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Insurance For Food Businesses

Compare business insurance quotes with Savvy to find the best policy for your food or catering business today. 

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, updated on July 27th, 2023       

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There are many different types of commercial food businesses, including takeaway shops, mobile food vans and commercial catering businesses. What these diverse businesses have in common is they serve consumable foodstuffs to the public, so they present similar risks when it comes to assessing their insurance needs.  

You can compare quotes for many types of business insurance here with Savvy. Just answer a few simple questions about the business you run and the insurance you need and you’ll have multiple quotes from a range of respected insurers to consider instantly. Use our quick and easy comparison service to help you get the best value insurance for your food

What types of insurance should I buy for my food business?

There are many different types of food businesses that require business insurance, including: 

  • Food vans 
  • Mobile catering vans 
  • Takeaway businesses 
  • Commercial catering businesses 
  • Commercial kitchens 
  • Restaurants and cafes 

If you run any of these food businesses, there’s several types of business insurance you should consider to protect you and your business. These include:    

Product liability insurance 

Product liability insurance is the most important type of insurance for any food business, as it can cover you against claims that the products you supplied caused sickness, injury or death to a third party, or damaged their property. This type of insurance is vital for anyone who sells freshly prepared food or drinks, as it can protect you from claims associated with food poisoning. 

Cover starts from $250,000, with the level of cover required depending on the type of food business you run, and the legal requirements of the council which issues your food vendors’ permit. Check with your council about the level of cover required for your specific type of business. 

What it covers: 

  • Claims that a product you supplied (such as your food) caused sickness, injury or damage to property 
  • Other third-party damages claims 
  • Legal fees to defend yourself against such claims 

Public liability insurance 

Public liability insurance is also essential for anyone who runs a food business, commercial restaurant or kitchen. It can cover you against claims that a member of the public was injured whilst on your business premises, or that their property was damaged as a result of your business activity. For example, if a supplier is injured whilst delivering fresh fruit or vegetables to you, your insurance would cover the cost of any resulting claim.  

Public liability insurance can offer between $5 million and $20 million worth of coverage, and is a compulsory form of insurance which is required in order to take out many retail shop leases. 

What it covers:  

  • Third-party personal injury claims 
  • Damage to a third party’s property 
  • Legal fees to defend yourself 

General business insurance 

General business insurance may also be necessary if you run a food business. You may have a great deal of portable business equipment to protect, such as deep fryers, fridges and freezers or coffee-making machines to protect.  

Your electrical equipment can be covered by business equipment insurance, which you can purchase as part of a business insurance package. If you own your restaurant building, you may also need commercial property insurance to cover your business premises. Other specialist types of business insurance which can be added to your insurance package include: 

  • Machinery breakdown: covers you in case your freezers or refrigerated storage rooms break down, causing loss of stock due to spoilage 
  • Business interruption: covers you in case there is an insured event (such as a power failure) which causes you to have to close your cafe or restaurant and lose business and income as a result 
  • Tax audit cover: offers cover in case your business is subject to a tax audit and you need to employ additional accountants or accounts staff to comply with audit requirements 

By bundling all your insurance needs into one general liability insurance package, you’ll only have one policy and be required to deal with one insurance company. This can save you considerable time and money if you do ever need to make a claim, as you will not have to deal with multiple insurance companies. 

What it covers: 

  • Fire, storms, theft, vandalism 
  • Water damage caused by burst pipes 
  • Collisions or impacts which cause damage to your business assets 
  • Specialist cover for electronic and other equipment which is used in the food industry 

Management liability insurance 

This insurance covers you against the risks involved with running a business. It’s usually taken out to protect owners and managers from the risks associated with making management decisions. For example, if you run a commercial kitchen supplying food seven days a week, you may employ upward of 20 staff. Areas which are covered by management liability insurance include: 

  • OHSW claims 
  • Unfair dismissal claims 
  • Claims of sexual harassment or discrimination 
  • Breach of care of duty claims 
  • Breach of intellectual property rights 
  • Defamation 
  • The imposition of fines or penalties 
  • Regulatory or statutory breaches 
  • Corporate liability 

What it covers: 

  • Legal costs to defend the claim 
  • Losses resulting from such a claim (for example, compensation paid to a third party after an unsuccessful defence) 
  • Fines and penalties imposed by a regulatory body (for example, a council food safety inspector) 
  • Media costs to defend a reputation or communicate with your clients 

What isn’t covered under business insurance for a food business?  

The most common general exclusions include: 

  • Injury to yourself or your employees 
  • Flood damage 
  • Glass breakage (which can be purchased as a separate add-on to your business insurance package) 
  • Unlawful activity or criminal negligence 
  • Reckless behaviour or intentional damage 
  • Anything to do with asbestos 
  • The effects of pollution caused by your business activity 

How much does insurance cost for a food business? 

There is no set cost for insurance for a food business, as each applicant is different and faces unique risks. Many factors influence the cost of business insurance for food businesses, including the following: 

  • The state your business is in 
  • Whether you live in a rural or urban area 
  • Whether you’re a sole trader, are in a partnership or run a larger business 
  • Your business size and turnover  
  • If you have any employees 
  • Your insurance history 
  • Whether you’ve made an insurance claim in the past five years 

The main factor which will affect the cost of your insurance is the industry you’re in. All businesses in Australia are classified according to the risk their industry poses, and are allocated a risk ratio. These ratios are used by insurers to calculate the comparative risk of any one business compared to another.  

Another factor which will play a part in the cost of your liability insurance is your location. There may be two almost identical food businesses, but insurance for a business in the Northern Territory may cost more than a similar one in Victoria, simply because of the additional risks posed by cyclones in the tropical regions of Australia.  

You can find out how much insurance will cost for your business by comparing quotes right here with Savvy. Whether your food business is located in a rural town or a suburban shopping centre, you’ll be able to find a policy which is perfect for your business needs here. 

Why do I need insurance for my food or catering business?

The reason you need insurance if you run any sort of food business is because every day you face multiple risks. Business insurance, particularly product liability insurance, is there to protect you from a wide variety of claims that could threaten the existence of your business. 

There are not only the obvious risks associated with preparing food (such as tripping, slipping or burns) but also business liability risks resulting from a successful claim against your or your business. There’s always the risk of wait staff accidentally dropping hot food or drink onto a customer. If you also offer a food delivery service (such as if you run a pizza shop), there’s also the risk of your delivery staff getting injured on the road. 

Since you’ve worked so hard to set up your business, it makes sense to protect it and your reputation from anything that can go wrong. Having business insurance offers security and peace of mind, knowing you can be protected against a range of unforeseen events which are covered by your policy. If something unfortunate does happen and you have adequate insurance to protect yourself, you’ll have a much better chance of recovering quickly and getting back on your feet. 

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Frequently asked questions about insurance for food businesses

Do I need cyber liability insurance for my food business?

Cyber liability insurance is certainly an option if you feel you need protection for your EFTPOS terminals and computer systems. Unfortunately, cybercriminals are active in Australia, so cyber liability insurance can offer you protection if your systems are hacked and you need to bring in cyber security consultants to assist you in getting your computer systems secure and recovering any lost data. 

 

How long is the business insurance quote for my food business valid?

Unless otherwise stated, insurance quotes are valid for 30 days from the time they’re received. If more than 30 days elapse before you pay your first premium, you’ll need to get a fresh quote. 

 

What information will I need to make an insurance claim for my food business?

The information you should have to hand when you contact your insurance company to make a claim will include: 

  • The name of the policyholder 
  • Your policy number and start date (which can be found on your Certificate of Currency) 
  • A detailed description of the incident (what happened to cause the damage or loss) 
  • Specific dates and times when the incident happened 
  • Contact details of any other parties involved (or witnesses to the event) 
  • Details of your police report number (if a crime took place) 
  • Details of the property lost or damaged (including its age and value) 
  • Your bank details for settling the claim

 

How often will I have to pay my insurance premiums for my food business? 

You’ll be able to choose how often you pay your insurance premiums. You can either pay upfront all in one go for the year or in quarterly or monthly instalments. Paying your insurance premium annually is usually between 5% and 10% cheaper than paying monthly, so if you’re in the position to pay your insurance annually, it may be worth doing so to help you get the cheapest price. 

 

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Savvy does not compare all business insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

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