Investing in a food safety software not only helps protect the consumer and food product and quality, but it also helps demonstrate a commitment to risk reduction that insurance agencies look for when offering lower premiums.
As the spotlight for consumer-demanded transparency and food safety continues to shine on the food industry, it is more important than ever for businesses to ensure they deliver safe, quality products to the consumer. Investing in a food safety software is one way that food companies can take a proactive approach to ensure that safety and quality while meeting evolving regulatory requirements.
Food safety software allows businesses to manage and monitor the supply chain, and ensure product transparency, quality, and real-time access to data needed to address food safety events. The right solution will protect the consumer (and your brand) and ensure seamless compliance documentation and management. Have you ever thought about how investing in a food safety software can also help lower your insurance premium?
Insurance for Food Regulation
A recent study provided insight into how insurance companies can play a more significant role in the food industry and serve as critical stakeholders in regulating food safety. With increased regulations for food safety and quality under the New Era of Smarter Food Safety, there has been discussion across the industry that the government does not have the resources to provide adequate oversight for that increased regulation – this includes inspections, audits, and general compliance management. In contrast, as more farmers expand their policies for coverage, the resources available for insurance companies to cover those audits and inspections also grow, ultimately positioning insurance companies as key stakeholders in food safety regulation.
The study outlines the current benefits and concerns of utilizing insurance companies for food regulation, particularly for fresh produce farms, which are more susceptible to damage or contamination. In addition to the resource advantage that insurance companies potentially hold over the government, the study states that insurance companies can promote risk reduction through incentives for farmers (lower insurance premiums, loss control advice, and coverage exclusions) and encourage more rigorous third-party audits since insurance is liable for costs of food safety failures.
In her chapter of Ensuring Global Food Safety (Second Edition), FoodLogiQ’s CEO Katy Jones outlines the advantages of a transparent supply chain.
“With a managed, improved and efficient food supply chain in place, businesses can begin to reap other benefits. This can include financial gains, such as an increase in credit request approvals and a reduction in insurance premium costs .“1
Investing in a Food Safety Software
It is also important to remember that simply having insurance coverage does not eliminate the possibility of a food product recall; as such, it is still the responsibility of the business to take necessary steps to protect food quality and safety, act quickly and efficiently, and mitigate any further impact to the consumer – or their brand.
Investing in a food safety software not only helps protect the consumer and food product and quality, but it also helps demonstrate a commitment to risk reduction that insurance agencies look for when offering lower premiums. A food safety software allows businesses to:
- Enact a quicker, more effective food product recall
- Ensure suppliers and stakeholders stay on top of compliance documentation, assessments, or other certifications
- Access real-time and transparent data that you can submit to an auditor or underwriter if an insurance company needs to step in
By nature, these factors can help keep your premium low and the overall costs of a policy at a minimum. If your business is interested in learning more about how investing in food safety software can benefit you, contact our team of experts at FoodLogiQ today.
1Katy A. Jones, Chapter 2 - Safety and security: the costs and benefits of traceability and transparency in the food chain, Editor(s): Aleksandra Martinović, Sangsuk Oh, Huub Lelieveld, Ensuring Global Food Safety (Second Edition), Academic Press, 2022, Pages 5-9, SBN 9780128160114, https://doi.org/10.1016/B978-0-12-816011-4.00028-8.
