Catering Insurance

When launching a new catering business, you will need insurance to protect your business. In this post, you will learn about the different types of insurance for catering businesses, and we will point you in the direction of some top carriers to consider.

Before we dive in, let’s go over the basics and discuss what catering insurance is, who needs it, and why it is important.

What is Catering Insurance?

Catering insurance is simply insurance that is tailored to the needs of businesses involved with catering.

It falls within the umbrella of food liability insurance. Or, to put it another way, it is what we call food liability insurance when we are discussing it within the context of running a catering business.

There are multiple types of catering insurance policies. We will go over them later on in this post.

Who Needs Specific Catering Business Insurance Coverage?

Anyone who operates a catering business of any type or size requires catering insurance. That includes, but is not limited to the following:

• Corporate caterers
• Event caterers
• Wedding caterers
• Concession caterers
• Banquet halls

Why is Caterer Insurance Coverage so Important?

When you decide to become a caterer, you will need to apply for a license in your state. That being said, as far as we can tell, most states do not legally mandate that you carry catering insurance policies. The exception is workers’ compensation, which you must purchase if you have even a single employee.

The main reason catering insurance is important is because without it, you have no protection for your business.

There are other benefits to getting insurance for your catering company as well. You probably will find that more work opportunities are available to you, as some clients and venues may only be open to working with you if you are covered.

Consider a few examples of situations where catering insurance would be a big help:

• Imagine a tablecloth you set up is tugged down to the floor in one corner by someone’s dog messing with it, and then somebody trips over it. They fall and are injured, and decide to sue you. Thankfully, your insurance covers it.

• You get into an accident when you are driving your catering vehicle to a venue. The commercial auto policy you took out covers the damages.

• A fire damages some of your catering equipment while you are working at a venue, but your insurance helps you cover replacement costs as well as lost work time.

Those are just a few examples!

Types of Food Catering Business Insurance

There are a number of types of insurance policies that may be useful for you as the owner of a catering business. Here are the main ones:

• General liability insurance: If there is damage to another person or their property when you are operating your catering business, your general liability insurance will help cover it. If you are going to purchase only one type of insurance for your catering company, it should be general liability insurance.

• Errors and omissions insurance: This is the type of insurance that protects you if a third party claims that they suffered damages due to perceived negligence by you or your employees.

• Commercial auto insurance: You can protect the vehicle(s) you use for your catering work using a commercial auto insurance policy.

• Commercial property insurance: To protect the equipment you use for catering as well as the products themselves, you can take out a policy for commercial property. Note that this may also pay out if your food spoils due to some unforeseen circumstance.

• Business interruption insurance: If you find yourself unable to work for a period of time because of spoiled inventory or damaged equipment, business interruption insurance will help cover the gap in your income.

• Business owner’s policy (BOP): This type of policy usually combines general liability insurance and commercial property insurance, but sometimes may also include business interruption insurance.

• Workers’ compensation: If your workers get sick or injured on the job, workers’ compensation will help pay their medical costs and even reimburse their lost wages. This type of insurance is a legal requirement if you have employees no matter what state(s) you operate in.

• Liquor liability and special events insurance: This is a special type of insurance you might need if you serve alcohol when catering.

This is not a complete list of all types of catering business insurance. You may find some other types of policies that are helpful for you as well.

What Does Catering Insurance Cost?

Here are some standard costs for catering insurance policies:

• Workers’ comp: $90 per month
• General liability: $40 per month
• Commercial auto: $80 per month
• BOP: $70 per month

These are median costs, so the quotes you receive may be higher or lower. Here are some of the factors that can drive costs up or down:

• Your specific type of catering business. Some types of catering businesses may entail more risk than others. Those that are riskier will cost more to insure.

• The size and scope of your catering company. A catering business that is large and complex will be more expensive to insure than one that is relatively small and simple.

• The areas you serve. A catering company that just serves one small, safe rural town does not take on a lot of risk compared to one that serves multiple major metropolitan areas. So, your area of service will impact your insurance pricing.

• The value of your vehicles and equipment. If your vehicles and equipment would be expensive to repair or replace, the insurance company will charge you more to cover them.

• Your payroll. Need to get workers’ comp for your employees? Because workers’ comp offsets lost wages, a higher payroll will mean more expensive workers’ comp.

• Your deductibles. One trick to lower the cost of catering insurance is to increase your deductibles. You will have to pay more out of pocket before your insurance starts covering damages with a higher deductible, but your monthly costs for that policy will decrease.

• Your maximum coverage amounts. Another method for bringing down monthly catering insurance costs is to reduce the amounts of the coverage.

• The coverages you choose. If you have a low budget starting out, you might just purchase catering liability insurance coverage (and possibly workers’ comp) for your catering company to save money. As your business grows, you can start buying more types of coverage. This will add to your insurance costs, but give you much-needed additional protection.

• Bundling and discounts. Some insurance companies—including those we recommend in the next section—offer you discounts for bundling or other things. You can save quite a bit of money with the right discounts, which is one of the reasons you should shop around.

• Your record. If you can go long stretches without making claims, you prove that you are able to perform your work safely with minimal risk. So, the more experienced you are as a caterer and the cleaner your claims record is, the lower the cost will be to insure your business.

• Underwriting. Because there are differences in underwriting guidelines for every insurance carrier, you may see additional variations in pricing as you request quotes.
  

Best Catering Insurance Companies

Now that you know the different types of insurance policies for catering companies as well as what you can do to keep your costs down, you are ready to check out some of the top carriers.

1. The Hartford

https://www.thehartford.com/business-insurance/catering-insurance

The Hartford has been insuring businesses for over 211 years, making them a top choice for those in search of reliable service, excellent coverage, and a fast and simple claims process.

Some of the types of policies they offer catering companies include general liability insurance, commercial property insurance, commercial auto insurance and business income insurance. They also provide workers’ comp and employment practices liability insurance.

2. Progressive

Progressive may be best known for their home and auto policies, but they offer some excellent catering insurance policies as well. Among their policies are general liability insurance, commercial auto insurance, business owners’ policies and workers’ comp.

Another thing Progressive is famous for are its discounts. Ask about bundling and other ways you can save.

3. NEXT

https://www.nextinsurance.com/business/catering-insurance/

NEXT is an insurance carrier that specifically serves businesses; in fact, more than 420,000 business owners in food service and other industries trust them for their insurance needs.

Types of coverages offered by NEXT include general liability insurance, workers’ comp, commercial property insurance and commercial auto insurance. Plus, like Progressive, NEXT is generous with discounts. It may be possible for you to save up to 25%.

Protect Your Catering Business Now

By investing in catering insurance, you can protect yourself from any number of unforeseen events that would otherwise be costly to your business. To compare quotes now, click on any of the links in this post.