Please understand that the following is meant as a general guideline for identifying where your business may have insurance risks. It also provides suggestions on how to reduce those risks. It is not meant to determine whether a business is or is not insurable. McCaleb-Metzler can insure your business whether you do or do not fit the below description.
Description of operations: Canning operations process, package and sell a wide variety of food products in metal, glass, or plastic containers. Products include fruits, vegetables, fish, shellfish, poultry, or meat. The key to effective canning is the length of time each product is cooked or blanched. Meats, fish, poultry, and shellfish need thorough cooking to kill bacteria and disease. Fruits and vegetables vary in their blanching and cooking time based on the kind of fruit or vegetable and the processes necessary for sterilization. All food canning and processing falls under the jurisdiction of the Food and Drug Administration, so it is important to meet standards and regulations.
Property exposures come from the cooking equipment and automated conveyance and processing machinery. All machinery and equipment must be inspected and maintained regularly to avoid wear and tear or overheating losses. Wiring must be up to date and of sufficient capacity. All machinery should be grounded to prevent static buildup and discharge. Due to government controls and regulations -- state, local, or federal -- major portions of stock and raw materials that have been exposed to even a small fire may have to be destroyed because of possible contamination from the fire, smoke, heat or water. The raw material and final product should be kept separate from the processing operations to lower the potential total loss. The business income exposure can be very high as some production equipment may be difficult to repair or replace quickly.
Equipment breakdown exposure is high due to the automated machinery and equipment used in canning operations. All machinery and equipment must be regularly inspected and maintained. If there are boilers, operational safety valves must be in place.
Crime exposure is employee dishonesty of both inventory and money. The inventory must be under the supervision of more than one individual so that there are checks and balances. Regular audits by an outside firm should be a standard part of procedures. If drivers pick up checks or accept money, there is both an employee dishonesty and theft of money and securities concern.
Inland marine exposure comes from goods in transit. Overturn or collision may cause a total loss with no salvage. Trucks must be well maintained and inspected regularly. Valuable papers and records exposure is due to proprietary recipes, inventory records, customer files, quality control records, and contracts with suppliers and distributors.
Premises liability exposure may be significant as drivers of pickup and delivery vehicles, repairmen, and inspectors regularly visit the premises. There must be clear markings as to where trucks may go, and their movements must be controlled to keep the area safe and secure. Visitor access must be limited in the processing area. However, if tours are given, exposures increase significantly. Good housekeeping is critical due to the potential for slips and falls. Spills of liquids should be promptly cleaned and warning signs posted.
Products exposures normally result from contamination, spoilage and foreign objects in the finished products. Raw milk and meat products should be tested before processing. Botulism can occur in the can itself or can result from problems in processing or sealing. Cans should be inspected prior to filling. Good procedures need to be in place for sanitary working and processing conditions. The workplace must meet all FDA specifications and be arranged in such a way that foreign substances are prevented from entering the processing area. An on-site laboratory is recommended to verify quality control. Pest control and the chemical applications used are key processes to evaluate. Stock dating and rotation are important factors. An effective recall program must be in place for quick activation.
Environmental impairment can occur from fuel storage in underground or above-ground tanks.
Automobile exposurescan be significant if the risk picks up raw materials from farms or distributors or delivers finished goods. All drivers must have a commercial license and their MVRs must be checked regularly. There must be complete documentation of maintenance on all vehicles.
Workers compensation exposure results from burns caused by the cooking and processing machinery and equipment, back and lifting injuries, or hernia, if manual conveyances are used. The automated machinery can cause injury and loss if not properly guarded. Employees may be exposed to chemicals or excessive noise. Adequate safety equipment should be required for employees in processing areas. Forklifts should be equipped with backup alarms. Slips and falls can result if the floors and premises are not kept clean. Drivers are also subject to lifting injuries if they load, unload, or help stock shelves for customers.
Minimum recommended coverage:
Building, Business Personal Property, Business Income, Equipment Breakdown, Accounts Receivables, Computers, Valuable Papers and Records, Goods in Transit, Employee Dishonesty, General Liability, Products Recall, Employee Benefits, Environmental Impairment, Umbrella, Business Auto Liability and Physical Damage, Hired and Nonownership Auto, Workers Compensation.
Other coverages to consider:
Employment Related Practices
Reprinted copyrighted material with permission by the Rough Notes Company, Inc.
