Grocery store owners may assume that their commercial property insurance will provide coverage in the case of major food spoilage after a power outage. However, this is not necessarily true.
Many standard commercial insurance policies exclude losses stemming from off-site power outages or damage to overhead power lines. These policies limit coverage to damages caused by events on your store’s premises. This means that if a power outage in your area impacts your store, you may not have coverage. As a result, if your inventory spoils, you could have to eat the losses.
If a Power Outage Occurs
Prompt action can help you minimize losses after a power outage.
Call the utility company immediately. Make sure the number is posted clearly.
Reduce the risk of spoilage by keeping doors to refrigerators, freezers and walk-in coolers closed. Also consider adding dry ice or relocating perishable food if necessary.
Power outages and surges can damage appliances. See your instruction manuals for information on how to reduce damage.
Identify spoiled products and document the spoilage with photos before disposal.
Take photos of the damaged product.
Contact your insurer immediately.
Protect Your Grocery Store
Don’t wait for a loss to occur. Take steps to protect your grocery store now.
Backup generators can help keep the power going during an outage. However, generators can fail, and they may not provide sufficient energy during prolonged outages. That’s why grocery-tailored insurance is so essential.
Although standard policies typically have exclusions related to losses caused by off-site power outages, coverage for power outages and food spoilage is available for grocery stores. An endorsement can expand protection to include coverage for damages caused by off-premises events and expand protection to include both spoilage of perishables and loss of income.
Considering the large amount of perishable food inventory that a grocery store has at any time, securing the right insurance is essential.
Talk to the grocery insurance team at RiskPoint Advisors to ensure you have adequate protection against this costly and dark exposure.
Joe Scarpello Melissa Johnson
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