Insurance giant Chubb Ltd. released an advisory on potentially costly issues for supermarkets. Because identifying likely scenarios is the first step in crisis planning, the report is a nice resource for communicators in that industry. It touches on both crises arising from new areas supermarkets are expanding into and more-typical issues such as slip and falls. Reading it would be a good exercise for professionals in other industries.

Chubb, based in Warren Township, New Jersey, is the world’s largest publicly traded property and casualty insurer. While most of the advice in “Supermarkets: Addressing the Risks in an Evolving Market” goes toward limiting legal liability, it is also sound guidance for limiting reputational liability.

“It only takes a single incident to cause irreparable damage to a brand’s reputation and financial health,” Chubb Excess Casualty Vice President Nicholas Davis, one of the authors, said in a Jan. 23 press release announcing the report. “In such a competitive field, it’s prudent for supermarket operators and management to be diligent and take extra precautions to help mitigate a wide range of exposures.”

The Chubb advisory seeks to make supermarkets aware of potential dangers arising from new areas they’re expanding into. “As supermarkets add new services and products to attract and retain customers in a fiercely competitive business, they face a wider range of risks today than in the past,” Chubb writes.

For example, stores are offering daycare services or supervised play areas, which require proper staffing (including careful hiring) and training. And if the store includes a pharmacy, it’s subject to the same liabilities as that industry; a large drug theft or an incorrect prescription that leads to a customer emergency could harm the company’s reputation.

Tainted Food

The advisory also details the more-traditional crises a supermarket could face. Obviously, preventing tainted food is a crucial issue. Chubb recommends stringent quality controls, including having inspectors oversee food handling. If the store offers prepared food, it “should not overlook the possibility that disgruntled employees may try to put something into the food to damage the store’s business and reputation,” the report says.

Slip and falls remain a prime concern for supermarkets, according to Chubb. They can result in large damage awards. The report cites a case in which a jury rejected a $300,000 claim against a Costco in Santa Rosa, California. The store won because it was able to show it did hourly checks of the floor, a practice Chubb recommends.

If the store carries alcohol, it must worry about selling to minors or outside the legally allowed hours. If it has a dining area that offers alcohol, it may be subject to so-called dram-shop laws that make establishments liable for selling liquor to intoxicated individuals who then cause injury or death.

Finally (and happily), the advisory notes that some insurance policies cover crisis communication expenses: “Where issues such as tainted food can lead to adverse press coverage, companies should consider coverage that includes catastrophe management expenses to help protect their reputation.”

Photo Credit: Shutterstock