Protect Your Restaurant From The Aftermath Of A Food-Borne Illness Outbreak

The most important responsibility of a restaurant owner/manager is to keep the food you serve safe and fresh for your patrons. Restaurants and other types of hospitality entities face unique exposures when it comes to food-borne illnesses and contamination. The Centers for Disease Control & Prevention (CDC) estimates that each year roughly 1 in 6 Americans become sick from consuming foods or drinks that are contaminated with harmful bacteria, viruses or parasites.

A 2015 CDC report found that the number of multi-state food-borne disease outbreaks are on the rise, currently averaging around two per month. These outbreaks are larger, more frequent, and deadlier than before. The financial and social impact of a food borne-illness outbreak can greatly damage your bottom line, reputation and even result in the closure of your operation. Some of the most common food-borne illnesses include: E-coli, Salmonella, amongst many others.

Prevention Best Practices:

The use of food safety practices by the entire organization minimizes the chance of a food-borne illness outbreak. To manage the risk of food-borne illness, you must implement policies that focus on good health and hygiene practices and ways to maintain the viability of the business. Every food establishment uses, processes, and sells food differently. However, the general issues and key principles of food safety remain the same.

All food safety training programs should contain these three main factors:

• Personal Hygiene for Food Professionals
• Time & Temperature Control
• Cross-contamination Prevention

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Here are some ways you can make sure your food safety plan will be effective:

• Establish clear, actionable goals for the safety of the customer and the health and productivity of your business.
• Ensure consistent support throughout your company for the plan, starting with senior management.
• Have a formal crisis management and communication plan that establishes clear roles and responsibilities, and addresses potential product recall events.
• Educate employees on the steps to be taken in a crisis situation.

Financial Impact / Insurance Coverage:

If your restaurant is part of a chain or group, it is difficult to control every aspect of food handling across all locations, however, there should be a protocol established with best practices for risk management to make sure that each manager/owner is following the proper instructions to handle food appropriately. Food- borne illness claims are among the greatest financial risks facing the food industry. As seen in recent headlines about the Chipotle Mexican Grill E.coli and Salmonella outbreaks across dozens of locations in the US, an unsafe practice from one or a few locations could cause significant collateral damage to your entire operation. It is vital that you investigate options that would insure you against these kind of losses.

Food-Borne Illness insurance covers major factors of the financial impact of a food-borne illness outbreak, which include loss of income and incident response/public relations expenses:

• Business Interruption: Traditionally, your commercial property insurance policy should come with “business interruption” coverage, however, this will only cover costs associated with loss of business income resulting from physical damage to your operation such as a fire, NOT a loss of income from a media driven health scare or food borne illness peril. A comprehensive Food-Borne Illness insurance policy comes with a separate business interruption kicker which will cover your losses if you lose 10% or more of sales as a direct result to the outbreak in your restaurant.

• Incident Response: After an illness outbreak has occurred, resources are required to locate and recover the product, coordinate announcements, and deal with customer complaints and potential lawsuits. As witnessed in the recent Chipotle case, the reputation and integrity of your business can suffer greatly as a result of a food borne illness incident or outbreak. Poor publicity can have significant financial implications including upfront costs and negative impact on customer loyalty. Food-Borne Illness insurance will cover the expenses you incur by hiring a public relations and crisis communications firm to assist you through the media response.

The cost of proper insurance coverage is insignificant in comparison to the coverage and protection your restaurant will receive in the event of a publicized food-borne illness incident. Food-Borne Illness insurance offers a broad array of options and it can prove to be a perfect supplement for preparation and foresight in confronting a crisis. To learn more about this coverage, or to get help in developing a crisis management plan, contact your broker.


Robert Fiorito
Robert Fiorito serves as Vice President with HUB International Northeast, a leading global insurance brokerage, where he specializes in providing insurance services to the restaurant industry. As a 25-year veteran and former restaurateur himself, Bob has worked with a wide array of restaurant and food service businesses, ranging from fast-food chains to upscale, “white tablecloth" dining establishments. Robert can be reached at 212-338-2324 or by email at For more information on HUB, please visit