Does Spoilage Insurance Cover Alcohol and Beverages?

If you conduct a quick Google search asking about spoilage insurance, you will read a lot about food contamination due to a power outage or equipment breakdown. But what about alcohol and beverages? Are they included?

Spoilage insurance is important for any restaurant that wants to be compensated for expired, contaminated, or spoiled products. However, there are still some unanswered questions and confusion when it comes to spoilage insurance and what it covers. Luckily, these questions will be answered to give you a better idea of what spoilage insurance covers and why your restaurant may benefit from investing in it.

What This Policy Can Cover

Spoilage coverage will reimburse you for the cost of perishable inventory, including alcohol and beverages, but only during certain covered events. These events include:

• Equipment Breakdown or Malfunction: Say you walked into your restaurant’s freezer one day only to find everything is thawed out and ruined from a malfunction in your freezer. Spoilage insurance would be able to compensate, which could save you significant money.
• Power Outage: ZAP! Unless you have a backup generator, a power outage for your restaurant can be devastating. The shutting down of freezers and refrigerators means your inventory is being exposed to humidity and high temperature which puts perishable items at high risk.

Overall, spoilage insurance can save your restaurant a lot of time and money. The last thing you would want is to turn out like Maggie’s Buns, owing $2.9 million dollars from a lawsuit for serving spoiled food that led to a man’s death. While this is a worst-case scenario, it is possible if caution is not the number one priority. Investing in an umbrella policy in addition to your general liability insurance can save your restaurant should you find yourself in a similar situation to Maggie’s Buns.

What This Policy Can’t Cover

Every policy has its limitations, and spoilage insurance is no exception. For example, spoilage insurance will not cover losses caused by accidental disconnection of equipment from a power source or any deactivation of electrical power. Limitations also include damages from loss of power due to government order or fuel shortage. The pros of spoilage coverage heavily outweigh the cons, so check with your insurance provider or contact H&K Insurance to see how you can have the coverage included for your restaurant.

Does Your Restaurant Need Spoilage Insurance?

Spoilage insurance is coverage that every restaurant should have. While the decision is ultimately up to you, equipment malfunction or power outages can ruin thousands of dollars of inventory for your restaurant. The small investment of spoilage insurance will be worth your time and money to insure protection from your perishable goods.

We at H&K Insurance have decades of insurance experience and have had over 10,000 satisfied clients. It is our hope that you learned more about spoilage insurance and if it is right for your restaurant. We would love to hear from you and answer any questions you may have, so feel free to contact us today! We can’t wait to hear from you.