A profitable food business needs a lot of work and planning that includes fresh ingredients, the required processing plant with the right machines and equipment and of course a dedicated hardworking workforce. However, such intense preparations don’t make a company immune to setbacks that may come in the form of lawsuits, accidents, natural calamities or even a disgruntled workforce.
Therefore, for a business to succeed and enjoy longevity, there are certain risks in the food industry that should be managed carefully:
1. Supply-Chain Risk
Suppliers are a core factor in the food industry. These are the people that bring in the fresh produce and other necessary chemicals required in the processing plant. A loss of a supplier due to transportation or price issues and adverse weather or even low-quality products can lead to a huge loss which trickles down to clients. Make sure to have a plan b like business interruption insurance cover in place to shoulder such a loss.
2. Equipment Risk
Most food processing plants have automated equipment that is susceptible to mechanical glitches that come with the territory caused by power surges etc. which can cause immense damage to the production process. Equipment breakdown insurance is what will save you from such damages that can be denting to your bottom line; business interruption insurance cover takes care of the income loss part caused by such a breakdown.
3. Food Safety and Recall Risk
Millions of illnesses are food-related which end up in deaths in worst-case scenarios or hospitalization for days on end. Food poisoning from contaminated food can cause widespread catastrophes which result in lawsuits and compensation both being very costly. Therefore, a coverage that covers such a risk should be in place which should not only cover the lawsuit and compensation but also the cost that comes with withdrawing such food from the market. Electric actuated butterfly valves help food and beverage processors meet this challenge by assisting them in maintaining product integrity and standards and increasing the time efficiency of a number of operations and processes.
4. Contamination and Spoilage Risk
This can be caused by machine failure, power failure, using the wrong ingredient, and many more. Spoilage coverage is necessary to cover such instances that are usually beyond your control.
5. Cyber Disruption Protection
With cybercrimes becoming increasingly common it is a risk that can be disruptive and damaging as most machines are automated. A food industry might be targeted to obtain important information from files stored in their network. They should, therefore, get insurance cover for cyber liability to take care of such attacks that can be informed of hacks or a virus that are hard to predict.
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