Food product Claims Hong Kong, product liability insurance for food

The food and beverage industry is one of the most dynamic industries worldwide. The industry includes restaurants, cafés, fast-food joints, pubs, food manufacturers, catering businesses, food transportation services, and more. It’s one of the most exciting industries where the flavours are never-ending.

The biggest concern every F&B business owner must be prepared for is food safety and product claims. A minor food product defect or food safety mistake can result in a massive lawsuit against the brand.

These claims can arise from anywhere, no matter how successful or new the business is. With one food product liability lawsuit, your best days can become one of your worst nightmares.

The following article will point out the top common food product claims that can ruin any food business in the industry.

What Is Product Liability Insurance?

Product liability insurance will provide an F&B business coverage against expenses related to claims against a food product sold, made or distributed that caused bodily injury or property damage. The insurance will mainly help the business cover legal costs, compensation costs and recovery from business damages.

Accidents and food product defects can happen at any point, and an F&B business must be prepared with the proper insurance to help the victim and their business.

Top 5 Food Product Claims 

 Food Poisoning

We have all had those moments where we think we have had a decent meal, but one hour later, the toilet has become our best friend. Food poisoning is one of the most common food product defects that can result in a food product claim. It could be bad seafood or expired ingredients. The food defect can cause the consumer to get seriously ill to the point they need professional medical care.

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The restaurant or business may give you a refund or a free meal when you complain. However, the illness may be too serious to be compensated with a free meal. In many cases, the victim will sue the business related to the consumed product. 

For example, when a CNY bride sued the caterer after 100 guests were violently ill at the reception. The food business will have to pay compensation and medical costs to each guest, plus compensation costs for ruining the wedding.

A lawsuit like this could happen to any business in the industry. Hence, all F&B companies must focus on keeping their food safety standards as high as they can.


Most food product defects originate from negligence, but sometimes the negligence is more evident. Especially in the F&B industry, customers are key, and a business must provide what they expect and deserve. So even if a customer requests no cheese on a cheeseburger, the company must comply, no matter how absurd the request is. One mistake can lead to an expensive food product claim.

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Customers can be allergic to some ingredients or certain types of packaging. Hence, they request a product without it. An allergic reaction can be severe and could even possibly result in death.

One of the most common negligence claims is nut allergy lawsuits. For instance, a customer sued Starbucks, claiming she suffered a severe allergic reaction despite warning the barista of her tree nut allergy. When informed about an allergy, a business must either decline to serve that person or keep that specific ingredient far away from that order.

Foreign Substance Contamination 

Foreign Substance, food product insurance

There are countless things we do not want in our food, from bugs to plastic. But unfortunately, some unlucky people have found weird and disgusting foreign substances in their food products. Some notice it before consuming it, and sometimes it’s too late. Foreign substance contamination can result in severe illness and food poisoning.

If a customer notices a foreign substance in their food or drink and has fallen ill due to it – they can file a food product claim and sue the business. This food product defect can cost a company millions and huge reputation damage. 

For example, Costco is being sued after a family found bugs in a product they bought. As a result, the huge grocery shop has to pay the family a settlement of USD 200,000 to compensate for their medical condition post-consumption. Once again, a situation like this can easily be avoided by regularly checking on food safety and the quality of products. 

Failure to Warn/ Lack of Labels 

Warning labels are among the most critical factors when selling food products to consumers. A label must include ingredients, allergies, temperature and material warnings. These labels are a must, especially with food, as one missed ingredient or warning can harm customers and put them in danger. 

Failure to Warn-product label- food - Product Recall Insurance

At times, a business must warn even the most obvious facts, such as a ‘Hot Warning’ on a hot coffee. Unfortunately, there have been many cases where customers have fallen ill or suffered severe injuries due to the lack of warning labels on food products. 

There have been food product claims against food brands and their marketing team for false labelling. These include – ‘all-natural’, ‘sugar-free’, ‘organic’ and more. For example, a sweetener brand – Cargill Inc., was sued as they labelled their sweetener as “natural, and later, experts discovered that many chemicals were involved. A lawsuit like this can ruin the brand’s image and will result in substantial financial loss.

Will Product Liability Insurance Cover Food Product Claims?

All these food product claims will be covered by product liability insurance. The insurance will cover most financial losses, such as medical compensation settlement and legal costs. Therefore the insurance allows a business to worry and stress a bit less when faced with such claims and focus on recovering.

Another benefit of product liability insurance is the peace of mind it offers. A company won’t need to stress every time a customer buys a product; if things somehow go wrong, they are covered. Although this doesn’t mean the insurance allows your business to be carefree, food safety is still crucial.

Finally, the insurance will not cover any product recall expenses, and a product recall insurance extension will need to be purchased.

Product liability insurance should be one of the first insurance F&B businesses should purchase to deal with food product claims.


To Learn More about product liability insurance and cover food product claims in Hong Kong and Asia, contact Red Asia Insurance.