Food Manufacturing
Insurance with an appetite for growth
Risk and quality control cannot be overlooked when you are in the food industry. Food manufacturers face unique challenges, from supply chain interruptions, and rising gas and electricity costs, to staff shortages.
The cost of insurance for food manufacturers has been increasing. This is due to an increase in claims within the food sector and insurers reducing the amount of coverage they can provide. While the increasing cost of insurance is another challenge for food manufacturers, the good news is that the cost can be controlled with the right strategy and options.
This makes getting the right insurance advice even more important.
Key Risks for Food Manufacturing Businesses
Property and Equipment
Whether you own or lease your location, most food manufacturers cannot operate if their location is out of action. Insurance protection for your property, plant and equipment is critical to the ongoing success of your business.
If you rent your location, you should also check your lease and confirm if you are responsible for insuring Glass.
Public and Product Liability
Under Australian Law, it is your responsibility to make sure that your products are safe and fit for purpose. If your products cause injury or property damage to a third party, you may be responsible for this. Public and Product Liability Insurance covers your legal liability to third parties for product damage and bodily injury caused by your business. The policy can also cover legal fees you incur to defend yourself.
Business Interruption
Could your business survive with revenue for 3 months? As they say, “Cash is King”. Business Interruption Insurance covers your fixed costs and profit in the event of insurable damage to your business location.
Calculating your Insurable Gross Profit is complex, and we have the experience to assist with this.
Marine Cargo / Goods in Transit
Generally, Property Insurance will not provide cover when goods are away from your place of business. When raw materials or finished goods are on the road, you must ensure they are insured.
Good in Transit insurance provides cover on the road, water, rail, and in the air. The cover can be Australia-wide or global.
Cover can include accidental damage, theft, fire, loading and unloading. Additional cover is also available for spoilage of frozen or chilled goods.
How Tempo Insurance can help
Tempo Insurance Group is a specialist insurance broker for food manufacturers.
We understand that every business is unique, and we will take the time to build an insurance program that protects your business.
- Meat processing
- Chocolate and confectionery
- Beverages
- Dairy
- Baked goods
- Agriculture
Contact us for a quote or more information.
FAQs about Insurance for the Food manufacturing industry
Do I need Public Liability Insurance?
Australia is one of the most litigious countries in the world. Under Australian Law, it is your responsibility to make sure that your products are safe and fit for purpose.
Public and Product Liability Insurance covers your legal liability to third parties for product damage and bodily injury caused by your business. The policy can also cover legal fees you incur to defend yourself.
For example, if a customer slips over in your store, they may take legal action and hold you responsible for their injury. Public Liability would protect you from this claim.
My property has a cool room and EPS wall panels (Expanded Polystyrene panels)
Many food manufacturers have a cool room or freezer with EPS panels.
Expanded Polystyrene Panels (EPS) are white and shiny and very good at stabilising the temperature. This makes them ideal for the food industry. However, EPS is highly flammable. If a fire occurs, it will spread quickly and is hard to extinguish.
EPS panels must be inspected for damage and kept in good condition. This will reduce the fire risk and demonstrate to your insurers that you are minimising your risk.
I import products from overseas, what insurance do I need?
Under Australian consumer law, an importer can be deemed the manufacturer and, therefore, liable and legally responsible for any problems caused by the product.
For example, if someone is injured while using a product you imported, they will likely seek compensation from you.
Many “off-the-shelf” insurance policies do not consider the risk associated with importing. This makes getting the right insurance advice important.
Do I need Product Recall cover?
Recall Insurance covers the cost of recalling your products in the event they pose a safety hazard to users. The cost of a product recall can be significant. Product manufacturers should consider this cover.
Approximately 300 product recalls are issued by the Australian Competition and Consumer Commission each year. About a third of recalls were food products.
If you import products from overseas then you may be deemed the manufacturer under Australian law. This makes you responsible to follow the laws and regulations in regards to product recall.
Product Recall insurance can cover:
- Fees that you must pay a retailer to remove a product from the shelf
- Advertising fees to alert the public of the recall
- Replacement of item and loss of profit
- Safe disposal of the item
What is machinery breakdown insurance?
Machinery breakdown insurance covers the cost of repairing or replacing equipment because of unforeseen breakdown or failure. The policy does not cover general wear and tear.
What is Trade Credit Insurance?
For many companies, accounts receivable is one of the largest assets on their balance sheet – But what if your client does not pay?
Trade Credit insurance covers bad debts due to insolvency.
Trade Credit insurance does not replace good credit management. However, as we have seen time after time, just one corporate insolvency can have a domino effect and threaten the financial survival of businesses that it trades with.
How Tempo Insurance can help
Tempo Insurance Group is a specialist insurance broker for food manufacturers. We have experience as an insurance broker for:
Cafés and restaurants
Hotels and resorts
Pubs and Clubs
Caravan parks