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Food Borne Illness

Market fruits and vegetablesYou buy only the top quality produce, proteins, and dairy from the best suppliers. Your restaurant has had rave reviews from your local press and even Zagat’s is saying very good things about you, your chef, and level of service. Everything is going beautifully and then the worst case scenario happens. You get a call from three customers who dined at your restaurant 14 to 25 days ago. All were hospitalized after eating at your establishment and the doctors tell them they have ingested a dairy product that contained a strain of listeria monocytogenes. They believe it came from the lasagna they ate at your restaurant during their last visit. Their doctors said the CDC (Center for Disease Control) has reported that there has been a recall of ricotta salata cheese from a specific manufacture that is known to supply your restaurant. What do you do now? Does your business have procedures set in place to manage this PR nightmare? Do your employees understand what they should and shouldn’t say to the press and customers if there should be more calls with additional reports? And furthermore, financially what should you do? How should you communicate with your local and state health departments?

Typically Commercial Property and Casualty insurance policies do not offer business interruption coverage for food borne illness outbreaks. These policies are designed to respond to events involving physical damage and claims for medical injury and lawsuits associated with physical and emotional injuries. They may offer some coverage in the event a customer is hospitalized, however they are not designed to cover expenses that are going to continue regardless of whether the restaurant is open or closed.

The impact can be devastating to your revenue while you work through the press and government inquiries and requirements. Do you have the capital in reserves to enable your business to keep key employees and cover ongoing expensed. Below is an example of a typical financial impact of the effects of an outbreak:

Chart of Financial Impact of a Food Borne Illness Outbreak

Chart of Expenses When Revenues Drop

If you want to know whether or not you are prepared for a worst case scenario situation, please contact our office. We will be happy to audit your Business Interruption and General Liability policies to give you piece of mind should a food borne illness Outbreak should hit your business.

Please contact us at 214-216-0225 or email Mona Carpenter at mcarpenter@innovativenationalrisk.com if you have any questions.