The Easter Bunny’s Guide to Business Insurance
Each year at Easter millions of kilograms of chocolate are purchased and consumed around the world. In Australia alone close to $200 million is spent on Easter chocolate each year. There’s no denying that Easter is big business.
In the Easter game, the Easter Bunny is one of the biggest players, responsible for the delivery and distribution of Easter Eggs around the world. As one of the world’s highest holiday earners, he has a robust family business (his workers are his hundreds of bunny offspring) that needs financial protection from risks such as machinery failure, accidents/illnesses and other threats.
So what exactly should the Easter Bunny insure himself for?
May contain traces of nuts..
The biggest risk in the Easter Bunny’s business is his stock. No matter how careful or how closely food safety regulations are followed, there is still a risk of contamination. If his stock were to get contaminated, it would likely result in illness to a large number of customers. You can imagine the kind of lawsuit that would quickly follow.
Having Product Liability coverage would assure the Easter Bunny that he is protected against any claims of damages for illness caused by his products to his customers.
Also,what if traces of nuts were found in the chocolate but there wasn’t a proper warning label on the food?
The Easter bunny would most likely be facing a large cost due to fines and legal battles. A Product Liability policy would cover him for any claim for damages for illness caused due to fault of his product.
The egg hunt is on…the risk is high?
The Easter Egg hunt is an age old tradition, which can be traced back to the 17th Century Germany. The fun game involving searching for Eggs, either hardboiled or chocolate, hidden in various places such as a park or the backyard; seems a safe fun pastime with little consequences attached, and it is one of the Easter Bunny’s main events over this break.
In actual fact, if the hunt was organised as a public event, it could also represent a public liability risk, for which the Easter Bunny has maximum cover. If a child were to injure themselves during one of the hunts, the Easter Bunny could be seen to be at fault.
Production Line meltdown!
Easter stops for no one, not even the Easter Bunny. What if the machines at the Easter Bunny’s factory broke down or the refrigerators that the eggs are stored in stop working?
Within a Business Insurance pack the Easter Bunny would have cover for machinery breakdown and the deterioration of stock, covering the cost of repairs or replacement, as well as compensation for lost stock. He also has cover for Business Interruption, and should the unthinkable happen and production is halted for a sustained period, he can cover his losses.
Easter becomes dirty business…
Last year one of the Easter Bunny’s not so helpful helpers accidentally left some waste near their factory, causing pollution to the local environment. Luckily he had a Management Liability policy which helped him cover the costs of the pollution defence costs.
Also if the Easter Bunny were to be audited by a regulatory body, such as a food safety authority or an OH&S board, and found to have broken their regulations, Statutory Liability (which is usually part of a Management Liability policy) can cover him and his business for the associated fines. Of course this coverage doesn’t cover deliberate, intentional or reckless acts or omissions, so if the Easter Bunny did something out of character he wouldn’t be covered.
The Easter Bilby vs The Easter Bunny
The Easter Bilby has been growing in popularity in Australia steadily year on year, with many chocolate brands favouring the endangered Bilby over the Bunny.
If the Easter Bunny were to suddenly lose their Australian contract they would be losing one of the biggest sources of income.
The loss of a major customer, contract or credit facility is classified as a “Crisis Event” in a Management Liability Policy. This type of policy can also cover an unexpected death, disability or criminal conviction of any director or officer, a man-made disaster or any criminal or fraud investigation.
So what can the Easter Bunny teach us?
No matter the complexity or uniqueness of your business, there are still going to be risks associated, even if you’re the Easter Bunny. While it is tempting to put money elsewhere, it can be the last line or only line of defence against business failure.