What exactly is spoilage insurance?
It might be easier to explain this with a story:
Lets say you own a steakhouse restaurant. Your freezers hold thousands of dollars of prime beef steak. On late Sunday night, the power goes out for 8 hours at your restaurant. All of your cases are down and without power.
The rising temperature in the cases lead to bacteria growth and all of your steaks are now spoiled. This is where a spoilage insurance policy could be a lifesaver to you. Simply put, in the case of refrigeration and freezer breakdown or power outage, you would be covered for the cost of replacement of all perishable products. Best of all, spoilage insurance is more affordable than you probably think.
What is the real cost of spoilage?
Spoiled food means that you can't sell it or make a profit on it. However, that is only the tip of the iceberg. What happens if your customers eat spoiled food that contains bacteria and then they get sick?
Food poisoning is no joke. You threaten your restaurant with a major liability risk, as well as the risk of ruining your reputation.
How much spoilage insurance coverage do I need?
Take the time to calculate the cost of all your perishable inventory at any given time. Make it a point to speak with your agent about "replacement values" and "sale values."
Pro tip on spoilage insurance
Many spoilage plans require that you get a refrigeration service maintenance agreement before getting coverage.
First, you may get a discount for doing this, so check with your agent. Second, make sure you get regular inspections to your equipment. Third, make sure you keep this agreement up to date. Cancellation of the maintenance agreement before making a spoilage problem could result in non-payment of your claim.
Who needs spoilage insurance coverage?
If a mechanical problem, an electrical problem or a power outage shut down your freezers and refrigeration coolers, would you lose perishable stock? If your answer is yes, then you need a spoilage insurance plan.
Here are a few common examples:
- Food service providers
- Food processing
- Cold storage warehouses
- Coffee shops
- Ice cream stores
- Ice cream trucks
- Produce stores
- Grocery stores
- Convenience stores
- Pharmaceutical manufacturers