What Kind Of Insurance Does A Caterer Need?
As a caterer, you are open to several different types of risk. These risks can lead to claims which can lead to a serious financial loss. Luckily, caterers can protect their business with catering insurance. “What kind of insurance does a caterer need?” you may ask. And well, we understand that insurance can be a hard-to-digest topic. That is why we created this comprehensive guide to walk you through the insurance that your catering business needs.
Listed below are the kinds of insurance a caterer needs to protect their business from the financial fallout of claims.
General Liability
General liability insurance can protect your business from third-party bodily injury and property damage claims that caterers might face. This includes lawsuits. A single lawsuit or claim can be financially devastating to your business. Claims costs can include medical bills, attorney fees, and equipment replacement costs. Even if you are not found liable for the claim, you may still be on the hook for legal expenses and defense costs. Safeguarding your business with catering insurance is an important risk management tool to protect you from the unexpected.
For example, in the catering business, one common risk that you may face during every event is food poisoning, even if you take precautions. According to the CDC, approximately 48 million people get sick from a foodborne illness each year. Of those, 128,000 are hospitalized and 3,000 don’t make a full recovery. The last thing you want to do is put your business at risk and pay for a lawsuit completely out-of-pocket.
Learn more about real claims fellow caterers in the industry have faced here.
Product and Completed Operations Coverage
This important aspect of catering insurance covers you for liability arising out of your products or business operations occurring away from your premises once those operations have been completed or abandoned. This includes food-borne illness claims and unlabeled allergens.
An example of a product and completed operations claim would be a customer with a severe nut allergy who falls ill after eating your food. You forgot to label which dishes had nuts. They sue you and you are responsible for their medical bills.
Personal and Advertising Injury Coverage
Personal and advertising injury coverage is especially helpful because your catering business may depend on advertising efforts to gain new clients and retain your current clients. If a third party were to take you to court over your advertisement, you can rest assured that your catering insurance policy may respond to covered claims and you don’t have to deal with the legal expenses on your own.
Personal and advertising injury coverage can protect you from the following:
- Libel
- Slander
- Invasion of privacy
- Copyright infringement
- Misappropriation of advertising ideas
Damage to Premises Rented Coverage
This coverage applies to professional catering businesses that rent out facilities or venues for an event. If you or a member of your team damage the property or its contents during an event, this coverage on your policy may respond to a covered claim and keep you from paying such a crippling expense.
Additional Coverages
The Food Liability Insurance Program (FLIP) offers several additional coverages to provide further insurance protection for your catering business.
Trailer Endorsement –
If your catering business has a food trailer, you can extend your general liability coverage to it when it is detached from your towing vehicle and on-premises. You can add this endorsement to your policy at any time through your user dashboard.
Cyber Liability Insurance –
If you store client information online on a tablet or mobile device then you are at risk for cybercrime or cyber security breaches. Protect yourself from that financial stress with cyber liability insurance.
How Catering Insurance Protects Your Business
Catering insurance can protect your business in a number of ways but here is a little scenario of how catering insurance can protect your business.
While catering dinner for a high-profile company, one of your sterno burners unknowingly runs out of kerosene and the chicken sits cold for the majority of the night. You don’t catch the cold dish in time and unfortunately, several people eat the chicken and fall ill with food poisoning. The CEO of the company is one of those who fell ill and is now suing you. Without insurance, you could face thousands of dollars in out-of-pocket costs. However, with catering insurance all you have to do is file a claim, provide the necessary info, and let your insurance go to work.
To get even more specific on how catering insurance protects your business, here are 3 ways catering insurance protects your business.
1. Customizable Coverages
FLIP offers catering business owners several insurance coverage options when it comes to insuring their business.
- General Liability
- Product Liability
- Tools and Equipment Coverage
- Damage to Premises Rented
- Cyber Liability insurance
- Trailer Endorsement
- Free & Unlimited Additional Insureds
These coverages, detailed in the previous section, combined can protect your business from the most common claims. In order to provide a personalized insurance plan for your unique business, you can increase the coverage limits of these claims.
2. Cater Anywhere, At Any Time
Our catering insurance can protect your business anywhere you operate at any time of day. If you have a catering gig at an outdoor festival on a Friday, then a wedding in a barn on a Saturday, you can still be covered. Book clients easily knowing that FLIP has your back.
3. Free Unlimited Additional Insureds
A big part of your catering business is bringing the food to your customers and as mentioned previously, that can include working anywhere. Many places you cater to may require you to list them as an additional insured on your insurance policy. We know you are busy, that is why we offer you free unlimited additional insureds. You can add them day or night just by logging into your user dashboard in just minutes.
Benefits Of Catering Insurance
Catering insurance can provide several different benefits for your business. Benefits include peace of mind, increased business credibility, and saved money.
Peace Of Mind
Insuring your business not only protects you financially but also protects your peace of mind as well. When you have peace of mind, you are better able to run your business and make decisions that are well-informed and educated. Not to mention, when your business is insured, you can rest easy knowing that when a claim happens you are protected.
According to a study conducted by Fit Small Business, 40% of small businesses filed a claim. While this number isn’t alarmingly large, it shows that at some point in your business ownership career, you will be faced with a claim. In the same study, they found that only 54% of small businesses had insurance, and while that percentage is over half, it still means that half of business owners don’t have business insurance. Don’t be one of those business owners. Protect your business today with catering insurance.
Increased Business Credibility
This bonus reason is a great perk for insuring your catering business. Insurance coverage helps boost your credibility and allows you to book more jobs. This not only protects your business financially but it helps to increase your professionalism. Become a trustworthy catering business and set yourself up for success.
Saved Money
Catering insurance can help your business save money. Now, we know that may seem backward, spending money in order to save money, but hear us out. A claim compared to your monthly insurance payment is so much more expensive. Depending on the severity, claims could cost your business thousands of dollars in attorney fees, medical fees, or equipment replacement costs.
Here are a few examples of claims FLIP has dealt with and how much they cost.
- A caterer served a snapper dish that injured a client who swallowed a bone. FLIP paid $4,299.
- In another case, a caterer was serving a BBQ. Their smoker caught fire and FLIP paid $4,582.
- One caterer lost their inventory when the compressor on their walk-in refrigerator went out. FLIP paid $4,503.
Risks Of Running A Catering Business
Running a catering business isn’t easy but it is fulfilling. Like all businesses, catering comes with risks. Listed below are some of the risks associated with a catering business.
- Food poisoning
- Broken equipment
- Client injury
- Lawsuits
- Unlabeled allergens
The list could go on and on. The good news is that with FLIP, these are covered risks and we have a few ways you can mitigate these risks.
How To Mitigate Risk
- Double-check that all your burners are working properly and keep the food heated to a safe temperature.
- Label all your potential allergens and ask your client if there are any major food allergies.
- Secure all of your equipment. This includes extension cords, burners, food pans, etc.
To Wrap Up
We hope this blog provided an answer to the question “What kind of insurance does a caterer need?” When you insure your business with catering insurance you not only receive peace of mind but real financial stress is taken away. With insurance for caterers, you have the option of customizing your coverage to fit the unique needs of your business. General liability, product liability, tools and equipment coverage, and cyber liability are all fantastic tools to have in your toolbox when a claim happens. If you’re ready to take that next step to increase your credibility as a caterer, start your quote today!
