The new version of ISO 9001:2015 requires a company to adopt a risk management approach to issues that can impact on your ability to satisfy customer requirements. So food for thought – what risks should be considered? Well it does depend on who you are asking. In this article we ask the insurers.
Risks in the food industry
When it comes to customer satisfaction, these risks can impact on your ability to meet customer requirements. Even with the best systems in the world, there is always that measure of risk which you cannot control. And that is when you share the risk with your insurer.
Supply-chain risk
The food industry is heavily dependent on its suppliers. Yet supply delivery can be interrupted by many factors, including adverse weather, infrastructure issues, price increases or damage to a supplier location. Loss of even one dependable supplier can lead to a loss of income, and can affect the quality, consistency and service of a food service provider.
Business interruption insurance can cover the loss of business income and extra expenses that result when a supplier located within a policy territory fails to deliver because of damages resulting from a covered cause of loss.
Equipment risk management
All food businesses depend heavily on their equipment, much of which is highly automated. Imagine what would happen to a food business if the refrigeration were not working properly. When a mechanical failure takes place, the business often must close and face a loss of income.
Equipment breakdown insurance covers the cost of mechanical breakdowns, damage caused by power surges, operator error and more. Business interruption insurance covers any income lost because of equipment failure.
Spoilage and contamination coverage
Power outages and other issues beyond your control can result in costly spoilage or contamination of food, which could result in costly damage to your business and lost income.
Product liability and recall risk
The last thing a food company wants is to do is have a product you produce or provide cause harm to a user or a user's property. A "product" is anything that is tangibly used, touched, or consumed. Even with the best food safety and quality systems in place there is always that element of risk which can be transferred to an insurance company. Public liability policies do not always address product liability.
There are also the costs of recalling a product should there be a problem identified in the market. These can be considerable. Additional insurance should be considered for this.
Computer and internet disruption protection
A computer hacker or virus can also cause significant damage to your business. A hacker may damage your website or create a virus that results in a physical loss or damage to computer equipment. Cyber-liability insurance options should be considered. Restaurants and some other food industry businesses are at particular risk, because of the large amount of personal and financial data, including credit card and bank account numbers, they keep on file.
Taking these steps can dramatically increase the probability of long-term business success. However, every business is different. It’s best to discuss your business with your insurance agent to make certain there are no significant gaps in your coverage.
What to do?
If you are a business owner, it’s time to get out your insurance policy and confirm you have this cover in place. Probably time to make an appointment with your broker – you know you have been putting it off.
