Accidental contamination or malicious product tampering of food products in the restaurant industry causes restaurants to lose millions of dollars in revenue. This impacts restaurants and groups of franchisees trading under the same name as the business originally affected. The impact of a trading interruption to a restaurant that suffers the effects of a foodborne illness, contamination, tampering or extortion can have a devastating effect on the restaurant's financial stability and reputation.
Summary of Coverage
The policy offers business interruption coverage back to pre-incident sales and also covers brand name rehabilitation costs. Numerous other additional expenses are covered, including recall costs, incident expenses and crisis management advice. Coverage is available to restaurants of any size, single or multi-location enterprises, including individual groups of franchisees.
Following a foodborne illness, accidental contamination, malicious contamination or product extortion, the policy will respond to the financial losses related to the incident. Standard coverage automatically includes income from royalties and a full policy limit for product extortion. No additional premium is charged when new locations are opened due to “organic growth” during the policy period.
Financial losses include:
- Pre-incident expenses: Covers consultant fees and expenses plus chemical analysis, forensics and/or physical examination in order to ascertain whether a loss has occurred. The policy’s self-insured retention does not apply to these costs. Specialized consultants are available 24 hours a day, seven days a week to the insured.
- Recall costs: Compensates for destruction of contaminated products on premises.
- Business interruption: Pays for loss of gross revenue and extra expenses for up to 18 months following an incident (no minimum percentage threshold for the reduction in revenue in order for the business interruption coverage to trigger).
- Rehabilitation expense: Covers reasonable and necessary expenses for a period of up to twelve months to reestablish the insured’s products to the reasonably projected level of sales or market share anticipated prior to the incident.
- Extortion costs: Pays up to full policy limits for product extortion costs paid in response to demand made upon the insured under threat to commit a malicious tampering.
Workplace violence: Provides coverage in the event of an international or unlawful act of deadly force or threat (resulting in bodily injury or death) directed specifically against the employees, customers or vendors or a covered restaurant location.
- Consultant and advisor costs: Pays fees and costs of consultants to assist the insured during an incident as per crisis management below.
TAG (The Acheson Group)
Crisis Consultants Restaurant Recovery insurance policies include the added benefit of access to 24 hours per day, 365 days per year crisis response services. Crisis response consultants, The Acheson Group, LLC (TAG) are available to the Insured 24 hours through the crisis hotline. TAG responds to foodborne illness and contamination issues and acts as a provider of consulting services in the areas of food safety, training, quality assurance, outbreak alerts, and crisis assistance. TAG works on behalf of the Insured, not the insurance company, to provide crisis consulting in the event of a restaurant recovery incident and/or pre-incident consulting.
