Restaurant Recovery - Foodborne Illness

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.

Highlights

Accidental contamination or any publicity in connection with an actual contamination
Malicious tampering
Product extortion
Adverse publicity and “baseless” adverse publicity at selected sub-limits
Limits of up to $75 million in-house are available

Target Insureds

Restaurants
Small, independent or family-owned
National brand name franchises
State and franchise restaurant association members

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.
Crisis management: Our product comes with a 24-hour crisis hotline which provides access to independently owned and operated consultants available to assist their clients in handling the various exposures. Each exposure has unique characteristics and, therefore, demands its own specialist consultant from these leading U.S. based providers available on a priority basis at all times. Each policyholder will have access to the following specialized assistance:
- The Acheson Group (TAG) responds on 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 simulation.