What If a Customer Claims They Got Sick From My Restaurant – Who Pays?

Claims process initiation and timeline:

Customer notification stage:

• Customer notifies restaurant of alleged illness (directly or through attorney)
• Restaurant must immediately report claim to insurance carrier
• Reporting deadline: Typically 24 to 72 hours as specified in CGL policy conditions
• Late reporting may jeopardize coverage

Insurance carrier response:

• Insurer assigns dedicated claims adjuster
• File opened with claim number
• Initial investigation begins within 24 to 48 hours
• Defense attorney assigned if litigation threatened

Investigation components conducted by claims adjuster:

Medical documentation review:

• Medical records documenting actual illness
• Laboratory testing confirming specific pathogens
• Hospital admission records if applicable
• Physician diagnosis and treatment plans

Health department coordination:

• Health department inspection reports
• Violation citations or warning notices
• Outbreak investigation results
• Multi-victim incident tracking

Restaurant records examination:

• Food safety logs and temperature records
• FDA Food Code compliance documentation
• Employee health screening records
• Supplier invoices and ingredient sourcing
• Cleaning schedules and sanitation logs

Causation analysis:

• Meal timing correlation with illness onset
• Incubation period consistency with pathogens
• Other customers reporting similar symptoms
• Epidemiological evidence linking restaurant to illness

Coverage determination based on policy definitions:

• Illness constitutes “bodily injury” under policy language
• Evidence establishes causation linking illness to restaurant
• Claim falls within products-completed operations scope
• No policy exclusions apply to circumstances

Three-category payment structure when coverage applies:

1. Legal Defense Costs (paid separate from limits):

• Attorney fees for legal representation
• Expert witness expenses (food safety specialists, epidemiologists)
• Court costs and filing fees
• Investigation expenses
• Defense costs do NOT reduce coverage available for damages

2. Medical Payments Coverage (Coverage C):

• Immediate payment available: $5,000-$10,000
• No liability determination required
• Goodwill payment potentially preventing lawsuit
• Covers emergency treatment, hospitalization co-pays
• Functions as early settlement for minor cases

3. Settlement or Judgment Payment:

• Negotiated settlement amounts with plaintiff
• Court judgment amounts if litigation proceeds to verdict
• Paid up to per occurrence limit ($1,000,000 typical)
• Products-completed operations aggregate ($2,000,000) caps annual total
• Multiple claims exhaust aggregate during policy period

Scenarios creating complications in claim payment:

Cases lacking medical documentation:

• No physician diagnosis of actual illness
• Customer reports discomfort but no documented condition
• CGL policies require documented bodily injury
• Mere complaints without medical proof result in claim denial

Delayed illness claims (months after consumption):

• Causation challenges proving restaurant link
• Difficulty establishing meal as contamination source
• Other food sources during intervening period
• Evidence degradation over time

Supplier contamination vs. restaurant preparation:

• Both covered under CGL policy
• Coverage applies regardless of contamination origin
• Named insured restaurant covered for supplier failures
• Restaurant may seek reimbursement from supplier later

Health department citations impact:

• Violations do NOT automatically establish liability
• Strengthen customer claims during negotiations
• Provide evidence of negligence for plaintiff attorneys
• Significantly influence settlement amounts

Documentation essential for claims defense:

• Temperature logs (refrigeration and cooking)
• Supplier invoices proving ingredient sourcing
• Employee health screening records
• Cleaning and sanitation schedules
• Food safety training certificates
• Hazard Analysis Critical Control Point (HACCP) protocols

Impact on insurance costs and renewability:

• Frequent illness claims increase renewal premiums 25 to 50%
• Multiple claims may result in policy non-renewal
• Claims-free years build favorable underwriting history
• Loss prevention programs reduce premium increases

Proactive food safety management:

• HACCP implementation for contamination prevention
• ServSafe or equivalent staff certification programs
• Documented temperature monitoring systems
• Allergen management procedures
• Supplier verification and quality standards
• Regular equipment maintenance and calibration

Restaurant owners should maintain comprehensive food safety documentation including temperature logs, supplier invoices, employee health screening records, and cleaning schedules, as these records provide critical defense evidence when illness claims arise. Additionally, restaurants experiencing frequent illness claims may face policy non-renewal or premium increases of 25-50% at renewal, making proactive food safety training and Hazard Analysis Critical Control Point (HACCP) implementation essential for both customer protection and insurance cost management.