Insurance, and what your policy excludes

This is a category where product liability is not a formality, and where an insurer will ask questions a food producer never faces.

Product liability is the exposure

The product is ingested daily, over months, frequently alongside medication, by people who may have conditions you know nothing about. The realistic claims are a contaminated ingredient, an interaction, or a product that did not contain what it said.

General liability covers somebody hurt at your premises. Property covers your stock. Neither covers harm caused by the product, and that is the one that matters here.

Why supplements are a hard risk class

Insurers price this category carefully because of its history: adulterated ingredients, undeclared pharmaceutical actives, and heavy metals in botanicals.

Which means your documentation directly affects both whether you can get cover and what it costs. Identity testing, certificates of analysis, batch records and 21 CFR 111 compliance are the things that make you an ordinary risk rather than an unknown one.

Some ingredients are effectively uninsurable for a small brand, and finding that out at quotation is better than after launch.

What buyers require

Retailers commonly specify product liability at $1 million or more and ask to be named as an additional insured. Marketplaces increasingly require it too.

Certificates take longer to obtain than a buyer will wait, particularly in a category insurers underwrite individually.

What to tell the insurer

Exactly what you make and what is in it. Every ingredient, because the risk sits in specific materials rather than in the format. That you manufacture rather than resell. Your testing program, in detail, because it is the thing that improves your terms.

And any claim you make, because a structure/function claim and a disease claim are different risks and one of them may not be covered at all.

References