Insurance for Catering Businesses

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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.

What type of insurance does this industry need?

Policy What is it? Why get it Popularity in your industry Want free quotes?
General Liability
This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

What is it: This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy.

Why get it: General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

Commercial Property
This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

What is it: This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage.

Why get it: If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

Commercial Auto
Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage. Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

What is it: Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage.

Why get it: Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

Workers Compensation
Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

What is it: Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work.

Why get it: Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

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