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Understanding Food Liability Insurance

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So, you want to understand food liability insurance before purchasing a policy? We totally get that. When it comes to your business, you want to make sure you’re getting the best coverage possible.

Today, we will break down what those insurance terms mean, explain coverage details, and tell you why every food business owner should get insured.

Let’s get started.


Food liability insurance covers exposures your business faces in the food industry. A customer could injure themselves at your establishment or experience an allergic reaction from food they purchased from you. The risks are real but the worry doesn’t have to be. By covering your business with a food liability insurance safety net, you can have peace of mind and financial security against claims.

When you are looking for a food liability insurance policy, these are the following coverage your policy should include:

  • General Liability: General liability is designed to cover bodily injury and property damage claims that you become legally obligated to pay.

  • Product Liability: Product liability is designed to respond to bodily injury and property damage claims stemming from the products you produce or sell.

    For example, a customer experiences a severe allergic reaction from a baked good they purchased from you
  • Personal and Advertising Liability: This coverage is designed to respond to advertising related claims, such as libel, slander, and copyright infringement claims.

  • Damage To Premises Rented To You: This type of coverage responds to fire-related claims on premises rented to you that you use for seven days or less.

    For example, you rent a commercial kitchen space for a catering order and cause a grease fire.
  • Business Personal Property/Inland Marine: This covers business property you utilize to operate your business.


When you first glance at an insurance website, one of the first things you will see is coverage details and a bunch of insurance terms. We’re here to break down what those terms mean. You may see the following:

  • Additional Insured: A person or organization added as an insured under the policy.

    For example, you want to sell food at your local farmer’s market and they ask to be added an additional insured. A booth visitor could injure themselves at your booth and try to sue the farmer’s market organization as well as you. If they are not at fault, your policy should cover them.

  • Agent: An individual or an organization that is authorized to act on behalf of another; an insurance agent solicits, negotiates, or instigates insurance contracts on behalf of an insurer
  • Aggregate Limit: A limit in an insurance policy that is the most it will pay for all covered losses sustained during a specified period of time
  • Insured:That’s you! An insured is someone who buys and is covered by an insurance policy.
  • Occurrence Limit: A policy covering claims that arise out of damage or injury that took place during the policy period
  • Policy: A contract between an individual (i.e., you) and an insurance company (i.e. FLIP). The policyholder pays a premium to obtain insurance coverage. If the policyholder experiences a loss the policyholder files a claim for reimbursement with the insurance company.

    For example: If you were to face a third-party claim, you could file a claim online through your FLIP dashboard and our claims adjuster would help from there.

  • Quote: The estimated amount you will pay for insurance coverage.
Business Protection

Working in the food industry carries risk. Sometimes they are completely out of our control and there’s nothing that could have been done to prevent it. You don’t have to get caught off guard. With food liability insurance, you can protect your business and get a safety net for your assets. It’s better to have peace of mind knowing you’ve done the right thing instead of worrying about something going wrong.

Ability To Respond To Claims

You hope you never face an incident on the job. We’re with you. However, it’s not always the case for everyone. With a food liability insurance policy, you have a financial safety net and your policy could help you out.

Here’s what fellow food business owners have faced:

  • Wind isn’t so harmless: A huge gust of wind blew a stationary tent over and hit a customer. Luckily, they only sustained minor injuries from the ordeal.
  • A business nightmare: A food truck owner opened up shop for the day and essential items were stolen.
  • Cart trouble: An insured lost control of their cart and accidentally hit a parked car.
Meeting Requirements

Is there an event you want to be a part of? Before you can prep and head out, don’t forget to include insurance. Many events, such as farmers markets and festivals will require coverage in order to participate. Be ready to include them as an additional insured. With FLIP, it’s super easy to do so online.


There you have it! Once you understand the insurance terms and the risk involved in the food industry, it’s easy to see why food liability insurance coverage is so important. FLIP is here to be a resource for you and provides coverage designed for the food industry.


Lyndsey Larsen is the Marketing Manager and writes about business, marketing, entrepreneurship, and insurance.

Lyndsey Larsen is an experienced writer with a background in corporate communications nonprofits, SAAS corporations, and nutraceutical companies. She has previously worked as a journalist for regional and national publications. In her spare time, she enjoys chasing butterflies, rockhounding, and spending time with her two kids in Utah’s mountains or deserts. Find Lyndsey on LinkedIn.

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