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As a caterer, you are constantly traveling, preparing, and providing food for your clients and their events. That means your business is responsible for not only providing an excellent quality of food but also preparing it, packaging it, storing it, delivering it, serving it, and more.
In any of these processes, things can go wrong, which can lead to lost business, food poisoning, and various other accidents, which can be devastating for your catering company.
Having an insurance policy in place for your catering business will ensure protection and coverage from any unforeseen events, which end up costing your business money.
Why Do Caterers Need Insurance?
Any business that makes and sells food to the general public needs insurance or a certain level of cover by law. Otherwise, they will not be allowed to legally operate and can get into all sorts of legal trouble.
Besides that, insurance is recommended as it provides financial cover in the event of an accident, which leads to a lawsuit or a claim.
For instance, if the catering service has served food that was improperly stored and one of the customers got food poisoning - the catering company can get sued and asked to pay for the medical bills as well as compensate the victim.
In other cases - the staff within the business can get injured from slips, trips, and falls, which can put them out of work. And when your business has insurance - that will cover their lost wages and medical bills.
What Types of Insurance Do Caterers Need?
Catering companies can benefit from a wide variety of insurance policies. These will depend on the size of your business, the clients you serve, the food you deal with, and various other factors.
Below, you can learn more about the most recommended insurance policies for caterers in the United States.
How Much Does Caterer Insurance Cost?
The average cost of insurance for caterers will depend on the size of your business, the level of cover you take out, and various other factors.
On average, caterers take out BOP or business owner’s insurance policy for just $80 per month or $960 per year.
If your catering business has employees, you will also need to take out worker’s compensation insurance, which will cost you an average of $90 per month or $1,080 annually. This type of coverage will cover your employee's medical expenses, hospital fees, and other costs in case they get sick or injured at their place of work.
General liability insurance for caterers, on the other hand, costs around $50 per month or $600 per year. This policy will protect your business from third-party bodily injuries or property damage.
If your catering business also delivers the food that it makes - you’ll need to take out commercial auto insurance. This costs an average of $80 per month or $960 per year and provides cover for your vehicle in case it gets in a road accident or is damaged as a result of theft or vandalism.
Typical Caterers Insurance Claims
The most popular claims made by catering companies revolve around bodily injuries from slips, trips, falls, and food poisoning. Since the food needs to be delivered to the place where the event takes place - in rare cases - the caterer makes claims in case they get into a road accident.
Whatever the case may be - having insurance is always a great idea as it financially shields your business in the event of an accident - be it something as simple as customers claiming a refund or in more serious cases - paying for hospital bills of customers who have gotten food poisoning from the food that your company has prepared.