According to researcher estimates, 32 million Americans have food allergies. Reactions vary drastically, ranging from mild symptoms like hives and lip swelling to more severe, life-threatening effects. With almost 10% of the population experiencing these reactions, the US Food & Drug Administration (FDA) enforces strict regulations on food manufacturers.
These regulations require companies to list ingredients on the food they produce—also known as food allergy labels. While failure to properly label food allergens may result in health risks for consumers, there are also significant legal and financial risks for food manufacturers.
The Human Consequences of Errors in Food Allergy Labels
For consumers, the risks of inaccurate food allergy labels are well-documented. Every year, 200,000 people in the US require emergency medical care due to severe reactions.
Food allergy reactions can come from common ingredients used to manufacture food products, such as wheat and soy products, peanuts, tree nuts, dairy, eggs, fish, and shellfish.
As a result, people with food allergies spend significant time reviewing ingredient lists on all purchased products. It’s critical for people with allergies that food allergy labels are correct, which means companies must take all possible precautions to ensure adequate labeling procedures are in place.
The Financial and Legal Consequences of Errors in Food Allergy Labels
Mislabeling food products can result in lawsuits and fines. The legal costs and financial penalties can be so large that they severely damage a business, setting back revenue streams for years. Food manufacturers are responsible for ensuring food allergy labels list all allergens used in the preparation of their products and within their facilities. Additionally, manufacturers should have a clearly defined process for eliminating mistakes on all ingredient and warning labels.
The two most common food allergy lawsuits manufacturers face are negligence and failure to warn lawsuits. Products with high-risk allergy triggers, such as nuts, eggs, or wheat, must have a warning notice on the product label. Failure to disclose high-risk ingredients used in the manufacturing process can result in a negligence food allergy claim. Food companies are not required to change their processes or ingredients to adapt to specific food allergies, but they do have the responsibility to warn customers on their labeling about all allergens contained in their products.
What Can Food Manufacturers Do?
To combat this, food manufacturers must take all necessary steps to ensure their products are adequately labeled and safe for people with food allergies.
Companies should take a proactive approach to allergen labeling through:
- Protocols: Implementing strict manufacturing and labeling protocols.
- Testing: Conducting regular testing for allergens in products to ensure all ingredients are adequately labeled.
- Training: Ensuring employees are appropriately trained on handling and labeling allergens in products.
- Auditing: Utilizing third-party auditors to review products and ensure they comply with FDA regulations.
Companies should also ensure measures are in place to prevent cross-contamination. Allergen-containing products should be handled by dedicated equipment and facilities so that cleaning and sanitation can occur. Regular testing of products is also crucial, ensuring labels adequately mention all allergens present in a product (including those that may be present from cross-contamination).
Companies that fail to implement these measures face legal and financial risks. Ultimately, food manufacturers should employ all available tools to mitigate the adverse effects of improper food allergy labels or cross-contamination.
The importance of Insurance for Food Allergy Labels
Businesses can and should protect themselves in the event of human error or other missteps in allergen labeling. Insurance protection specific to food manufacturers is essential to the company’s risk management strategy.
Insurance provides a safeguard, covering companies when legal action threatens the business:
- Legal and financial liability protection: Lawsuits often follow allergen labeling errors that lead to illness or injury. Insurance helps cover costs for legal defense, settlement, regulatory fines, and more, helping to mitigate the financial burden.
- Industry standards compliance: Food companies also carry insurance to comply with retailer and distributor requirements. Product recalls and liability coverage may be required, and appropriate insurance is often necessary for partner relationships and contracts.
In short, insurance is an essential component of risk management for food manufacturers. Working with an insurance provider can ensure the organization has appropriate coverage, with policies regularly reviewed and updated to reflect regulatory changes.
McGowan Excess & Casualty (MEC) provides general liability and excess liability to help manage commercial risks. To learn more about our core commercial capabilities, including Umbrella & Excess Liability Pen Markets, Primary Liability Pen Markets, and Specialized Insurance Brokerage go to www.mcgowanexcess.com
Contact us today to discuss your food allergy labels concerns and how insurance can help make a difference for your business.