Foodborne Illness Continues to Plague Food Chains

Restaurants might lose more profit than they thought

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Nov 11, 2015, 02:25 ET

Restaurants are associated with many of the foodborne illnesses in the US. Are you taking the proper precautions to prevent damage to your brand and bottom line?

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KANSAS CITY, Mo., Nov. 11, 2015 /PRNewswire/ -- Chipotle Mexican Grill is reopening 43 restaurants in Washington and Oregon today. The locations were temporarily closed after more than 40 customers contracted E. coli after eating at some locations in the area. While the source of the outbreak has not been determined, many in the industry are wondering if they are prepared for a similar incident.

"The concern for food safety continues to grow as our global economy creates demand for more food to be shipped internationally," says Ian Harrison, Partner for Lockton Companies. "Contaminated food can have a devastating effect on food processors, restaurants, and their customers."

Not only do restaurants lose money from temporarily closing locations and returning their customers to health, if they are part of a larger chain, damage can be incurred to the entire trade name.

"The owners of the trade names place a large effort into training and auditing their corporate locations and those franchisees using the logo to ensure a consistent product," says Harrison. "But mistakes happen, and when they occur, the whole chain is adversely affected."

Harrison's newest white paper, "'Serving Up Safeguards Against Foodborne Illness," describes what underwriters are offering as part of a comprehensive income protection insurance policy and, vitally important, incident response and loss mitigation services. It also covers the development in the London market for foodservice and restaurant operations for wider coverage against reputational risk.

Confidence in food quality underpins the entire restaurant industry, and it is the cornerstone of the franchising opportunities spawned by the choice of dining concepts being developed. It is no surprise that revenue protection insurance is in demand. Understanding the major differences in wording, pricing, and consultants is key to evaluating which product is best suited to your needs.

About Lockton
More than 5,600 professionals at Lockton provide 48,000 clients around the world with risk management, insurance, employee benefits consulting, and retirement services that improve their businesses. From its founding in 1966 in Kansas City, Missouri, Lockton has attracted entrepreneurial professionals who have driven its growth to become the largest privately held, independent insurance broker in the world and 10^thlargest overall. For seven consecutive years, Business Insurance magazine has recognized Lockton as a "Best Place to Work in Insurance." To see the latest insights from Lockton's experts, check Lockton Market Update.