Define who is liable
Who is responsible for the food at each point in the process, from order to receiving to storage to packing to delivery?
Consider establishing an agreement with farmers that identifies the circumstances under which they would be held responsible for issues with food. You’ll want to address food safety, quality and financial liabilities.
In addition, consider establishing an agreement with customers that identifies the circumstances under which they would be held responsible for any issues with the food. Make it clear how long customers have to notify you of any food quality issues to receive a credit.
It’s good to have these guidelines visible on your invoices. It will help drivers and customer service staff when confronted with any problems that arise.
Whose insurance covers what?
If customers pay you directly, then most larger institutions can only buy from you if you have a $5 million umbrella policy. This doesn’t mean your farmers are off the hook. They will also need to provide you with evidence of appropriate liability insurance. Nevertheless, their insurance policies will not be required to be as large. Use your insurance agent as a resource and ask for recommendations about the appropriate types and levels of insurance for your operation.