Catering Insurance
Your business deserves the right protection against common threats like lawsuits, theft, employee dishonesty, and more.
Written by
Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
Reviewed by
Cara Carlone is a licensed P&C agent with 20 years of experience. She has her P&C license in RI and TX and holds CPCU, API, and AINS designations.
The catering business is a fast-paced industry perfectly suited for anyone with a flair for cooking and an entrepreneurial spirit. However, running a catering business comes with various common and unexpected risks faced by many types of companies. You could experience a lawsuit, theft, loss of inventory, or other issues that lead to financial losses.
Luckily, independent insurance agents are here to help. They’ll walk through your catering business's needs with you, identifying risks and exposures to help put together the right set of business insurance policies to cover you properly. But first, here's an overview of the coverage you need for your catering business.
What Is Catering Insurance?
Catering insurance is an agreement between the business owner and the insurance company in which the insurer agrees to cover financial losses that befall the business. However, only listed perils in the catering insurance policy will be covered by the insurance company. Catering insurance is crucial to help your business prevent a potentially devastating financial loss stemming from risks like property damage or work vehicle accidents.
Essentially a specialized form of business insurance, catering insurance packages start with common coverages needed by many types of businesses, and are topped off with certain protections designed to protect against risks unique to your niche. Working with an independent insurance agent is the best way to get set up with all the coverage you need.
Who Sells Catering Insurance?
Catering insurance is available from many different insurance companies, and the best way to find the right carrier for you is through working with an independent insurance agent. These agents have helped all types of insurance customers, including those in search of catering insurance. They know which insurance companies to recommend to meet your needs, and can provide informed suggestions based on company reliability, rates, and more.
While many insurance companies could create a catering insurance policy for you, finding coverage could also depend on the area you live in. Here are a few of the top picks for catering business coverage.
| Top Catering Insurance Companies | Overall Carrier Star Rating |
| The Hartford |
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| Nationwide |
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| Progressive |
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| Next Insurance |
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| Thimble |
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| Huckleberry |
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| Bizinsure |
|
Why Do I Need Catering Insurance?
Without the right coverage, your catering business could get hit hard by an unexpected disaster, and perhaps not be able to financially recover. Businesses often face bankruptcy because they lack the right insurance. You never know when a storm or act of vandalism could result in property damage too extreme to cover out of your own pocket. Catering insurance also provides crucial legal protection in case your business gets sued, as well as coverage for your employees while on the job.
What Does Catering Insurance Cover?
Small catering companies are often run out of the home, while larger companies may work out of large kitchens, banquet halls, or restaurants. The size and location of your privately owned catering company will affect the risks you face, as will the type of catering you do. Common coverages included in catering insurance are:
- General liability insurance: Covers the cost of third-party laws for claims of personal property damage or bodily injury caused by your catering business. Also often covers food poisoning claims.
- Business property insurance: If your catering business is based out of your home, you can add an endorsement for your business equipment and materials to your homeowners insurance policy. If your business is located outside your home, you'll need commercial property insurance to protect against loss or damage to owned or rented business property caused by fire, weather, vandalism, and theft.
- Business contents insurance: Otherwise known as business personal property coverage, it protects your company's equipment like computers, inventory, and office supplies from numerous perils like fire and more.
- Business income insurance: Covers temporary business interruptions if your operations are slowed or suspended due to a covered peril. Coverage can provide a continuation of income and continue to pay ongoing expenses like rent and employee salaries during the closure.
- Food spoilage insurance: If an extended power outage or mechanical failure results in the loss of refrigerated or frozen food, this coverage will provide compensation so you can restock your inventory without taking a big financial hit.
- Equipment breakdown insurance: This coverage is best suited to large catering companies that use industrial-sized kitchen equipment. If a power surge or mechanical failure leaves you unable to do your work, this insurance can assist you with appliance repair costs and any resulting loss of income.
- Cyber liability insurance: Covers incidents of data breaches and other cyber-attacks that may expose, sell, or distribute private or sensitive data.
An independent insurance agent can help you review your business's coverage needs and find the right catering insurance policy to cover them all.
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Additional Catering Insurance Coverages to Consider
While some insurance policies are mandatory, others are optional but very important for protecting your business's finances. Some additional coverage you may need, depending on your specific catering business, includes:
- Product liability insurance: Covers third-party claims of harm caused by the products made or sold by your business.
- Liquor liability insurance: If you serve alcohol at weddings and other functions, this can cover your legal defense and pay for damages if you're accused of overserving liquor, leading to injury or property damage.
- Workers' compensation insurance: Covers incidents of employee injuries and illnesses that result from the job in some way. Coverage is often required in most states by law.
- Disability insurance: This coverage is required by law if your catering business is located in California, Hawaii, New Jersey, New York, Rhode Island, or Puerto Rico. Otherwise, it’s optional, but coverage can help replace a portion of employee's salaries if they develop a disability and are unable to work for a period of time.
- Commercial auto insurance: Your catering business probably uses a delivery van or has a fleet of company-owned vehicles that need protection against various threats, including accidents, lawsuits, theft, and more.
- Hired or non-owner car insurance: If your employees use their own vehicles on the job, you can still be held responsible for covering any liability expenses they incur while transporting goods or materials to and from job sites. This insurance will provide that coverage.
- Crime insurance: Covers incidents of employee dishonesty and theft or any criminal activity that hurts your business.
An independent insurance agent will make sure that your catering business insurance package includes all the protections your unique business needs.
Common Risks and Exposures for Caterers
Caterers face hazards of all kinds on a daily basis, regardless of the size or location of the company. Some common risks and exposures caterers need to anticipate and plan for from the beginning include:
- Premises risks: Like many other businesses, catering businesses need to keep the safety of their premises in mind at all times. Customer slips and falls are some of the most common business insurance claims across the board.
- Food/product risks: Working in the food service industry, caterers must take extra precautions when delivering their products to the public. From burning hazards to food-borne illnesses, caterers can be sued for numerous food-related risks.
- Employee risks: Employees may steal from the company, get injured on the job, or even harass a customer or fellow team member. All of these concerns must be addressed before hiring your team.
- Property risks: Your business property is always at risk of natural disasters like hurricanes and lightning strikes, but it's also prone to destruction by falling objects, vandalism, and more.
- Equipment breakdown risks: Not only could your equipment itself be expensive to repair or replace in the event of a breakdown, but it could also halt your business's operations, leading to a loss of income.
- Business vehicle risks: Work vehicle accidents are another of the top claims for businesses of all kinds. It's crucial to make sure your company's vehicles are covered against a whole host of risks, from liability to theft.
Your independent insurance agent can help you review these risks and exposures and create an insurance plan that addresses each of them.
How Much Does Catering Insurance Cost?
The cost of your policy can depend on numerous factors, like your business's exact location, size, annual profits, number of employees, coverages needed, and more. The average cost of catering insurance is about $29.52 per month or $299 per year. An independent insurance agent can help you find exact catering business insurance quotes in your area.
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The Benefits of an Independent Insurance Agent
When it comes to finding the right business insurance for your catering company, no one's better equipped to help than a local independent insurance agent. These agents have access to multiple insurance companies, so they're free to shop and compare quotes and policy options for you.
Ultimately, they'll get you matched to a policy that offers the best blend of coverage and cost. And down the road, your agent will still be there to help file business insurance claims for you or update your coverage as necessary.
FAQs About Catering Insurance
You'll need different types of coverage depending on the style of your catering business. If your catering business has a separate office space, you'll need business property coverage for each location.
The biggest difference in pricing is the overall size of your catering business or its annual revenue. If you have an extremely successful home-run catering business, you might pay as much or even more for coverage than for a catering business run out of a strip mall that doesn't turn over much profit.
It's the same thing as business personal property insurance. This coverage protects certain business equipment and inventory from numerous disasters. For example, computers and office supplies are covered from perils like fires and theft.
Yes, any type of business that serves or sells food to the public needs food contamination, or "spoilage" coverage. Food can cause all kinds of illnesses and injuries to the public, whether it's from having been spoiled, improperly prepared, or just served too hot. To protect your catering business from a legal standpoint, this coverage is critical.
Catering businesses need insurance to protect themselves from bankruptcy, among other huge concerns. Without proper coverage, a lawsuit or property damage event could be too expensive to cover out of your own pocket, and you could lose your business. It's always best to be prepared with the right insurance before ever opening your business's doors to the public.
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