Insurance for Catering Businesses

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What Insurance Do Catering Businesses Need?

Business Owners Policy (BOP)

BOP Insurance is a package that combines the coverage of multiple products such as Commercial Property, General Liability and Business Interruption into one. This means that BOP will cover property damage, liability claims related to injuries and income losses if your restaurant is forced to close temporarily among other things.

Workers Compensation

Workers Compensation covers your employees' medical costs and lost wages while recovering from a work-related injury or illness. The employee gives up the right to sue your company in return for receiving cash and benefits from Workers Compensation. In some states it’s mandatory for businesses!

Cyber Liability

This insurance covers a company in the event of a data breach in which sensitive customer information is leaked. These policies cover expenses, such as notification costs, credit monitoring, fines and penalties, defense costs, and loss resulting from identify theft.

Commercial Auto

Commercial Auto Insurance covers your cars, trucks, and vans used in your business. It covers the costs from vehicle damage in collisions, theft, vandalism and weather damage. It also covers medical expenses for to injured parties.

Liquor Liability

Liquor Liability Insurance protects a small business that manufactures, sells or serves alcohol. Small business owners are protected from claims that occur when a customer drinks too much and injures himself or someone else.

Equipment Breakdown

Equipment Breakdown Insurance protects your equipment from breakdowns caused by motor burnout, power surges, boiler malfunction, and operating error. It covers you for the costs to replace or repair your damaged equipment, and other related expenses.

Product Liability

Product Liability insurance covers your business if you need to recall one of your products. It covers your costs for retrieving the defective product from the manufacturer or seller to prevent any further bodily injury or property damage.

Frequently Asked Questions

How much does it cost to insure a catering business?

Of course, insurance costs are always on the minds of business owners. While it might feel like just another expense, it really is an investment in your business. That being said, it is really hard to be general when it comes to the cost of insurance because the cost varies per policy. A General Liability Insurance for a catering company, for example, can be as low as $30 a month. There are many factors to take into consideration when an insurance policy premium is determined by the insurance company. Your experience in the industry is taken into account because if you have been in the industry longer, you better understand the potential risks involved. Additionally, if there is a claims history that will cost you more as well. Some other factors that will be considered are the number of employees you have, annual receipts and payroll, coverage limits, deductible amounts, what kind of food you are dealing with, how it is being cooked, and if you have proper risk-avoiding procedures in place.

What is contents coverage?

Contents insurance coverage as a part of a Business Owner's Policy will pay the cost to repair or replace the essential equipment you use to operate your business. In case of fire or other covered loss this insurance can keep you in business when you would otherwise not be able to replace your damaged equipment.

Do I need food contamination coverage as a catering business?

Many food-related business owners wonder if they need food contamination insurance. Regardless of what kind of food you are serving with your catering business, having food contamination insurance is critical. Your food inventory and equipment are the lifeblood of your business. So, mishandled food can lead to food-borne diseases and customer claims - both of which could ruin your business in an instant. With this type of insurance, your catering business is covered in the event of a food-related loss. Food Contamination insurance was created to help a business stay afloat if there is a contamination issue. Even the most trained employees can make mistakes, and something as simple as leaving raw meat out for a little too long, or accidentally using the same cutting board for meat as vegetables can cause a cross-contamination issue. If this happens, not only can this create a product nightmare because you will have to throw all of your food away and purchase new, but the public relations issue could shut down your business. Having the right insurance in place can help you stay afloat and pay for the replacement products so you can keep doing what you love, serving amazing food to your customers.

What is catering insurance?

Catering insurance is intended to cover the liabilities involved in your catering business. Its primary focus is to protect your business against risks that come with serving food to large crowds, damaged equipment, customer/employee injuries, and property damage. While all of these things are very critical to cover in the event of a loss, one often forgot about insurance policy that is just as essential is Liquor Liability.

As a caterer, it is likely that you will choose to serve liquor as well to help bring in some extra cash. After all, most celebrations these days involve alcohol at some point so it would be a really big missed opportunity if you chose not to. However, serving alcohol opens your business up to a whole other list of risks. Because you would be the one serving, if a guest is served too much and something bad happens, you may be held liable. This can be anything from a guest becoming irritated and starting a fight and causing bodily injury, or slipping and falling and hurting themselves or damaging the venue, to them getting behind the wheel and hurting someone, or god forbid killing someone.

Why does a Catering Business need insurance?

A Catering business is 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.

Not only do you have to worry about protecting your business from claims of bodily injury and property damage, but are you prepared if your employees get hurt on the job? Workers Compensation insurance is a must-have for catering businesses because the chance of slips and falls is so much higher in the foodservice business. Also, if you do any kind of delivery and your employees are using their own vehicles to do so, make sure you have Hired and Non-owned auto liability. If an employee is on the clock and causes an accident, your business could be held liable.

What risks could a Catering Business 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 preparation 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 electricity 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. For example: if an intoxicated guest leaves an event where you served them alcohol and causes an accident, your catering business can be held liable because they drank too much and you should have declined to serve them.

What are the insurance covers that restaurant businesses like me usually get?

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