Food & Beverage

From farm to fork, Marsh collaborates with food and beverage companies to identify and mitigate the various risks they face.

As consumers become more health, social, and environmentally conscious, food and beverage companies around the world are evolving their business models to meet these needs.

Companies are increasing their adoption of technology and expanding supply chain structures to maintain market share, while facing challenges from severe weather events, increasing regulations, and cyberattacks. The COVID-19 pandemic accentuated and exacerbated many of these risks as some supply chains failed or were severely curtailed.

While these evolving trends carry significant risks, they also create new opportunities. Choosing cost-effective risk financing alternatives and implementing risk management practices that exceed industry standards is critical for many food and beverage businesses, especially while capital is tight as they emerge from the lowest points of the pandemic and seek to capitalise on new commercial possibilities.

Marsh helps food and beverage companies – from manufacturers and processors to distributors, wholesalers, and restaurants – anticipate the risks they face, understand their impacts, and implement comprehensive plans to mitigate them.

Whether fine dining, grabbing a quick bite, or selecting quality ingredients to cook at home, Australian consumers have broad and varied tastes. Beyond quality and flavor, food and beverage companies must also keep pace with evolving health and environmental demands such as allergy-conscious menu options and socially-responsible manufacturing and distribution. Cultural sensitivity and inclusivity are also crucial to companies’ brand strategies and policies.

Over the past year, civil unrest, severe weather events, and the COVID-19 pandemic further tested their supply chains and highlighted the need to embrace resilience in their enterprise risk management strategies.

Marsh's Food and Beverage Specialists help companies identify, prioritise, and manage the various risks they encounter. From product contamination to employment practices liability, slips and falls, EPS (expanded polystyrene foam Sandwich paneling used in cold storage facilities) to cybersecurity threats. We can help you implement strategies and solutions to protect your physical and people assets, and your customers, with a focus on sustainability and resilience.

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FAQs

Some of the top risks facing food and beverage companies include:

  • Cyber risk: Cyber risk has implications beyond customer privacy concerns. In addition to the possible theft of customer data, companies should be aware of malware and ransomware attacks which can shut down operations.
  • Property risks stemming from severe weather events: The increasing severity and frequency of weather events can damage crops, shut down processing facilities, or otherwise disrupt the supply chain. Weather risks include flooding, bushfires and convective (hail) storms.
  • Property risks stemming from EPS: EPS paneling is commonly used in cold storage facilities. When a building with EPS panels catches fire, the result is almost always total destruction. The panels spread the fire quickly, and then lose structural integrity, often resulting in the collapse of the building.
  • Product contamination: Product contamination can lead to foodborne illnesses and have catastrophic outcomes, including loss of life. Such incidents can damage a company's reputation and affect its bottom line.
  • Employee safety: Workers in the food and beverage industry are at risk of on-the-job injuries due to operating large equipment or working in often hectic food preparation environments. Medical, return-to-work, and claims costs tend to have the greatest impact on a company's total cost of risk. 

These risks can be insurable.

The insurance needs of food and beverage companies may vary by geographic location, product type, and other factors.

In many developed nations, companies of any description are required to carry workers’ compensation insurance (sometimes called “workers’ comp”) or its equivalent, in case of accidental injury to or the death of an employee. Due to the inherent risks of working in the food and beverage industry, especially for personnel assigned to production lines with heavy equipment, it is essential that any employer provide this type of coverage where legally obligated.

Other types of insurance include:

  • General and Products Liability insurance, which provides indemnity for any legal actions taken against a food and beverage company for third party injuries or damage to property resulting from products manufactured and supplied as well as other activities.
  • Directors’ & Officers’ Liability insurance protects the personal assets of corporate directors and officers in the event they are personally sued by employees, vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing a company (Side A). The insurance can provide indemnity to the company for the indemnity they provide to director and officers (Side B) and also indemnity to the company for security class actions (Side C).
  • Crime insurance covering the theft of money and other items.
  • Marine Transit insurance which provides cover for the transportation of manufactured goods, raw materials plant, equipment and other assets. This insurance covers such goods transported within the country of domicile and also imports and exports.
  • Motor Vehicle insurance covering any vehicle owned or leased by the company.
  • Corporate Travel insurance covering employees travelling interstate or overseas on company business.
  • Cyber insurance is an important coverage that food and beverage companies should consider as they are increasingly leveraging technology in their business models and day-to-day operations. A cyberattack can significantly impact your organisation, from business interruption to other financial losses.
  • There are a number of other insurance products that may be of interest that are not typically purchased by food and beverage companies. One for instance is Parametric insurance (also called index-based insurance). It is a non-traditional insurance product that offers pre-specified payouts based upon a trigger event. Parametric insurance policies have most frequently been implemented in developing economies, oftentimes for agriculture insurance.

Managing workplace safety risks can be challenging for food and beverage companies. Some risks such as fires and explosions, ergonomic injuries, or slips and falls may be preventable in many cases, but others like pandemics can be difficult to predict and manage. It is important for food and beverage companies to work with trusted risk advisors when assessing their workplace safety risk profile and creating mitigation strategies that meet with company objectives as well as any regulatory requirements.

Marsh's Workforce Strategies Consultants offer a full suite of workplace risk management solutions which leverage data and analytics to provide insights into your potential risk exposures. Our specialists use a tailored approach to help you identify, prioritise, and implement programs to effectively get ahead of your workplace risks before they pose a problem.

In order to remain resilient and competitive within the industry, food and beverage companies need to stay informed of emerging risk issues, regulatory developments, and trends which could impact their bottom line. While there are many sources of information they can turn to, they should seek ones that provide a more holistic view of the risks they face. The food and beverage industry is constantly evolving as new seismic shifts with significant risk impacts continuously emerge.

Marsh's Food and Beverage Practice publishes quarterly Food for Thought insights that highlight current industry trends and challenges, share how companies are successfully navigating them, and offer risk management best practices that can help mitigate the impacts. Our annual in-person roundtables and forums and regular webinars and peer-to-peer calls help further facilitate conversations on key issues and trends important to you.

Our people

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Ron Tomsic

National Client Development Leader

  • Australia

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Marc Clements

Transport, Food and Beverage, National Practice Leader

  • Australia

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”