Does my restaurant need spoilage coverage?

Anyone who’s been out to eat on a Friday night knows that there’s a lot to think about in terms of keeping a restaurant afloat. There’s the quality of the food, the service, the kitchens, the supplies, and a ton of other things to consider (like making sure there’s enough ketchup in the fridge.) And insuring a restaurant is no exception—food service businesses need to be prepared for a lot of different scenarios. But aside from all of the other types of insurance a restaurant might consider, there’s another important one to take into account when finding coverage for your restaurant: spoilage coverage.

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Here at InsuranceHub, we understand that you’ve got a lot on your mind with all of the OTHER types of coverage your restaurant needs, like an appropriate business owners policy, employee benefits liability coverage, and workers compensation (to name just a few—we encourage you to consider looking into getting a quote on your small business’s insurance.) It gets complicated. Thinking about what would happen if the power went out might be far down on the to-do list, but we’re here to make it easy to protect your company against an unforeseen betrayal of electricity that could result in the need for spoilage coverage.

What is spoilage coverage, exactly?

Spoilage coverage is meant to cover your restaurant if something were to happen to the power, electricity, or mechanics of your facility and cause the lights—and, more importantly, the refrigerators—to stop working. Imagine if the power cut out during the night. The food happily living in your fridge melts and becomes soggy.

By the time you come to the rescue, it’s possible that the food has already developed bacteria because of the higher temperature, and that means that that the food is unusable, not to mention unappealing. Which means that it’s got to go, and, as a result, your business loses money.

The benefits of spoilage coverage

Having spoilage coverage would mean that you get reimbursed for the total cost of the products that were ruined. Think about it—this means that if the refrigerators were to conk out, it wouldn’t be such a catastrophe. Your business would be able to get the money back for the spoiled food, meaning that though it might mean an inconvenient day for you, it’s not a financially ruinous one. If your business includes any type of food or product that could be compromised due to a lack of refrigeration, it’s a good idea to look into getting spoilage coverage to avoid losing money due to ruined ingredients or product.

Spoilage coverage isn’t just a good idea financially. Remember those nasty little bacteria we mentioned earlier? Another important thing to consider is that bacteria in spoiled food can lead to food poisoning, which no one wants to experience. Ever. So, to help avoid any instances of food poisoning related to your restaurant, it’s a good idea to make sure that there’s no need to worry about serving spoiled product. You can start from scratch and replace everything that could be compromised. If you have spoilage coverage, your bases are covered and you can breathe easier.   

What should I look for when getting spoilage coverage?

Of course, just like snowflakes, no two restaurants are the same, meaning that not every restaurant needs the same amount of spoilage coverage. It’s not a difficult process to get spoilage coverage, but there are a few things that you need to take into account. When considering investing in spoilage coverage, a good first step is to take a look at how much of your stock would be considered perishable, meaning that it wouldn’t survive a surprise power outage or mechanical failure.

Also, many insurance companies ask that you have a refrigeration service maintenance agreement prior to getting a spoilage plan, which is in your interest as it could mean you’re a candidate for a discount. It’s also a good idea to make sure that your equipment is regularly maintained to avoid any mechanical problems that are unrelated to electricity. Oh, and be sure that the service maintenance agreement is current to be sure that everything goes according to plan.

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Is spoilage coverage right for you?

So, to recap, if your restaurant or business is dependent on your refrigerators, we recommend that you look into getting spoilage coverage. We can’t predict what could happen in the future, so why not be prepared? It’s better to have spoilage coverage than to be stuck facing financial losses due to a fridge full of melted food. InsuranceHub would be happy to help you find the right coverage for your small business, and we would love to get you a restaurant quote or a small business quote!