Restaurants and caterers will probably respond to pending legislation on food safety by developing a healthy appetite for insurance, according to a Shanghai official.

The Food Safety Law is currently being amended.

Every diner at a restaurant that has purchased the insurance, who falls ill through eating food at that establishment, is eligible for a payout of up to hundreds of thousands of yuan, said Gu Zhenhua, vice-director of the Shanghai Food and Drug Administration.

The restaurant, as the primary responsible party, will be investigated for administrative or criminal responsibility.

"Although the current law doesn't require catering services to purchase insurance for large-scale events, we're trying to popularize it, and those organizing wedding feasts are a priority," Gu said.

Shanghai England Wedding, a hotel that specializes in wedding parties, paid more than 200,000 yuan ($32,600) to Anxin Agricultural Insurance to purchase a policy earlier this month.

This was the first case of its kind in the country.

"Every guest at a wedding feast that involves food safety incidents will get up to 600,000 yuan for compensation, and the aggregate amount of compensation for the whole year is capped at 20 million yuan," said Wang Fang, a spokeswoman from the insurance company.

"When consumers can present a medical report confirming and proving food poisoning, we'll start settlement of claims after the restaurant informs us," she said.

England Wedding said insurance costs will not be passed on to consumers.

"The insurance will work as free additional value to the wedding banquet package to safeguard consumer rights," said Zhang Wenting, an assistant at the general manager's office at the hotel.

"The package price paid by the newlyweds remains the same as in the past."

Nearly 300 complaints about the safety and quality of catering services were received last year, and those involving wedding banquets accounted for a large proportion.

In Shanghai's Changning district, more than 30 businesses are dedicated to wedding banquets and more than 1 million people attend them every year, according to the district food and drug administration.

"Without insurance, businesses tend to shuffle off or evade responsibility and the interests of consumers are ignored. So liability insurance is of great importance," Gu said.

According to the Shanghai Insurance Association, if a catering business pays 300 yuan per year for insurance, it can claim compensation of 50,000 yuan annually.

Restaurants, though, do not seem to have much of a stomach for it.

"Some restaurant managers think the beneficiaries of the insurance are just the consumers. Restaurants, as purchasers, don't get the benefits, they think," said Chen Hui, who works with Chang An Property and Liability Insurance.

There have been a number of food scandals in recent years.

In 2008, baby formula was tainted with melamine, an industrial compound that can cause kidney ailments.

More than 1.1 billion yuan was paid to the families of the six infants who died and the 300,000 others who became ill.

Although this type of insurance has been promoted in China for seven years, only around 10 percent of food enterprises, mainly the larger concerns, bought it, according to Li Xiaolin, a professor at the School of Insurance under the Central University of Finance and Economics.