What Types of Insurance Should a Catering Company Get? Updated In 2023
Getting the right insurance for your catering business protects you from financial losses due to unforeseen events like lawsuits. General liability insurance can cover the costs associated with property damage, bodily injury, and legal defense. Here are the types of insurance you should invest in if you run a catering company:
General Liability Insurance
General liability insurance will protect your business against third-party claims, including:
- Property damage: It may cover you if a third party claims you or your employees damaged their belongings when offering your services.
- Advertising liability: It may cover legal costs if someone sues you for running a misleading advertisement.
- Bodily harm: It can cover your expenses if a third party sustains injuries from your services. The policy can cover legal and medical expenses if a court holds you liable for the third party’s injuries.
Consult your chosen insurance provider to learn what their general liability policy covers. Choose an insurance policy that covers your business’s potential risks to enhance peace of mind and safeguard your investment.
Commercial Property Insurance
Commercial property insurance covers your catering company’s physical assets, like furniture, equipment, and the building. The coverage can step in if:
- An accident like a fire occurs as long as it’s not caused by employee error.
- A natural disaster like a flood or hurricane damages your property.
- Your property is stolen or vandalized.
A comprehensive policy can also cover inventory spoilage if it results from equipment breakdown. It can also reimburse you for operating expenses when your business closes for some time because of repairs.
Product Liability Insurance
Product liability insurance provides coverage for injuries or damages that occur as a result of a product or service that you provide. It can protect you if a guest gets sick from food poisoning after consuming food from your catering company. The policy can also protect you if you sell defective packaged products like already spoilt sauces. It can cover your legal fees, guests’ medical expenses, and lost wages.
Workers’ Compensation Insurance
Workers’ compensation insurance provides financial support for employees who are injured or become ill due to work-related causes like accidents, repetitive motion injuries, and occupational illnesses. If an injury occurs, this insurance can cover medical expenses, lost wages, and other costs associated with the injury. With workers’ comp, you reduce the risk of financial burdens related to workplace injuries while creating a supportive and safe work environment.
Business Interruption Insurance
Business interruption insurance covers losses your company may incur when an insured event like a natural disaster disrupts business operations. It can cover lost revenue and expenses like employee wages for the period you can’t operate. This coverage can help you stay afloat during unexpected disruptions that’d otherwise cause significant financial losses.
Commercial Auto Insurance
Commercial auto insurance covers catering company vehicles, including delivery vans, food trucks, and personal vehicles used for business purposes. It can offer financial protection in case your business vehicles are involved in an accident or suffer damage from a natural disaster.
This insurance can also provide liability coverage in case your commercial vehicle causes damage to someone else’s property or injures a third party. It can help cover the cost of legal fees and compensation.
Liquor Liability Insurance
Liquor liability insurance is key for a catering company that serves alcoholic beverages. It protects your business from claims arising from property damage, bodily injuries, and accidents caused by intoxicated guests.
Your chosen insurer may ask for your sales records before recommending an ideal liquor liability policy. The cost of a liquor liability policy is determined by the contribution alcoholic beverages make to your total sales. The higher your alcohol sales, the more your policy will cost. As your alcohol sales increase, so does the risk your business carries regarding alcohol-related accidents and injuries.
Business Owner’s Policy (BOP) Insurance
This is a bundled coverage often consisting of general liability, business interruption, and commercial property insurance. The coverage may be more affordable when compared to buying each policy individually. This makes it ideal for you if you want to protect your business while still keeping costs down.
Protect Your Catering Company
Catering businesses face equipment failure, property damage, and vandalism risks. Without insurance, you may be forced to use your income to cover the costs of these risks. Protect your business by investing in policies like general liability insurance, liquor liability insurance, and commercial property insurance. They’ll give you peace of mind and allow you to focus solely on providing quality catering services.