When operating a grocery store, you provide crucial sustenance to your community, so staying operational and standing by your service and products are your top priorities. This means caring for your workers as well as your patrons, but it also includes having the financial support to get back on your feet should a disaster strike. Good grocery store insurance can help you with all of these.

As with all businesses, carrying commercial property and general liability insurance is a must, but there are special considerations for supermarkets and grocers. Those include financial protection in case someone claims they were sickened by food your prepared or stored or were harmed by a product you sold.

Foodborne Illness Coverage

Foodborne illness claims often come in groups, since one batch of tainted food can sicken many purchasers. Undercooking, poor refrigeration, unhygienic handling, and problems created by an ingredient’s provider can be factors, but – whatever the cause – if you’re named in a complaint, you will face substantial legal defense bills and potential settlements or judgments. A grocery store insurance policy that includes foodborne illness coverage is a must.

Keep in mind that products you sell – even those arriving in faulty condition from the manufacturer, farm, packager or shipper – can get you named in a lawsuit. Ask your insurance professional about the details of product liability coverage under your policy to make sure you have adequate protection from legal action.

Some insurers also cover the expenses associated with pulling problematic merchandise from your shelves, so you may wish to see if this protection is available.

Equipment Breakdown Coverage

Your insurance program should also include equipment breakdown coverage. Often called boiler and machinery insurance, this kind of coverage insures your critical refrigeration, cooking, HVAC and even checkout registers. While wear and tear isn’t covered under most policies, many insurance companies will provide a schedule of maintenance that, if adhered to, will reduce major disruptions to your business due to equipment failure.

Most equipment breakdown policies – even those rolled into a business owners policy (BOP) – will include coverage for product spoilage, business income loss, and extra expenses incurred to get back up and running.

Utility Services Coverage

In some cases, your grocery store operations come to a halt because of external factors, such as downed lines or other damage to utilities. These events are not covered under equipment breakdown or standard business interruption insurance and should have their own treatment, often called utility services coverage.

There are typically two types of utility services endorsements (add-ons to your commercial insurance): time element and direct damage.

• Time element coverage extends your business interruption insurance to cover revenue losses caused by damage to utilities, such as a broken water main or exploded transformer.
• Direct damage coverage backs up your property insurance and helps pay to repair damage to your premises or contents resulting from a utility service interruption caused by a covered peril, such as lightning or wind.

Crime Insurance and Fidelity Bonds

While most business owners policies and program insurance for grocers includes some coverage for the loss of money and securities, such as theft, it may be a fairly small amount.

Talk to your insurance professional about crime insurance and employee dishonesty insurance (or a fidelity bond). These can enhance your basic coverage for theft or embezzlement and can help if there is a big loss or a long-term diversion of assets. You may want to investigate if a crime policy or employee dishonesty coverage will respond if your company is found liable for cargo theft at the point of delivery.

Cyber Coverage

It may seem like cyber insurance is for tech companies, but supermarkets and even corner grocers and bodegas need to consider how a hack into your computer system would affect your ability to operate. Could you still take payments? What if your inventory or financial data are locked until you pay a ransom? What if customer credit or debit card data is stolen?

A cyber insurance policy can help pay for investigative costs, legal expenses, and restoration fees as well as any settlements or judgments you may face. Getting a cyber risk policy has the added benefit of giving you access to cybersecurity experts who can help you prevent losses in the first place – a service you’d pay handsomely for if you hired a consultant.

All You Need to Know About Cyber Liability Insurance

Business Auto Coverage

If you offer delivery services, you need some kind of business auto insurance. For employee-owned vehicles that are put to use for work duties, your company should secure non-owned business auto insurance. It gives your store liability protection should your driver cause an accident.

If delivery is a new duty for your employees, remember to tell your workers’ compensation provider so your workers’ comp policy can reflect that increased risk profile. If your store uses its own van or other delivery vehicle, you will want business auto insurance that includes that property; in fact, you may need fleet insurance if you have several vehicles. Your insurance professional can talk to you about the benefits of telematics (devices that help you monitor driving safety practices).

Special Considerations Relating to Lottery and Liquor Sales

Many grocery stores nowadays sell alcohol and lottery tickets. Both these offerings need insurance.

Even if you are not “serving” alcohol, your store could be named in a lawsuit alleging your sale of the product contributed to a serious injury or a death. Liquor liability insurance is required in some states for any establishment that sells alcohol. Most states also require stores that sell lottery tickets to obtain a lottery bond. That is a type of surety bond that protects the state and consumers from store wrongdoing regarding tickets or machinery.

Workers’ Comp and EPLI

Lastly, no grocery store insurance portfolio would be complete without workers’ compensation insurance. In addition to that, your company may wish to look into employment practices liability insurance (to protect against the costs of employee complaints over their treatment) and active shooter/workplace violence insurance.

Your store will also benefit from strict loss-control procedures. For the safety of patrons, workers and business revenue, employ a combination of proactive loss prevention and comprehensive insurance protection. Connect with us so we can help you find a BOP, an insurance program, or a suite of coverages that serves you best.