Why Catering Businesses Need Insurance
Catering businesses are in high demand for weddings, corporate parties, anniversary parties, and a variety of other celebrations. You are expected to create and deliver meals, appetizers, and desserts that leave a lasting impression on guests. To build a successful catering business, you need to have a knack for more than just cooking or baking. You need a good work ethic, relationship building skills, and insurance for your catering services. Caterer insurance protects you during the worst moments when lawsuits or claims threaten your financial strength and reputation.
These establishments prepare food for an event in a different location. Afterward, they transport it to the site or venue. Catering services are commonly found at graduation and wedding parties.
Risks Catering Businesses Could Face
Working in the food service industry means you face unique risks in addition to typical business risks.
- Food Sickness: The number of food allergies you have to adjust to is on the rise. If you fail to alter recipes or ingredients are cross contaminated accidentally, it can cause a serious allergic reaction. Food requires particular care. If spoiled ingredients are used, or the final product doesn’t maintain a required temperature, it can quickly spoil and cause food poisoning. In either scenario, you are responsible for any medical expenses.
- Spoiled Food: You rely on refrigeration systems to store your groceries and supplies. What happens if you return to your kitchen one morning to find the electric failed in the middle of the night. How will you pay to replace lost ingredients or final products?
- Failure to Deliver: Customers rely on you to deliver at a specified time. Sometimes things are out of your control and delay that. Whether it’s an accident, detour, or that someone dropped an entire tray of appetizers on the floor, customers can allege you didn’t fulfill your contract.
- Alcohol Dangers: Serving alcohol has a long list of risks. If an intoxicated guest leaves an event where you served them alcohol and cause an accident. Your catering business can be held liable because they drank too much and you should have declined to serve them.
Types of Coverage Catering Businesses Need
Caterers need to have general liability, commercial property, and product liability insurance in place from the beginning. If you service alcohol, you need liquor liability, and if you deliver, you need business auto insurance. Depending on the number of employees you staff and the state you reside in, you also need worker’s compensation.
- Product Liability: Pays expenses that occur when your product causes food poisoning or illness to guests at the event.
- Equipment Breakdown: Covers major equipment that you rely on to deliver services like refrigerators. It pays the costs to replace or fix the equipment in addition to temporary rentals and lost ingredients from the breakdown.
- Business Auto: Whether you have a food trailer, RV, or a delivery van, you need business auto insurance. It pays costs to repair your vehicle and any damages you caused in an accident including injury and property damage.
- Liquor Liability: Covers any claims resulting from serving alcohol at an event.
How Much Does Catering Businesses Insurance Cost?
How much you pay for catering business insurance depends on which company you choose. Every company will need to review your business to calculate a premium. The majority want to know your experience, qualifications, past claims history, and safety procedures you follow. If you are ready for a quote today, you can fill out our online application to find how much insurance for your catering business will cost.