Caterers need general liability, product liability, commercial auto, workers compensation, and liquor liability (if alcohol is served) to meet venue and client requirements.
Clients and venues expect nothing less than for your business to be fully insured before working with you. But what does that look like, exactly? And why do you need insurance at all?
This guide has everything you need to know about essential catering insurance coverages, typical costs, and client expectations. Plus, download our free checklist to make sure you never miss out on another gig because you didn’t have the right insurance coverage.
What Insurance Does a Caterer Need?
You need several types of coverage to shield your business against financial losses from the most common risks caterers face. As you read through each type of insurance below, consider which risks apply to your day-to-day operations.
Required Insurance for Catering Businesses
The following coverages are generally required by venues, clients, landlords, and/or the laws in your state, county, or city.
Keep in mind, this is not a complete list of all the coverages caterers need, only what you are likely to be contractually or legally obligated to carry. In the next section, we will cover other types of insurance caterers need for the best protection against claims.
General Liability Insurance
General liability insurance responds to third-party liability claims (aka damages your business causes to other people), most commonly bodily injuries and property damage.
Many general liability policies also include these coverages:
- Products-completed operations: Protects you against claims regarding your products or services
- Personal and advertising injury: Responds to claims stemming from personal injury (e.g., libel) or how you advertise your business
- Damage to premises rented to you: Provides limited property damage coverage to a rented space (e.g., a commercial kitchen or commissary) in addition to what you get with general liability; after the first seven days in a rented space, it only covers fire damage
- Medical expenses: No-fault coverage for injuries your business causes to others; the injured party does not have to sue you for this coverage to pay out
Think of general liability as the foundation of your business’ coverage. It provides broad protection for some of the most significant third-party risks caterers encounter.
In many cases, you must have an active general liability policy in place before you can purchase additional coverage, such as liquor liability. This is why it’s often the first policy you buy when starting your catering business.
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| Common Catering Risk | How General Liability Insurance Responds | Why This Coverage Matters for Caterers |
|---|---|---|
|
A guest slips on a spilled drink at an event and gets injured |
Covers medical expenses and legal defenses if the caterer is held responsible |
Increased risk of injury and potential lawsuits at events |
|
You accidentally damage the venue property during setup |
Pays for repairs or replacement of damaged property |
You regularly work in third-party venues |
|
A guest is burned by one of your chafing dishes |
Covers injury-related medical costs and legal defense |
Serving hot food increases your third-party injury exposure |
|
Guests become ill days after an event because of the food you served |
Pays for bodily injury claims (products-completed operations coverage) |
Food-related claims often arise after an event ends |
|
A guest trips over catering equipment and suffers minor injuries |
Pays for their medical costs without requiring a lawsuit (medical expenses coverage) |
Small injuries can be resolved quickly without escalating into legal claims |
|
You cause a grease fire in the commercial kitchen you rent |
Helps pay for fire damage to the kitchen (damage to premises rented to you coverage) |
Contracts for any rented space (including venue contracts) often hold you financially responsible for property damage |
|
A venue sues you for defamation after you write a negative post about them online that they claim hurt their business |
Covers legal costs, including attorney’s fees, settlements, and judgments (personal and advertising injury coverage) |
Personal injury lawsuits can be expensive and time-consuming |
Commercial Auto Insurance
In most states, you’re required to have commercial auto insurance for any owned, rented, or leased vehicles you use for work purposes. Even if your vehicle is insured under your personal auto insurance, most of those policies won’t cover claims involving work-related activities.
Commercial auto insurance provides coverage for physical damage to your catering vehicle(s), as well as liability claims like property damage and bodily injuries. Coverage usually includes:
- Liability: Third-party bodily injury and property damage expenses
- Uninsured/underinsured motorist: If you’re involved in an accident with a driver who doesn’t have enough (or any) insurance to cover your damages
- Medical payments: No-fault coverage for medical costs you or your passengers have after an accident
- Collision: Replaces or repairs your vehicle if it’s damaged in a collision, overturn, or rollover
- Comprehensive: Replaces or repairs your vehicle after damage not caused by colliding with another vehicle
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| Common Catering Risk | How Commercial Auto Insurance Responds | Why This Coverage Matters for Caterers |
|---|---|---|
|
You get into an accident in your catering van on the way to an event |
Covers injuries to passengers in the other vehicle, damage to their vehicle, and legal defense if sued (liability coverage) |
Regularly driving to events and different venues increases your risk of an accident |
|
An uninsured driver hits your vehicle |
Helps pay for injuries and damages when the other driver lacks insurance (uninsured/underinsured motorist coverage) |
Not all drivers carry sufficient coverage |
|
After an accident in your van, you and your employees suffer minor injuries |
Pays for immediate medical costs (medical expenses coverage) |
Fast access to medical care coverage for you and your passengers |
|
Your catering van is seriously damaged after a collision with another vehicle |
Pays to repair or replace your vehicle (collision coverage) |
A damaged or destroyed vehicle could disrupt your normal business operations and be expensive to repair |
|
Your vehicle is stolen while parked at an event |
Helps cover replacing your stolen vehicle |
You often park your vehicle at event sites and venues that may not be secure |
Workers Compensation Insurance
This policy is designed to cover the cost of your employees’ state-mandated workers compensation benefits if they are injured on the job or develop a work-related illness. Nearly every state requires employers to have workers compensation insurance, often as soon as you hire your first staff member.
Every state has its own workers comp laws that determine what benefits employees can claim, but generally, your policy will cover:
- Medical expenses
- Lost wages
- Disability benefits
- Death benefits
- Employers liability (employee injuries or illnesses that aren’t included under your state’s workers compensation laws)
These benefits can easily cost thousands of dollars, which is why most states require employers to have insurance to cover them.
Pro Tip: While most states allow you to purchase workers compensation insurance from a private insurer like Food Liability Insurance Program (FLIP), others (OH, ND, WA, and WY) require you to purchase it from a state-controlled fund.
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| Common Catering Risk | How Workers Compensation Insurance Responds | Why This Coverage Matters for Caterers |
|---|---|---|
|
One of your servers pulls a muscle in their back while lifting equipment out of your van |
Covers medical expenses such as emergency room visits, imaging, and ongoing physical therapy |
Helps employees recover and prevents you from paying out of pocket for these costs |
|
A staff member suffers a permanent hand injury due to repetitive motions during food prep |
Provides disability benefits for long-term or permanent impairment |
Some injuries may permanently affect an employee’s ability to work, and disability benefits can be costly |
|
An injured employee sues you for negligence after a workplace accident |
Helps cover your legal defense and costs beyond standard workers comp benefits (employers liability coverage) |
Your employee may choose to pursue legal action even after receiving workers compensation benefits |
Recommended Insurance for Catering Businesses
Getting the coverage you need doesn’t mean only carrying what a contract or the law requires; that’s simply the bare minimum. The following coverages are highly recommended for all catering businesses because of the risks you face in this line of work.
Product Liability Insurance
Product liability insurance responds if someone claims your product (in this case, the food and/or drinks you serve) injured them or damaged their property. For caterers, this often looks like foodborne illness and unlabeled allergen claims.
While the products-completed operations coverage under general liability insurance can also cover claims like these, having product liability insurance gives you extra protection if one happens.
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| Common Catering Risk | How Product Liability Insurance Responds | Why This Coverage Matters for Caterers |
|---|---|---|
|
Guests become ill after eating undercooked chicken at an event |
Covers medical costs and legal defense |
Guests may sue you to cover medical expenses and lost wages due to time spent in the hospital |
|
An undisclosed allergen in pastries you served at an event caused a guest to have a severe reaction |
Pays for medical costs and legal defense |
Guests may sue you for negligence, claiming you are responsible for disclosing ingredients/common allergens |
|
A guest chips a tooth on a foreign object found in a dish you served |
Covers medical costs and legal defense |
Guests may sue you over food contamination, which can happen at multiple points in the preparation process |
Did You Know? FLIP’s catering insurance automatically bundles product liability insurance with your general liability coverage to protect you against product-related claims. Learn more about what’s covered under product liability insurance.
Tools & Equipment (Inland Marine) Insurance
Traveling to various venues and events means taking a lot of gear on the road with you. Tools and equipment insurance (otherwise known as inland marine) is designed to cover damage or theft of your mobile business equipment and inventory.
The keyword here is mobile. Tools and equipment coverage only applies to gear and inventory you take with you from one place to another, whether it’s in transit at the time of damage or not.
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| Common Catering Risk | How Tools & Equipment Insurance Responds | Why This Coverage Matters for Caterers |
|---|---|---|
|
Some of your equipment is stolen from your vehicle while you’re unloading at an event |
Helps pay to replace stolen gear |
You frequently bring your valuable equipment to events, where it may be targeted for theft |
|
Multiple chafing dishes and warmers are damaged during transport to a venue |
Covers damage to equipment while in transit |
Your equipment is more exposed to handling risks because it’s moved often |
|
Someone steals the generator powering your fridge at an event, causing your prepared food to spoil |
Covers replacing the generator and the cost of the spoiled food |
Equipment and inventory loss can be expensive to handle out of pocket |
Cyber Liability Insurance
Whether you have an online booking form or process payments electronically, cyber liability insurance helps cover the resulting expenses if your business is the target of a cyber attack or data breach.
Common cybersecurity threats include:
- Phishing: Fake emails posing as someone you trust to get your personal information
- Ransomware: Software that holds your information hostage until you pay a ransom
- Hacking: Individuals shut down, tamper with, or take over a website or computer network
- Blackmail: Sensitive information a cybercriminal uses against you
43% of small businesses have experienced at least one cyberattack in the past year. To avoid out-of-pocket costs that could force your catering business to close, cyber liability insurance helps cover first- and third-party expenses like:
- Restoring or replacing your compromised data
- Legal assistance if you’re sued by an affected client, venue, or other organization
- Credit monitoring for affected parties if needed
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| Common Catering Risk | How Cyber Liability Insurance Responds | Why This Coverage Matters for Caterers |
|---|---|---|
|
A breach in your online payment system exposes your clients’ credit card information |
Covers breach response costs, notifying customers, and credit monitoring |
Most caterers store client payment and personal information digitally |
|
Ransomware locks you out of your catering schedule and client files |
Covers ransom payments and recovery expenses |
Losing access to your information or systems can mean missed events and lost revenue |
|
An employee falls for a phishing attack, exposing their login info and sensitive data |
Covers investigation, data restoration, and related legal costs |
Your staff may use email or other digital tools to coordinate events, and are often targets of cybercriminals |
Liquor Liability Insurance
If you sell, serve, or provide alcohol as part of your catering services, you need liquor liability insurance for caterers.
Most states have dram shop laws, which hold alcohol servers and providers legally responsible for injuries and property damage caused by their intoxicated patrons. If a guest has too much to drink at your event, drives, and causes a car accident, you could be held responsible if they damage property or hurt someone.
In many cases, you will be required to carry liquor liability insurance before you can get a liquor license. Even if you don’t have to, venues and clients typically require it because alcohol-related claims can be extremely expensive.
General liability policies won’t cover property damage or bodily injury claims that stem from alcohol consumption. Liquor liability closes this coverage gap and protects you from the financial risks that come with serving alcohol.
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| Common Catering Risk | How Liquor Liability Insurance Responds | Why This Coverage Matters for Caterers |
|---|---|---|
|
A guest causes a car accident on the way home from your event after having several drinks |
Covers legal defense and damages stemming from alcohol-related injury or property damage |
Caterers may be held responsible for the actions of intoxicated patrons after the event ends |
|
An intoxicated guest backs their car into the fence at the venue, destroying a large section of it |
Covers the cost of repairing the damaged fence |
Property damage claims can be expensive and sour the relationship between your business and the venue |
|
Your staff member unknowingly serves alcohol to a minor at an event |
Covers legal defense costs |
Dram shop laws can hold you and your employees legally responsible for serving minors or overserving patrons |
Common Venue & Client Insurance Requirements
Venues and clients take your insurance coverages seriously because they want to know you’re prepared to cover the cost of an accident you cause. Otherwise, they may be named in a lawsuit and held partially responsible for your damages simply because they hired you for an event.
General Liability Insurance With Minimum Limits
General liability is the most basic coverage that clients and venues expect you to have. They will specify the minimum coverage limits you need in your contract, or how much your policy will pay for claims.
While you should always confirm what they expect, limits of $2,000,000 aggregate and $1,000,000 per occurrence are common.
- Aggregate limit = The maximum amount your policy will pay for all claims in a policy period
- Occurrence limit = The maximum amount your policy will pay for a single claim
Liquor Liability (If Serving Alcohol)
If your catering services include alcohol, anyone you work with will expect you to carry liquor liability insurance.
Just like general liability, you may be required to meet certain minimum limits with this coverage. These also tend to be $2,000,000 aggregate and $1,000,000 per occurrence, but always check your contract or ask the venue/client for confirmation.
Did You Know? Your general liability limits must be equal to or greater than your liquor liability limits for your liquor policy to be valid.
Your Certificate of Insurance (COI)
People and businesses you work with will likely ask to see your Certificate of Insurance, or COI. You might hear this called your proof of insurance, insurance certificate, or certificate of coverage.
Your COI is a document that contains important information about your insurance coverage, including:
- The types of coverage you have
- Your policy limits
- Information about the policyholder (you)
- Information about additional insureds (more on this soon)
Clients and venues want a copy of your COI, so they know your coverage and policy limits meet their requirements, and that your coverage is currently active.
Pro Tip: With FLIP, your COI is instantly available after you purchase your policy. Log in to your user account any time to download a copy when venues or clients ask to see it.
Additional Insured Status
It’s common for clients and venues to ask you to add them to your policy as an additional insured. This means they receive protection from your coverage if they’re named in a lawsuit because of an accident you caused.
If you rent a commissary or commercial kitchen, the landlord or kitchen manager may also request additional insured status. They’re added to your policy via an endorsement, a document that either expands or restricts your coverage.
Additional insureds are also listed on your COI, which is another reason why you may be asked to provide your COI by a client or venue. They want to confirm that they have additional insured status to protect them.
Pro Tip: With FLIP, you can add unlimited additional insureds to your policy for free during the application process or at any time via your user dashboard.
The Cost of Insurance for Your Catering Business
A base catering insurance policy from FLIP starts at $25.92 a month, or $299 a year, and includes:
- General liability
- Product liability
- Products-completed operations
- Personal and advertising injury
- Damage to premises rented to you
- Medical expenses
However, one of the biggest factors affecting the cost of your catering insurance is which additional coverages you need to properly shield your business from common risks.
- Commercial auto: custom quote
- Cyber liability: $8.25 per month
- Liquor liability: bundle with general liability starting at $37.75 per month
- Tools and equipment: $8.25 per month
- Workers compensation: custom quote
Other factors include your business’ gross annual income and whether you have a history of filing expensive claims.
The Benefits of Insuring Your Catering Business
Getting insured isn’t just checking another task off your to-do list or meeting legal requirements. It comes with even more perks you don’t want to miss out on.
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| Increased Bookings | Money Saved | Peace of Mind |
|---|---|---|
|
Having insurance at the ready when a new gig comes up increases your chances of expanding your clientele and bringing in more dough. Don’t miss out on opportunities because you’re scrambling to get insured while trying to land a contract. |
While it may feel like insurance is yet another expense, it’s small potatoes compared to the out-of-pocket expenses you face without it. In fact, the average catering claim costs our policyholders $4,300. Having the right coverage in place can save you money in the long run, making it well worth the investment. |
You can put a price on insurance, but you can’t put a price on peace of mind. Knowing you have a financial safety net in place if something goes wrong allows you to focus on growing your business and exceeding your clients’ expectations. |
How to Get Catering Business Insurance That Meets Client Requirements
FLIP takes the stress out of getting the coverage you need with a simple online process:
- Start your application
- Select “Catering” as your business activity (and add others if applicable)
- Complete all required fields
- Select add-on coverages like tools and equipment or cyber liability as needed
- Get your free quote and finish checking out
Please note that commercial auto insurance and workers compensation insurance are separate applications.
If you need higher limits or have any questions, our team is happy to help! Call 844.520.6992 to speak with a licensed, U.S.-based customer service representative.
Free Download: Catering Insurance Requirements Checklist
Keep track of the coverages you need (and why you need them) with this handy checklist. Get it for free today and use it before every event to make sure you’re prepared to meet requirements and handle any curveballs that come your way.
FAQs About Liability Insurance for Catering Businesses
Is Catering Insurance Required by Law?
Some types of insurance may be required by law, such as workers compensation or liquor liability. Even if coverage isn’t legally required, it’s still highly beneficial because it shields you from risks that lead to expensive claims. Plus, clients and venues often require coverage like general liability insurance, even though the law doesn’t.
Can I Get Catering Insurance With No Employees?
Yes! FLIP’s catering insurance is designed for employers and solo operators.
Does a Venue’s Insurance Cover Me If Something Goes Wrong?
No, the venue’s insurance is there to protect them if they’re responsible for a claim, not you. That’s why it’s crucial to have your own insurance; it’s designed to shield you from liability expenses, so you don’t have to rely on anyone else’s coverage.