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Why Caterers Need Business Insurance

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As a catering company, you prepare and serve food in a variety of locations and venues. But whether you’re catering at a wedding or a Bar Mitzvah, you still face certain risks. What if a wedding party gets food poisoning and blames your business? What if a child burns their hand on your chafing dishes? What if one of your employees accidentally cuts themselves? In all of these scenarios, the proper liability insurance coverage can protect your business. Not only that, but many venues require you to provide a certificate of insurance to serve food or alcohol. 

So who needs a catering insurance policy?

  • A full-service caterer
  • Independent caterers
  • Wedding and event caterers
  • Concession stands/caterers
  • Corporate catering businesses
  • School cafeteria caterers

As a small business owner, even the smallest incident can cost you money that could be going into your business. Investing in the right insurance policy—or policies—protects your business, your employees, and your customers.

General Liability Insurance for Caterers

Catering businesses should get general liability insurance to cover the basic risks they face in day-to-day business. What does this policy cover? 

  • Bodily Injury: Remember that child that burned their hand on your chafing dish? The parents claim your service was negligent and are holding you liable for their child’s injury and medical costs. Luckily, liability insurance will pay the medical expenses. 
  • Property Damage: One of your chafing dishes crashes off the table and damages the floor at an event. The venue holds you responsible to repair the property damage. Your general liability coverage will cover the cost of repair. 
  • Personal Injury: A competitor claims that you slandered their business and are suing you for loss of business. A general liability insurance policy provides you a legal defense, pays for legal expenses, and covers any settlements. 

Are Liquor Sales Included in General Liability Insurance Coverage?

General liability insurance does not cover you if your catering company serves alcohol. You’ll need to add an endorsement for liquor liability or purchase liquor liability insurance separately. Why? If one of your staff serves someone too much alcohol at a wedding and that same person hurts someone else or damages someone’s property—you’re the one held liable. Liquor liability insurance helps cover medical costs, property damage repair/replacement, and lawsuits and settlements. 

Consider a Business Owners’ Policy

If your catering business has a prep kitchen—or you work from home—you need to protect your space with commercial property insurance. A Business Owners’ Policy (BOP) bundles business property insurance, general liability insurance, and business interruption insurance. This type of insurance package is usually only available to small businesses. The plus side is that a BOP is often more affordable than purchasing the necessary coverages separately. 

What Other Business Insurance Does a Caterer Need?

There are a few other insurance policies a catering company may want to consider: 

  • Commercial Auto Insurance: Most caterers use a vehicle to transport food and equipment. Even if it's a personal vehicle, you need commercial auto to protect you in case of an accident. Personal auto insurance does NOT cover incidents that occurred while doing business.
  • Inland Marine Insurance: Commercial auto doesn’t typically cover equipment that’s not permanently attached to your vehicle. To cover that, you’ll need inland marine insurance. 
  • Food Truck Insurance: Is your catering business a food truck? You’ll need specialized coverage built just for you. 
  • Workers’ Compensation Insurance: Workers’ compensation insurance is required in almost every state for businesses that hire employees/staff. If they are injured or become ill while at work, this policy covers their medical expenses and a portion of their lost wages. 
  • Equipment Breakdown Coverage: If any of your expensive equipment (ovens, commercial fridges, etc.) suffers a mechanical breakdown or is damaged in an electrical surge, this policy helps to repair or replace the damaged equipment. 
  • Product Liability Insurance: If you sell a food product that is linked to contamination or illnesses, you can be held liable for medical costs and damages. Product liability steps in to protect your business.
  • Food Contamination Insurance/Spoilage Coverage: This can often be added as an endorsement. Make sure you get this coverage. If a customer becomes ill due to food poisoning—you don’t want to lose your business.

This isn't an exhaustive list—other policies may apply to your business depending on your unique needs.

How Much is Catering Insurance?

The cost of catering business insurance varies depending on numerous factors:

  • The annual revenue of the business
  • The number of employees you hire
  • The catering services you offer
  • The location(s) you operate in
  • Whether or not you serve alcohol

Other variables that may impact how much you may pay, which is why it’s best to speak with a knowledgeable insurance agent. FLIP offers general liability starting at $299 a year (if your gross sales are under $200,000 annually). Next Insurance offers general liability starting at $25 per month. Coverwallet offers coverage for $39 per month for GL or $239 for GL + commercial auto + workers' compensation. The median cost of a BOP for caterers is $70 per month. Some insurance companies even offer event-based policies. As you can see, the costs vary from one insurance company to another. It's why we recommend working with an agent to help you get multiple quotes for your business.

Get a Free Catering Insurance Quote

A catering business isn't immune to risk. That's why it's so important you find the right insurance coverage. To get a quote for catering business insurance, complete the form at the top of the page. If you prefer to speak with an agent to get quotes, give us a call at 877-907-5267. One of our agents will gladly help you find the best coverage for your catering business.

Related Articles: Food Truck Insurance, Event Insurance, Concession Stand Insurance

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