Why Calgary Food Business Insurance is So Important
What would happen if one of your products caused food poisoning in consumers and had to be recalled? What if you failed to label all the ingredients in a product and some consumers suffered allergic reactions? Could you cover legal fees and settlements, medical expenses and the costs associated with product recall and still keep your Calgary business operational?
Those types of disasters could cause staggering financial losses that would sink most companies and cause them to shut down if they didn't have insurance to take care of those costs. If you do have the right Calgary food business insurance policy to cover risks that have the potential to shutter your business, you can sleep easily at night knowing you are protected against whatever comes your way and you'll be able to recover quickly in the event that something goes wrong.
The primary type of Calgary food business insurance needed is commercial general liability insurance. This covers you against the risk of customers getting injured or getting sick from your food, as well as damage caused by your food business to someone else's property. However, general liability alone is not enough to protect you from all the risks that come along with the food and beverage manufacturing industries. Commercial property insurance, product liability insurance, business interruption insurance and more are recommended standard options, while additions such as product recall insurance and equipment breakdown insurance can go a long way towards giving you peace of mind. Speak with a licensed broker about the unique requirements of your food business operation and let our insurance experts create a food business insurance policy that perfectly meets your needs, according to how you operate your business.
Standard Coverage for Calgary Food Business Insurance
There is no list of all types of coverage that will be included in an insurance policy for food and beverage businesses because different businesses naturally operate in different ways and therefore your insurance needs may vary from those of the next business owner. When you speak with an experienced Krywolt Insurance broker, we will ask you questions to find out exactly what you need and search out the best possible options to make sure you are fully protected by your Calgary food business insurance policy.
Commercial Property Insurance
If you're running a food or beverage manufacturing company in Calgary, you must have a commercial property where you produce your goods. That may be a massive manufacturing plant, a small business operation that you're running out of your home, or anything in between. Regardless, you need commercial property insurance to protect you against the costs associated with events such as fire, theft and natural disasters.
Generally speaking, commercial property coverage in Calgary will fall into one of two broad categories. All-risk coverage protects you against a wide range of common or likely perils, except the ones that are specifically excluded. Named perils, on the other hand, protect against the specific risks that are listed in your policy—the "named perils." Take floods, for example. Whether flood insurance is included as part of an all-risk policy depends on the insurance company, but it's often included as standard. If you have a named perils policy and your business is located in a flood-prone area near the Bow or Elbow Rivers, you'll need to speak with your broker to make sure flood coverage is specifically included.
Commercial General Liability Coverage
This kind of coverage is needed by pretty much every business owner in Calgary, regardless of industry, and food manufacturing is no exception. In the unfortunate event that someone alleges your company caused third-party bodily injury, third-party property damage or personal harm, your commercial general liability insurance will cover legal defense fees, settlement costs, medical bills and repairs or replacement for damaged property.
Product Liability Insurance
Product liability is a more specific form of commercial general liability that covers costs associated with harm caused by one of your products. That includes injury and illness caused by design and manufacturing defects, misleading or inaccurate labeling, noncompliance with advertising regulations and failure to warn a consumer how to properly use a product. For example, if you produce a product that must be cooked in a certain way to be edible and you fail to include a warning that clearly explains how to treat the product before consumption, you could be liable.
Business Interruption Coverage
If your commercial property in Calgary suffers a disaster such as a fire, your commercial property insurance will help you take care of the expenses that come along with damage mitigation and replacement of damaged equipment. But the replacement and repair work isn't going to happen overnight. Your company will be forced to operate at reduced capacity or shut down altogether until the problem is resolved and you're back to full function—and needless to say, you'll lose a significant amount of revenue in the meantime. That is where business interruption coverage comes in handy. It protects you against the loss of business income by providing reimbursements for lost revenue while you're recovering from a disaster. It may also cover additional expenses such as employee wages or the cost of a temporary location and rental equipment.
Additional Calgary Food Business Insurance Options
Aside from the basic or standard types of coverages listed above, it may be prudent for you to invest in some additional coverage for your food insurance. Calgary, AB food and beverage manufacturers can be exposed to a wide range of risks, and it's important to have the right insurance, so you know you are protected from financial loss regardless of what comes your way.
Product Recall Insurance
It's easy to assume that you'll never have a need for product recall insurance, but product recalls are incredibly common and can happen to even the most conscientious and dedicated food or beverage manufacturer. Between notifying the public and physically removing the product from stores, the logistical costs of a product recall can get out of control quickly. Your product recall insurance will likely vary a bit depending on your insurance provider, but it covers expenses such as getting the product back, the loss of the contaminated product and the cost of rehabilitating the product, if possible.
Equipment Breakdown Insurance
As a food manufacturer, you likely rely on specialized, industrial-grade equipment and machinery to help you produce goods. Imagine trying to do every step of the manufacturing process by hand—in many cases, that's not even possible or would be prohibitively difficult and time-consuming. That's why it's such a disaster to have an important machine grind to a halt when you're working hard to get orders out and meet your contractual obligations. If you have equipment breakdown insurance, that stressful situation will be much easier to cope with. Equipment breakdown insurance is a great complement to your Calgary food business insurance because it covers replacement or repair costs for equipment that is damaged in certain ways. For example, damage related to motor failure, power surges and operator error is included, but damage that results from fire, flood and natural disasters would fall under commercial property insurance.
Cyber Insurance
It doesn't matter what type of business you operate—in this day and age, it's nearly impossible to avoid storing and transmitting data online for your business. That could be financial information from your clients, sensitive identity documents from your employees, private business communications that aren't for prying eyes and much more. At the same time, there are criminals out there actively looking to get access to that information so they can commit fraud or extortion. A cyber liability insurance policy will help you avoid paying out of pocket for expenses related to malware, ransomware, spoofing, phishing and other types of cyber attacks intended to gain access to sensitive information.
Mobile Property Insurance
Some beverage and food manufacturers, particularly those whose operations include an agricultural component, need to consider adding mobile property coverage to their Calgary food business insurance policy. The term mobile property refers to mobile machines such as bulldozers and farm machinery that differ from automobiles (which require commercial auto coverage) in three key ways: they are intended for off-road use on a job site, they are designed for specific operations such as digging or threshing, and they are not subject to financial responsibility laws and mandatory insurance. However, they are integral to your business operations and you need to be protected in the event that they suffer damage from natural disasters, theft, vandalism and other perils.
Negative Publicity Coverage
If you get into a situation where you need to recall a contaminated product, it can lead to rumors and media stories about your food safety practices and more that can do serious damage to your company's reputation and end up hurting your bottom line. Negative publicity coverage is an option for Calgary food business insurance that will help you recover some costs when you lose income due to negative publicity. It may also factor in if your business is damaged by an incident with a competing manufacturer who produces similar goods.
Frequently Asked Questions
Is Food Business Insurance Mandatory in Canada?
It's not legally required for business owners to have food insurance. Calgary, AB food and beverage manufacturers absolutely need it to deal with unexpected costs that could cause serious financial losses, but it's not mandatory. If you're considering saving some money by going without adequate Calgary food business insurance coverage, keep in mind that operating your business uninsured is likely to be far more costly in the long run than paying insurance premiums. Sudden expenses for legal fees, repairs and replacements, medical settlements, property damage and more are going to be far more costly than most business owners can afford to deal with while still keeping their heads above water.
Who Should Have Calgary Food Business Insurance?
Anyone who owns a food or beverage manufacturing business needs Calgary food business insurance, whether you operate a large flour mill with hundreds of employees, or have a small team making and bottling craft sodas. It's worth noting that while food service businesses such as restaurants, cafes and food trucks also need business insurance, their needs are a bit different than companies on the manufacturing side of the food and beverage industry.
Do I Need Inland Marine Insurance if I Only Ship Cargo by Truck?
Don't let the name fool you. Despite the word "marine" in there, inland marine insurance is a type of cargo insurance that covers products while they are being shipped over land via truck or train, and while they are temporarily warehoused by a third party such as a transport company. This is an important part of making sure your cargo is completely covered up to the point when it is delivered to your clients. If you are shipping overseas (regardless of whether the cargo is going by boat or airplane) you need marine insurance.
What Factors Will Affect My Calgary Food Business Insurance Premiums?
When it comes to the cost of premiums for food insurance, Calgary, AB rates are impacted by factors such as:
- Business type
- Annual revenue
- How your business functions
- Number of employees
- Location
- Past claims history
- The coverage options you choose
You can count on the team of professionals at Krywolt Insurance to find out what your unique business needs to be fully protected with Calgary food business insurance, and to hunt down the best options, so you can have peace of mind knowing you won't suffer from sudden financial losses.
