CHEF INSURANCE

LIABILITY INSURANCE AND INDEMNITY


There are two ways to transfer the risk to someone else - liability insurance and an indemnity.


  - Liability insurance (which members of The Chef Alliance have as a part of membership) will, at the very least, cover the legal costs should you be sued.  Even if you did nothing wrong, the fact that someone claims you did, means that you will have to hire a lawyer - and we all know how expensive that can be!


  - An indemnification clause in your contract is only good if the party indemnifying you has the financial resources to cover any potential costs of a claim.  The problem is that another person or business may not want to indemnify you or your business, and may not sign a contract with an indemnity clause.  But if they do go ahead and sign it, and a claim arises, they could raise the point that they were not responsible for the issue, and so should have no reason to indemnify you, leaving you high and dry and solely responsible for the claim.  You'll then have to fight the claim against you, AND a claim against the indemnifier for not honouring the contract.


DISCLAIMERS


So what other options do you have?  Rather than transfer the risk to another party, you can limit your risk.  There are three ways to do this - by a disclaimer, limiting the type of damages that you are liable for and limiting the amount that you could be liable for.

  - Disclaim warranties - this is generally used for distributors of food products, since they are not involved in the production process; their claim is that they are simply transporting product from one company to another, and are not involved in the production process.  For Chefs and food producers, it may be difficult to prove that the issue arose from negligence rather than wilful or intentional acts, so having this in your contract may not help you.  


  - Limit the types of damages for which you can be liable.  This is much easier to include in a contract.  For example, you can limit it to direct medical expenses or time taken off work.


  - Limit the dollar amount of the claims for which you can be liable.  For example, you can limit liability to a fixed dollar amount (e.g. $500) or to the amount of the contract or the retail cost of the product being sold.



Whichever method you choose, being in the foodservice industry will always leave you open to the risk of liability.  Discuss options with a legal professional, and protect yourself, your business and your finances with a solid contract.




Every day, consumers lives are devastated by food poisoning or exposure to allergens or contaminants.  Businesses are sued, bankruptcies are filed and lives are ruined.  We can all agree that there should be more oversight, more tests and higher standards.  This costs money and time, and even if we as a society had that, there would still be risks to consumers and the businesses that serve them.

Even with greater inspections and tighter regulation, there is always the risk that someone along the way will forget to carry out a procedure. We're human after all.  Or perhaps an ingredient is introduced that we didn't know would cause health issues.  So how do we, as businesses in the foodservice industry, reduce our risk?

ARTICLE - LIMITING YOUR LIABILITY


BY: CHEF SONIA, SUCCESS MANAGER AT THE CHEF ALLIANCE 
DATE: APRIL 17 2019