuries: Dairy and creamery businesses often involve heavy machinery and manual labor. If an employee is injured on the job, the company could be sued for damages. Workers' Compensation Insurance is designed to cover these kinds of risks. It can help pay for medical expenses, lost wages, and legal costs if the business is sued over a work-related injury or illness.

Lawsuits due to Property Damage: If a dairy or creamery operation accidentally causes damage to someone else's property (for instance, a delivery truck accident), the business could be held liable. In such situations, Commercial General Liability Insurance can help. This insurance can cover the costs of repairing or replacing damaged property, as well as any legal costs associated with the claim.

Lawsuits due to Environmental Damage: Dairy and creamery operations can potentially cause environmental damage, such as water contamination from improper waste disposal. If the business is sued over this, Environmental Liability Insurance can help cover the costs. This insurance can pay for clean-up costs, legal fees, and any damages awarded in a lawsuit.

Lawsuits due to Breach of Contract: If a dairy or creamery fails to fulfill a contractual obligation with a supplier, retailer, or another party, they could be sued for breach of contract. Professional Liability Insurance (also known as Errors and Omissions Insurance) can help in such scenarios. It can cover legal defense costs, settlements, and judgments related to these types of claims.

It's important to note that while insurance can help protect a business financially, it's equally crucial for businesses to implement safety protocols, quality controls, and risk management practices to prevent these types of issues from arising in the first place.

Commercial Insurance And Business Industry Classification

Description for 2021: Creamery Butter

Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 202: Dairy Products

2021 Creamery Butter: Establishments primarily engaged in manufacturing creamery butter.

  • Anhydrous butterfat
  • Butter oil
  • Butter powder
  • Butter, creamery and whey
  • Butterfat, anhydrous

Description for 2022: Natural, Processed And Imitation Chees

Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 202: Dairy Products

2022 Natural, Processed And Imitation Chees: Establishments primarily engaged in manufacturing natural cheese (except cottage cheese), processed cheese, cheese foods, cheese spreads, and cheese analogs (imitations and substitutes). These establishments also produce by-products, such as raw liquid whey. Establishments primarily engaged in manufacturing cottage cheese are classified in Industry 2026, and those manufacturing cheese-based salad dressings are classified in Industry 2035.

  • Cheese products, imitation or substitutes
  • Cheese spreads, pastes, and cheese-like preparations
  • Cheese, except cottage cheese
  • Cheese, imitation or substitutes
  • Cheese, processed
  • Dips, cheese-based
  • Processed cheese
  • Sandwich spreads, cheese
  • Whey, raw: liquid

Description for 2023: Dry, Condensed And Evaporated Dairy Products

Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 202: Dairy Products

2023 Dry, Condensed And Evaporated Dairy Products: Establishments primarily engaged in manufacturing dry, condensed, and evaporated dairy products. Included in this industry are establishments primarily engaged in manufacturing mixes for the preparation of frozen ice cream and ice milk and dairy and non-dairy base cream substitutes and dietary supplements.

  • Baby formula: fresh, processed, and bottled
  • Buttermilk: concentrated, condensed, dried, evaporated, and powdered
  • Casein, dry and wet
  • Cream substitutes
  • Cream: dried, powdered, and canned
  • Dietary supplements, dairy and non-dairy base
  • Dry milk products: whole milk, nonfat milk, buttermilk, whey, and
  • Eggnog, canned: nonalcoholic
  • Ice cream mix, unfrozen: liquid or dry
  • Ice milk mix, unfrozen: liquid or dry
  • Lactose, edible
  • Malted milk
  • Milk, whole: canned
  • Milk: concentrated, condensed, dried, evaporated, and powdered
  • Milkshake mix
  • Skim milk: concentrated, dried, and powdered
  • Sugar of milk
  • Whey: concentrated, condensed, dried, evaporated, and powdered
  • Whipped topping, dry mix
  • Yogurt mix

Description for 2024: Ice Cream And Frozen Desserts

Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 202: Dairy Products

2024 Ice Cream And Frozen Desserts: Establishments primarily engaged in manufacturing ice cream and other frozen desserts. Establishments primarily engaged in manufacturing frozen bakery products, such as cakes and pies, are classified in Industry 2053.

  • Custard, frozen
  • Desserts, frozen: except bakery
  • Fruit pops, frozen
  • Ice cream: e.g., bulk, packaged, molded, on sticks
  • Ice milk: e.g., bulk, packaged, molded, on sticks
  • Ices and sherbets
  • Juice pops, frozen
  • Mellorine
  • Parfait
  • Pops, dessert: frozen-flavored ice, fruit pudding and gelatin
  • Pudding pops, frozen
  • Sherbets and ices
  • Spumoni
  • Tofu frozen desserts
  • Yogurt, frozen

Description for 2026: Fluid Milk

Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 202: Dairy Products

2026 Fluid Milk: Establishments primarily engaged in processing (e.g., pasteurizing, homogenizing, vitaminizing, bottling) fluid milk and cream, and related products, including cottage cheese, yogurt (except frozen), and other fermented milk. Establishments primarily engaged in manufacturing dry mix whipped toppings are classified in Industry 2023; those producing frozen whipped toppings are classified in Industry 2038; and those producing frozen yogurt are classified in Industry 2024.

  • Buttermilk, cultured
  • Chocolate milk
  • Cottage cheese, including pot, bakers', and farmers' cheese
  • Cream, aerated
  • Cream, bottled
  • Cream, sour
  • Dips, sour cream based
  • Eggnog, fresh: nonalcoholic
  • Flavored milk drinks
  • Half and half
  • Milk processing (pasteurizing, homogenizing, vitaminizing, bottling)
  • Milk production, except farm
  • Milk, acidophilus
  • Milk, bottled
  • Milk, flavored
  • Milk, reconstituted
  • Milk, ultra-high temperature
  • Sour cream
  • Whipped cream
  • Whipped topping, except frozen or dry mix
  • Yogurt, except frozen

Dairy And Creamery Insurance - The Bottom Line

Not all dairy and creamery insurance policies are designed the same way. You can discover if your operations have the best fit business insurance policies by talking to an experienced commercial insurance broker.

Often they are able to save you on premiums and offer you better policy options than you currently have.

Additional Resources For Manufacturing Insurance

Learn all about manufacturing insurance. Manufacturers face many unique risks such as product libility and/or product recall exposures due to the nature of their business operations.

Manufacturing Insurance

The manufacturing industry is a vital part of the economy and plays a significant role in the production of goods and services. However, it is also an industry that is prone to risks and accidents, which can result in costly damages and lawsuits. Therefore, it is essential for businesses in the manufacturing industry to have insurance to protect them against potential losses.

Business insurance can cover a wide range of risks, including property damage, liability, and worker injuries. For instance, if a fire were to break out in a manufacturing facility and destroy equipment or inventory, commercial insurance could cover the costs of replacing or repairing the damages. Similarly, if a worker were to be injured on the job, business insurance could cover medical expenses and lost wages.

In addition to protecting against physical damages, insurance can also provide financial protection against legal liabilities. If a customer were to sue a manufacturing business for a faulty product, the commercial insurance could cover the costs of legal fees and settlements.

Overall, insurance is essential for the manufacturing industry as it helps to mitigate risks and protect against unexpected costs. Without it, businesses in the industry could face financial ruin in the event of an accident or lawsuit.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.

Other commercial insurance policies to consider: Earthquake, Flood, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.

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