Grocery insurance down to the cooler.

SB 1383 food recovery and donor protection

California's SB 1383 regulations make large grocers Tier One commercial edible food generators. Under 14 CCR 18982, that means a supermarket (a full-line, self-service retail store with gross annual sales of $2,000,000 or more that sells dry grocery, canned goods or nonfood items and some perishable items) or a grocery store with a total facility size of 10,000 square feet or more. CalRecycle says that square footage includes storage areas and restrooms. Jurisdictions have been inspecting Tier One generators since January 1, 2022. What the rules require:

• A contract or written agreement with food recovery organizations or services, so the store donates the maximum amount of edible food it would otherwise throw away.
• No intentional spoiling of edible food that could be recovered.
• Records, including the quantity of food collected or self-hauled for recovery. CalRecycle expects each store, including each store in a chain, to keep its own records and produce them when the jurisdiction asks.

The liability side is Civil Code 1714.25, as amended by AB 1219. A person, gleaner or food facility that donates food fit for human consumption at the time of donation to a nonprofit charitable organization or food bank is not liable for damage or injury from eating it, except for injury from gross negligence or intentional misconduct in preparing or handling the food. Its definition of person names retail grocers. Nonperishable food past its labeled shelf-life date is protected. Perishable food past that date is protected only if the person who distributes it to the end recipient makes a good-faith evaluation that it is wholesome.

That statute is a defense to a lawsuit, not insurance. When I review your general liability, I ask the carrier how it handles a claim tied to donated food.

What to read for in your policy

Here is what I read for in two parts of a grocery program, using IRMI's descriptions.

Power outages that start down the street

IRMI describes utility service interruption coverage as insurance for loss caused by a lack of utility services, such as power, when a covered cause damages property away from your premises, usually the generating station. IRMI notes it is added by endorsement rather than built into a standard property form, and that these endorsements vary widely. For a store full of perishables, read for:

• Which utility services are named: power, communication, water.
• Whether it responds to both direct damage, such as spoiled stock, and time element loss, such as lost income, or only one.
• Whether damage to transmission lines counts.
• Whether the limit matches what is in your walk-ins and display cases on a full delivery day.

A compressor or control failure inside the store is a different question; see what equipment breakdown insurance covers.

Recall and contamination

For a contamination recall, IRMI lists expenses beyond product-related suits that may call for a separate recall policy: communication, transportation, warehousing, employee overtime, product disposal, and replacing or redistributing product. It describes a standalone product recall policy as designed for those logistical costs but not lost profits unless endorsed, and describes accidental contamination and malicious tampering coverage as similar but distinct. Read whether your program has recall coverage at all, which of those two events it addresses, whether lost profits are included, and whether it reaches private-label and in-store deli items as well as brands you resell.