Frozen Food Manufacturers Insurance Policy Information
Frozen Food Manufacturers Insurance. Frozen foods, ranging from vegetables and fruit to meat and fish, have been an important and convenient source of nutrition, to countless people, for many decades now.
Frozen food products manufacturers receive raw goods from butchers, dairies, farms, fishermen, orchards, slaughterhouses, or food brokers. Processing may include removing waste materials from the raw goods, cutting, blanching, or cooking, flavoring, packaging, freezing, and distributing finished goods to customers.
Due to the variety of products that fall into this classification, processes and operations may include blending, baking, or deep-fat frying. Finished goods may include frozen fruit, vegetables, meats, fish, shellfish, poultry, prepared meals, and desserts.
As it is crucial for frozen food products to remain their freshness and quality through the supply chain, from factory to the consumer's plate, however, the technology behind manufacturing frozen food products has continued to evolve.
Alongside traditional mechanical freezing methods, flash freezing, using liquid nitrogen, is now a popular way to process these products.
Manufacturers of frozen foods will first prepare the fresh product before immediately freezing and packaging it, after which it is ready to continue its journey. It is not difficult to imagine how complex the entire process of manufacturing frozen foods is; an error at any stage of production could render products unusable.
This fact represents just one of the many risks companies manufacturing frozen foods will face. To protect themselves, they will need frozen food manufacturers insurance. To find out more about the kinds of coverage that might be needed, read on.
Frozen food manufacturers insurance protects your manufacturing business 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 frozen food manufacturing insurance questions:
- What Is Frozen Food Manufacturers Insurance?
- How Much Does Frozen Food Manufacturers Insurance Cost?
- Why Do Frozen Food Manufacturers Need Insurance?
- What Type Of Insurance Do Frozen Food Manufacturers Need?
- What Does Frozen Food Manufacturers Insurance Cover & Pay For?
What Is Frozen Food Manufacturers Insurance?
Frozen food manufacturers insurance is a type of insurance coverage that is specifically designed to protect companies that produce and sell frozen food products.
This insurance typically includes coverage for risks associated with the production, storage, and distribution of frozen food products, such as liability claims, product recalls, contamination, and spoilage. The insurance may also cover the cost of repairing or replacing equipment and supplies, as well as lost income if the business is temporarily shut down due to an insured event.
This coverage is important for frozen food manufacturers to have, as it helps to protect their business and financial stability in the event of a loss.
How Much Does Frozen Food Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small frozen food manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
Why Do Frozen Food Manufacturers Need Insurance?
Manufacturers within the frozen foods industry are vulnerable to the same perils as any other business, regardless of their branch of commerce, but they also have to think about risks unique to their own field.
While a savvy risk-management plan helps to mitigate many of those risks, the fact remains that it is impossible to prevent all mishaps and disasters. Should you be impacted by a major peril, being under-insured could easily saddle your business with massive debt or even force you into bankruptcy.
Your facility could, for instance, be impacted by criminal acts like theft or vandalism. An accident or malfunction could damage or destroy essential manufacturing equipment.
Even worse, your facility could fall victim to a natural disaster, such as a hurricane or earthquake, leaving it in ruins and interrupting production for the foreseeable future.
Risks also come in other forms. Food might spoil as it is shipped to you. Unfortunate wording on your website could lead to an expensive copyright claim, or a consumer could become sick after consuming one of your products, and decide to sue. A worker could be injured at work, or the same could happen to a third party attending your premises.
All of these perils - and countless others - have one common factor: they lead to significant, and sometimes exorbitant, expenses. Could your business cope with them on its own? The answer is almost always negative, and that is why it is so important to protect yourself with a frozen food manufacturers insurance plan.
In addition, certain types of coverage will be mandatory in your jurisdiction, and lenders will also require you to be properly insured.
What Type Of Insurance Do Frozen Food Manufacturers Need?
The question may be easy to ask - but the answer is far more complex. The exact types of coverage a frozen food manufacturer should carry depends on their individual circumstances.
Factors like the location of your facility, the size of your operation, how many employees you have hired, and the type of equipment you rely on, all play a role. For this reason, consulting a commercial insurance broker is an essential stop on the path to full insurance coverage.
In the meantime, companies in this industry should always carry these types of frozen food manufacturers insurance:
- Commercial Property: This type of insurance exists to protect your business interests in case an act of nature, theft, vandalism, or other covered peril does extensive damage to your facility and its contents, as it will cover many of the costs you would otherwise have to pay for yourself.
- General Liability: Should you face a third party personal injury or property damage lawsuit, this essential form of frozen food manufacturers insurance will cover your legal costs, as well as settlement expenses.
- Product Liability: Whether an end consumer alleges that your product caused them harm, or a batch of frozen food needs to be recalled for whatever reason, this type of insurance helps your company manage the costs.
- Workers Compensation: This kind of insurance protects you as well as your workers. If an employee is injured at your facility or over the course of their job, their medical bills as well as lost wages, if any, are covered.
In addition to these important types of insurance, manufacturers of frozen foods will also likely need business interruption insurance and commercial auto insurance, among others.
With the help of a skilled commercial insurance specialist, your business will be optimally protected from unnecessary financial loss with a comprehensive frozen food manufacturers insurance program in no time.
Frozen Food Manufacturing'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 retail operations are conducted 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 normally result from contamination, spoilage, and foreign objects in the finished goods. Raw milk and meat products should be tested before processing. 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. Controls must be in place to prevent contamination from exposure to chemicals such as insecticides and pesticides used to contain insect or rodent infestations. Stock dating and rotation are important factors.
The temperatures must be monitored to ensure that all stock remains frozen to prevent the growth of bacteria. An effective recall process must be in place that can be activated immediately.
Environmental impairment exposures are from underground fuel storage, leakage of refrigerants such as ammonia and chlorofluorocarbons, and waste disposal. Storage and waste disposal must comply with all federal and state requirements.
Waste should be taken from the site on a regular basis by outside contractors. If wastewater is discharged into public waterways, a permit must be obtained from the EPA. The presence of underground storage tanks usually means that a UST policy must be purchased.
Workers compensation exposure is high due to burns caused by the cooking and processing machinery and equipment, back or hernia injuries from lifting, foreign objects in the eyes, and cuts from packaging materials. Employees may be exposed to chemicals, fungi, or excessive noise.
The excessive cold may cause frostbite injuries to the extremities. All walk-in freezers must have inside escape releases. Guards must be in place on machinery and employees should be provided with adequate safety equipment.
Forklifts should be equipped with backup alarms and refueled in well-ventilated areas. Slips and falls can result if the floors and premises are 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.
The seasonality of operations may require additional training and supervision of workers as turnover may be high. Drivers may be injured in vehicle accidents or from slips and falls and lifting injuries at customers' premises.
Property exposures are significant. Ignition sources include the cooking, refrigeration, and automated processing and conveyance equipment, electrical wiring, and heating and air conditioning systems. 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. Due to its combustibility, an ammonia detection system should be in place if ammonia is used as a refrigerant. All frying operations must be carried out under hoods with suppression systems in place and automatic fuel shutoffs. A small fire or power outage of even moderate duration could result in a total loss 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, or water.
Raw stock and final products should be stored away from the processing operation. 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 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. All machinery and equipment must be regularly inspected and maintained. If there are boilers, operational safety valves must be in place.
Crime exposure comes from employee dishonesty of both inventory and money. Background checks should be conducted on all employees. Ordering and inventory control should be carried out by two individuals so 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. Loading docks should be supervised to minimize employee theft of finished goods. There is both an employee dishonesty and theft of money and securities concern if drivers pick up checks or accept money. Receipts should be issued for any cash payments received.
Inland marine exposure comes from accounts receivable if the manufacturer bills customers, computers (which may include computer-run processing equipment), goods in transit, and valuable papers and records. The goods must be transported in refrigerated units and kept frozen the entire time of transport in order to prevent spoilage. Delay of the trip and failure of the refrigeration units can result in loss of product.
Overturn or collision will cause a total loss with no salvage due to the potential for contamination. Trucks must be well maintained with refrigeration units checked regularly.
Valuable papers and records include proprietary recipes, inventory records, customer files, quality control records, and contracts with suppliers and distributors.
Commercial auto exposures may be significant if the manufacturer picks up raw materials from suppliers or delivers finished goods to customers. All delivery involves refrigerated trucks and transporting of frozen goods. The radius of operation is a major concern due to the pressure to transport the cargo in a timely manner.
The drivers should be experienced in operating refrigerated trucks and should have an appropriate license and acceptable MVRs. Vehicles must be well maintained with documentation kept in a central location. For long-haul deliveries, drivers may not exceed DOT standards for the number of hours worked per day and per week.
What Does Frozen Food Manufacturers Insurance Cover & Pay For?
Frozen food manufacturers, like any other business, can face various legal challenges. Some of the most common reasons they might be sued include product liability issues, workplace injuries, foodborne illnesses, false advertising, and intellectual property disputes.
Product Liability: If a consumer becomes sick or injured due to consuming a defective or harmful product, the manufacturer could be sued for product liability. Insurance can protect businesses in this situation through Product Liability Insurance. This type of insurance would cover legal fees and any potential damages awarded to the plaintiff. For example, if a frozen food item contained a foreign object causing injury to a consumer, the Product Liability Insurance could cover the costs related to the lawsuit.
Workplace Injuries: Workers in the frozen food manufacturing industry may be prone to injuries due to the nature of their work. If a worker gets injured on the job, the company could be sued for compensation. Workers' Compensation Insurance can cover medical bills, rehabilitation costs, and a portion of lost wages for the injured worker, limiting the need for a lawsuit. If a lawsuit does occur, this insurance would also cover legal costs.
Foodborne Illnesses: If a consumer contracts a foodborne illness like salmonella or E. coli from a frozen food product, they could sue the manufacturer. Here, Product Liability Insurance again plays a crucial role by covering costs related to the legal proceedings and potential damages.
False Advertising: If a frozen food manufacturer makes false or misleading claims about its products, it could be sued for false advertising. For instance, if a product is marketed as gluten-free but contains gluten, this could lead to a lawsuit. In such cases, General Liability Insurance or even a specific Advertising Injury Coverage can help. This insurance can cover legal costs and any settlements or judgments related to the false advertising claim.
Intellectual Property Disputes: If a frozen food manufacturer is accused of infringing on another company's patents, trademarks, or copyrights, they could face a lawsuit. Intellectual Property Insurance can provide coverage for defense costs and any awarded damages in these cases. For example, if a company is accused of copying another's unique packaging design, this insurance could cover the costs associated with the lawsuit.
Insurance plays a crucial role in protecting businesses from potentially catastrophic financial losses associated with lawsuits. However, it's essential for companies to understand their specific risks and ensure they have the appropriate coverage for their unique needs.
Commercial Insurance And Business Industry Classification
- SIC CODE: 2013 Sausages And Other Prepared Meat Products, 2024: Ice Cream And Frozen Desserts, 2038 Frozen Specialties, Not Elsewhere Classified, 2053 Frozen Bakery Products, Except Bread, 2092: Prepared Fresh Or Frozen Fish And Seafoods, 2097 Manufactured Ice
- NAICS CODE: 311411 Frozen Fruit, Juice and Vegetable Manufacturing, 311412 Frozen Specialty Food Manufacturing, 311520 Ice Cream and Frozen Dessert Manufacturing, 311615 Poultry processing, 311710 Seafood Product Preparation and Packaging, 311813 Frozen Cakes, Pies, and Other Pastries Manufacturing 312113 Ice Manufacturing
- Suggested Workers Compensation Code(s): 2112 Fruit Evaporating or Preserving, 2095 Meat Products Manufacturing NOC, 2143 Winery & Drivers
Description for 2013: Sausages And Other Prepared Meat Products
Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 201: Meat Products
2013 Sausages And Other Prepared Meat Products: Establishments primarily engaged in manufacturing sausages, cured meats, smoked meats, canned meats, frozen meats, and other prepared meats and meat specialties, from purchased carcasses and other materials. Prepared meat plants operated by packing houses as separate establishments are also included in this industry. Establishments primarily engaged in canning or otherwise processing poultry, rabbits, and other small game are classified in Industry 2015. Establishments primarily engaged in canning meat for baby food are classified in Industry 2032. Establishments primarily engaged in the cutting up and resale of purchased fresh carcasses, for the trade, (including boxed beef) are classified in Wholesale Trade, Industry 5147.
- Bacon, slab and sliced
- Calf's-foot jelly
- Canned meats, except baby foods and animal feeds
- Corned beef
- Corned meats
- Cured meats: brined, dried, and salted
- Dried meats
- Frankfurters, except poultry
- Hams, except poultry
- Luncheon meat, except poultry
- Meat extracts
- Meat products: cooked, cured, frozen, smoked, and spiced
- Pigs' feet, cooked and pickled
- Pork: pickled, cured, salted, or smoked
- Potted meats
- Puddings, meat
- Sandwich spreads, meat
- Sausage casings, collagen
- Smoked meats
- Spreads, sandwich: meat
- Stew, beef and lamb
- Vienna sausage
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
- Pops, dessert: frozen-flavored ice, fruit pudding and gelatin
- Pudding pops, frozen
- Sherbets and ices
- Tofu frozen desserts
- Yogurt, frozen
Description for 2038: Frozen Specialties, Not Elsewhere Classified
Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 203: Canned, Frozen, And Preserved Fruits, Vegetables, and Food Specialties
2038 Frozen Specialties, Not Elsewhere Classified: Establishments primarily engaged in manufacturing frozen food specialties, not elsewhere classified, such as frozen dinners and frozen pizza. The manufacture of some important frozen foods and specialties is classified elsewhere. For example, establishments primarily engaged in manufacturing frozen dairy specialties are classified in Industry Group 202, those manufacturing frozen bakery products are classified in Industry Group 205, those manufacturing frozen fruits and vegetables are classified in Industry 2037, and those manufacturing frozen fish and seafood specialties are classified in Industry 2092.
- Dinners, frozen: packaged
- French toast, frozen
- Frozen dinners, packaged
- Meats, frozen
- Native foods, frozen
- Pizza, frozen
- Soups, frozen: except seafood
- Spaghetti and meatballs, frozen
- Waffles, frozen
- Whipped topping, frozen
Description for 2053: Frozen Bakery Products, Except Bread
Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 205: Bakery Products
2053 Frozen Bakery Products, Except Bread: Establishments primarily engaged in manufacturing frozen bakery products, except bread and bread-type rolls. Establishments primarily engaged in manufacturing frozen bread and bread-type rolls are classified in Industry 2051.
- Bakery products, frozen: except bread and bread-type rolls
- Cakes, frozen: pound, layer, and cheese
- Croissants, frozen
- Doughnuts, frozen
- Pies, bakery, frozen
- Sweet yeast goods, frozen
Description for 2092: Prepared Fresh Or Frozen Fish And Seafoods
Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 209: Miscellaneous Food Preparations And Kindred
2092 Prepared Fresh Or Frozen Fish And Seafoods: Establishments primarily engaged in preparing fresh and raw or cooked frozen fish and other seafoods and seafood preparations, such as soups, stews, chowders, fishcakes, crabcakes, and shrimp cakes. Prepared fresh fish are eviscerated or processed by removal of heads, fins, or scales. This industry also includes establishments primarily engaged in the shucking and packing of fresh oysters in nonsealed containers.
- Chowders, fish and seafood: frozen
- Crabcakes, frozen
- Crabmeat picking
- Crabmeat, fresh: packed in nonsealed containers
- Fish and seafood cakes, frozen
- Fish fillets
- Fish sticks
- Fish: fresh and frozen, prepared
- Oysters, fresh: shucking and packing in nonsealed containers
- Seafoods, fresh and frozen
- Shellfish, fresh and frozen
- Shellfish, fresh: shucked, picked, or packed
- Shrimp, fresh and frozen
- Soups, fish and seafood: frozen
- Stews, fish and seafood: frozen
Description for 2097: Manufactured Ice
Division D: Manufacturing | Major Group 20: Food And Kindred Products | Industry Group 209: Miscellaneous Food Preparations And Kindred
2097 Manufactured Ice: Establishments primarily engaged in manufacturing ice for sale. Establishments primarily engaged in manufacturing dry ice are classified in Industry 2813.
- Block ice
- Ice cubes
- Ice plants, operated by public utilities
- Ice, manufactured or artificial: except dry ice
Frozen Food Manufacturers Insurance - The Bottom Line
Not all frozen food manufacturers insurance policies are created equal. You can discover if your manufacturing business has the best fit insurance policies by talking to an experienced commercial insurance agent.
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.
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- Plastic Goods
- Plastics Molding, Forming & Extruding
- Product Liability
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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.