Liability Insurance for  Food Manufacturer

If you're starting a small frozen food company, you’ll need a combination of insurance policies to properly protect your business from various risks—ranging from foodborne illnesses to employee injuries and property damage. At a minimum, you will need general liability insurance, which covers third-party claims of bodily injury or property damage—important if, for example, someone gets sick from consuming your product or slips in your facility.

You'll also want product liability insurance, which specifically protects against claims related to the food products you manufacture, including contamination, allergic reactions, or mislabeling issues. In many cases, product liability is included within a broader general liability policy but should be confirmed with your insurer. If you have a physical space—such as a commercial kitchen, warehouse, or office—you’ll need commercial property insurance to cover equipment, freezers, and inventory in the event of a fire, flood, or theft.

If you plan to hire employees, workers’ compensation insurance is legally required in most U.S. states and covers medical expenses and lost wages for work-related injuries. You might also consider commercial auto insurance if you or your employees are using vehicles to deliver products or transport supplies. Finally, business interruption insurance can help cover lost income if your operations are forced to shut down temporarily due to an insured event like a freezer breakdown or power outage.

If your food product causes someone to become sick, the damages would typically be covered under product liability insurance, which is a component of most general liability insurance policies.

Here’s how it works: General liability insurance protects businesses from a wide range of third-party claims, such as bodily injury or property damage. However, when the injury is caused specifically by a product you manufacture, sell, or distribute—such as a contaminated or improperly labeled food item—that falls under product liability.

Product liability is often included in general liability coverage, but it’s crucial to check your specific policy. If the foodborne illness resulted from something directly tied to your product (e.g., contamination, spoilage, improper storage, or labeling errors), product liability coverage would respond to claims for medical costs, legal fees, and damages.

In summary, yes—product liability insurance would be the coverage responsible for paying damages if someone gets sick from your food product, and it is most often included within a standard general liability policy, assuming your business activities are properly declared.

Small businesses may not need every policy type, but at minimum should consider general liability, product liability, property, and workers’ compensation. Coverage should be tailored to scale with your operations.

Not always. Regulatory bodies like the FDA (Food and Drug Administration) or USDA (U.S. Department of Agriculture) may mandate recalls if products pose health risks. Insurance helps cover compliance costs.