A shared kitchen carries two layers of insurance: its own, covering the building, the equipment, the people it employs and what happens on its premises, and its members', covering their products and their work in the kitchen, with the kitchen named on their policies. The policies that matter most in a shared kitchen are the ones people forget until a compressor fails overnight: spoilage and equipment breakdown, because the walk-in holds thirty members' food. Below is what the kitchen carries, what members carry, the certificates, a spoilage claim, and the records a claim needs. Insurance terms and limits are for your agent and broker to set; this is a guide to the questions.
The short version
- The kitchen: general liability, property, equipment breakdown, spoilage, business interruption, workers' compensation.
- Members: general and product liability, with the kitchen named as an additional insured.
- Keep each member's certificate of insurance on file, and its expiry date.
- Ask how a spoilage policy treats members' food in your walk-in; it isn't always covered.
- Write in the member agreement who's responsible for what, and for how much.
- After a loss, the claim depends on records: what was there, whose it was, what it was worth.
- TaroStack keeps what each member had in your cooler, by lot, counted. More below.
What the kitchen carries
| Policy | What it's for |
|---|---|
| General liability | Injuries and damage on the premises, a visitor slipping on a wet floor |
| Property | The building contents, equipment and improvements, against fire and theft |
| Equipment breakdown | Repairing or replacing the walk-in compressor, ranges and other equipment when they fail |
| Spoilage | Food lost when refrigeration fails or the power goes out |
| Business interruption | Lost income while the kitchen is closed after a covered loss |
| Workers' compensation | Injuries to the kitchen's own employees, commonly required once you have them |
| Umbrella | Extra liability limits over the other policies |
How insurance works for a small food business in general is in home bakery insurance.
What members carry
Members are commonly required to carry general and product liability insurance, with the kitchen named as an additional insured, so a claim about a member's product or work in the kitchen goes to the member's insurer first. Food trucks add commercial auto. Members with employees carry workers' compensation. Product recall insurance is the member's own question; how it works is in recall insurance coverage.
Certificates of insurance
A certificate of insurance is the one-page proof a member's insurer issues, showing the policies, limits, dates and the kitchen as additional insured. Collect one before a member's first booking, keep it on file, and diarize the expiry: a member whose policy lapsed in March is still booking in June unless someone checks.
A spoilage claim
Shenandoah Commons Kitchen, a made-up shared kitchen in Harrisonburg, Virginia, I use in these examples, loses its walk-in cooler compressor on a Saturday night in August. By Sunday morning, the cooler is at 58°F and everything in it is thrown out: its own butter and dairy, and the food on twenty members' shelves. Three questions follow. Is the kitchen's spoilage policy written to cover members' goods held in its care, or only the kitchen's own? Does the member agreement say who bears the loss? And can anyone say what was there? The first two are for the agent and the agreement; the third is records.
The records a claim needs
An insurer paying for spoiled food asks what was lost, whose it was, how much, and what it was worth, and when the temperature went out of range. A kitchen that counts members' shelves regularly, logs the cooler's temperature, and records what was thrown out and why, can answer in an afternoon. One that can't ends up estimating with twenty members, and the estimates rarely agree. How a temperature log is kept is in temperature log template.
Where this stops working
Twenty members' shelves in one walk-in, each changing every week, with nothing written down about what's on them. When the compressor fails, nobody can say what was there on Saturday night.
How TaroStack does it
TaroStack keeps what each member had in your cooler, by lot, counted.
Members' goods as theirs. With We make or keep goods for clients turned on, each member's goods are their own, received, counted where they sit and released, so what each had on their shelves is on record, by lot, at the last count.
Losses with a reason. Food thrown out after the failure is recorded as an adjustment with a reason, spoiled, for the kitchen's own stock and each member's, so the loss is listed by item and by owner.
Statements. Each member's monthly statement shows their goods held and how each moved, including what was lost, for their insurer as well as yours.
| The job | Notebook | In TaroStack |
|---|---|---|
| What was in the walk-in on Saturday | An estimate | Each member's goods, by lot, at the last count |
| Food thrown out after the failure | A trash bag count | Adjustments with a reason, by owner |
| Each member's loss for their insurer | Their word | Their statement |
| The kitchen's own loss | Guessed | Its own stock, at cost |
Keeping members' goods, with counts, releases and statements, is on Standard at $99 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.