When we think about general liability we think of bodily harm or property damage resulting from accidents, such as slip and falls. However, General Liability goes much further for restaurant owners with product liability – often called Products and Completed Operations Coverage.
The products portion of Products and Completed Operations Coverage refers to “any good or product that your business manufactured, sold, handled, distributed, or disposed of” – for restaurants this translates to drinks and foods either consumed at your restaurant or taken to another location and consumed.
If a customer catches a food-borne illness, such as e coli, finds a foreign object in their order, or has an allergic reaction to an ingredient that should not have been in the food or drink, Products Liability coverage will apply to any damages the restaurant is found liable for. This could be medical bills, legal fees, settlements, etc.
While this coverage is included in most general liability policies, in is not always and some policies may not recognize food as a completed “product”. In this case an endorsement called Product and Completed Operations Hazard Redefined is needed. This ensures that food sold by the restaurant is covered under the products portion of the Products and Completed Operations Coverage.
Due to these discrepancies, it is very important for restaurant owners to work with an insurance agent experienced in restaurants and hospitality coverage to ensure there are no gaps in coverage.
To minimize the risk of food-borne illness, restaurants should periodically inspect their operations. Concklin Insurance Agency has a self-inspection checklist that will help restaurants to perform periodic reviews of their food services operations to assist in recognizing and correcting unsafe activities or conditions before a loss occurs. This checklist is merely a guidelines, and is neither meant to be exhaustive nor meant to be construed as legal advice.
