Whenever you budget the expenses of your business, Catering insurance must be high on the list because you can’t always know exactly what could happen in the future.
Need General Liability Insurance for Your Catering
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With the protection provided by liability insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.
Like any business owner, for your Catering enterprise, you must consider how much financial liability you are taking on.
If your Catering business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a complete wipe-out.
This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions.
In this article, we are giving very general guidelines for small businesses to highlight what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.
The question is, can you afford to NOT have insurance for your Catering business?
What this means, for any Catering business owner, is that if some company claims that your business caused them some physical or economic damage, a court can award damages far beyond the total size of your business.
Your Catering business is not protected by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.
In some states, like Texas, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.
In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have sued for.
When you are running your Catering operations, you can’t deny responsibility for the outcomes of your actions.
Even more importantly, unless you have spent beforehand the money necessary to have your business running as a corporation, all of that liability belongs to you alone.
What does Catering insurance protect you from?
For your Catering business, the most important kinds of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.
In addition there are some official kinds of insurance that various states require.
In the next few paragraphs, we will explain the most important points any Catering business owner should consider when negotiating the insurance needed.
The main categories of insurance for your Catering businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.
General liability insurance
Any Catering business is dealing directly with members of the public, and that means you always have the danger that some accident can happen to them bodily or else something of theirs can be damaged.
In such a case, they can require compensation.
General liability insurance policy for your Catering business protects you against claims coming from injury to clients or damage to their property.
It protects your Catering business from the claims themselves and as well to any resulting court costs and legal fees of the lawsuits.
In many cases, it should help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.
The usual level of general liability insurance for your Catering business would be with a upper limit of $1 million for a single claim and a total of $2 million for the whole year.
See the table in the costing section below for average prices of general liability insurance for your Catering insurance operations.
Professional liability insurance for your Catering business
In the event where a customer alleges some negligence, errors, or omissions in how you conducted your Catering business for them, you can quickly have to fight a court case.
Even if the lawsuit against you is judged in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.
Most small Catering business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.
See the table in the cost of Catering insurance section below for average prices of professional liability insurance for your Catering operations.
Product liability insurance
Whatever goods you sell or advice you give about the goods, you are running a risk that customers may claim that what they received didn’t meet your description of function, or that your advice was basically incorrect.
You need to be aware of the specific laws of product liability in your own state.
For example, in California, all businesses in the supply chain can be held liable for injuries caused by products claimed to be defective.
To cover yourself against any possible lawsuit, you need Product liability insurance for Catering
Only you can know exactly how much insurance you need.
Best advice is to talk to experienced insurance agents, brokers or company representatives for guidance.
Commercial vehicle insurance for your Catering business
Beware! – most policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the vehicle is being used for business purposes.
The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.
Commercial van policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.
In addition, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your truck is involved in a crash.
Most states, other than Virginia and New Hampshire, mandate this type of insurance.
The necessary value of the insurance is worked-out for the depreciated value of the vehicle, and your requested level of cover of contents.
Tools and Equipment insurance
Since your Catering business needs specialized and costly equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.
The equipment may be subject to malicious damage, deliberate fire, theft, other such unpredicted acts.
Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can destroy your whole business in one stroke.
Unless you can afford to immediately replace such specific gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy everything needed to keep your Catering business running.
It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your Catering business’ equipment.
Commercial Property insurance
Any Catering business that owns or rents space in a building should have a commercial property insurance policy.
If you own the property, you probably have a substantial capital investment, along with a big liability if there’s a mortgage.
Any physical building location should carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against deliberate damages like theft and vandalism.
In other states like Washington, where unlimited cold snaps can cause damage to outer coverings of Catering business premises, there is a need for more extra cover than in warmer climes.
Because the level of cover depends entirely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of Catering insurance section below to give some indication of the average prices per million dollars of property insurance for your Catering business.
Temporary insurance by month, week or day for your Catering business
Is your Catering business working part-time or casually, or is the level of business fluctuating?
Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for Catering – are special policies where you can cover a specific period when you want to be covered.
By only paying for that period of cover, you will save by having reduced premiums but still having adequate risk cover.
The important feature of short-term insurance is that you buy the cover for a defined period – a nominated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.
When you are expecting periods of higher business activity, get the existing cover increased.
Talk to your insurance agent, broker or the company’s representatives to see what options you have.
Business Owners Policy BOP for your Catering business
You have the choice to combine several of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.
A BOP merges commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.
BOP insurance will cover you if any claims of injury or property damage are made.
It is mostly the right choice for small and medium-sized Catering businesses, such as yours.
There are some limits that will dictate whether BOP is suitable for your own business.
BOPs do not cover your professional liability or commercial vehicle cover.
Also, the size of your business will determine whether you are permitted to take out BOP cover.
The typical business that is eligible for a BOP policy must have fewer than one hundred employees, and under five million dollars in annual revenue.
Plus, you must separately take out the required worker’s compensation, health and disability insurance as determined for your state.
Workers Compensation insurance for your Catering business employees
In most states, it is mandatory to have workers compensation insurance when your Catering business has one or more employees.
Workers compensation insurance covers the business against any costs that arise if an employee experiences an injury or becomes sick as a result of work.
The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.
Failure to meet a state’s laws in this regard can leave you as the employer required to pay penalties levied by the states.
In these states, you may not obtain your workers compensation obligations from private insurance corporations.
Workers compensation charges are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.
However, you must see the relevant authorities in your state.
Average costs of these types of insurance
Although every Catering insurance requirement is unique, there are enough examples of usual quotes from insurance companies for us to give rough guidelines, including what are the cheapest rates offered.
Of course, you should always check with an insurance representative what’s relevant for your business.
The list below is of annual premiums we have researched for the main types of insurance your Catering businesses needs.
|Types of insurance||Price range|
|Commercial vehicle insurance||$1699 – $3068|
|Equipment insurance||$310 – $1023|
|General liability insurance||$599 – $1172|
|Commercial insurance||$1192 – $2130|
|Product liability insurance||$327 – $735|
|Public liability insurance||$296 – $595|
Cost of insurance for your Catering operations depends on many different factors.
We have estimated these figures for small independent Catering businesses.
The location and size and type of your Catering business can have a big effect on the cost of different policies.
You should consult with professional insurance agents and brokers, or insurance company representatives.
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As well you can let the internet do the work for you by looking for insurance companies near where your business is located.
Another reliable source of information is the local Better Business Bureau in your town.
What is small business insurance for Catering operations?
This is an umbrella term used to describe common insurance policies designed to protect Catering business owners from risks like bodily injury, property damage, claims of negligence.
Does my Catering business have to have insurance?
Some of the types of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.
Several other forms are required by state law, such as workers compensation and vehicle insurance.
What does a small Catering business insurance policy cover?
Liability insurance provides insurance against lawsuits or claims filed by a customer for bodily injury, property damage, or negligence.
The exact cover will vary based on your own operations.
See the table in the costing section above for average prices of the best policies for Catering insurance.
How much will Catering business insurance cost?
In addition to the size of the business, some other factors, such as location and claims history, are used to determine your policy’s cost.
You should discuss with professional insurance agents and brokers, or insurance company representatives.