A survey conducted by WTW, involving 400 senior decision-makers in the food and beverage industry, revealed that nearly half of the respondents identified business interruption as their primary internal risk. Despite this, 29% admitted to having no coverage for such interruptions. This gap in insurance coverage is alarming, especially considering the myriad of challenges these businesses face, ranging from natural disasters to supply chain disruptions.
Ian Poustie, WTW's industry lead for Australasia, emphasized the evolving nature of risks in the food and agriculture industry. He pointed out that traditional threats like product recalls and facility fires are now compounded by factors such as climate change-induced natural disasters, trade disputes, and regulatory changes. Poustie advised businesses to reassess their critical issues and consider enhancing their risk management strategies to better protect against these evolving threats.
One proactive measure that businesses can adopt is the regular review of their business continuity plans. Encouragingly, the survey found that nearly half of the food and beverage companies are already reviewing these plans every six months, with almost a third doing so quarterly. Such frequent evaluations indicate a growing recognition of the importance of preparedness in the face of increasing threats.
Additionally, WTW recommends that food and beverage businesses consider environmental impairment liability insurance. This type of coverage can address costs related to both historical and gradual pollution, aspects that are typically excluded from general policies. Incorporating such insurance can provide a more comprehensive safety net for businesses operating in this sector.
For restaurant and café owners, understanding and mitigating the risks associated with business interruptions is crucial. Ensuring that your insurance coverage aligns with the specific challenges of the food industry can safeguard your business against potential financial setbacks. Regularly updating your business continuity plans and exploring additional coverage options, such as environmental impairment liability insurance, can further enhance your resilience in an unpredictable environment.
