As a caterer, you create custom menus to meet a client's needs. When you're buying catering insurance, you can mix and match coverage types to meet business needs. One of the most common ways to do this is with a business owners policy (BOP). BOP insurance typically includes general liability insurance, business interruption insurance and business property insurance. You can buy other coverage such as commercial auto insurance to cover all the bases.
Basic catering insurance coverage types
Business liability insurance – This covers injuries and property-damage lawsuits against your catering business. For example, if you set up in a banquet hall or backyard, you could be held liable for damage at the venue.
Commercial property insurance – If you run a catering business in a space such as a commercial kitchen, this protects your building and contents (such as kitchen equipment) from problems like fires, vandalism and theft. If you run a catering business out of your home, you may be able to purchase an in-home business endorsement through your home insurance policy. Keep in mind, this option may have lower coverage limits than a business property insurance policy.
Business interruption insurance – If a problem covered by the policy such as a fire caused you to temporarily close or relocate, this helps cover expenses. It can also help replace lost business income.
Additional catering insurance coverage types
Commercial auto insurance
You'll need catering vehicle insurance if you're using a vehicle for work-related tasks, such as driving to catering events or picking up kitchen supplies. A personal auto policy typically won't cover accidents while working.
Equipment breakdown insurance
This helps repair or replace broken equipment, such as ovens, stoves and refrigerators. It can usually also cover spoiled food and replace lost income if business was interrupted.
Food contamination coverage
This covers lost income if a government authority, such as the board of health, orders you to close. It may also cover other losses, such as replacing spoiled food, cleaning contaminated equipment and advertising in order to get customers back.
Hired and non-owned auto liability coverage
This covers injuries and property damages for auto accidents in vehicles you don't own. For example, a catering business might rely on a rented vehicle or an employee-owned vehicle to transport food to an event.
Liquor liability insurance
A business general liability insurance typically does not include liquor liability. If your catering business sells or furnishes alcohol, you'll most likely need liquor liability insurance.
Workers compensation
This covers medical bills and disability insurance if employees get hurt or become ill while doing work. Many states require it.