October 16, 2023
If you run a catering business, then you need catering business insurance.
Whether you’re serving food to hundreds of people at a wedding, or you’re running your own food truck at festivals and events, insurance gives you vital protection if something goes wrong. Without it, you’ll be placing your business – and therefore your own finances – at serious long-term risk. You may also be holding your business back from its true potential, and maximum profitability.
This guide explains all the key basics around catering business insurance: why it’s so important, what it protects you against, and why it might not cost as much as you thought.
Short answer: yes! Every type of food catering business that is serving members of the public should have some form of insurance in place, at the very least to cover them against any illness or injury caused to customers.
Types of business that should be insured include (and are by no means limited to): event caterers, wedding caterers, business and corporate caterers, and artisan food operators, and even if you run a banqueting or exhibition hall and have your own catering staff on-site.
As catering businesses generally operate across a wide range of locations, it’s important to make sure that you’re covered for every reasonable eventuality, across every single place that you might operate in.
You might be tempted to focus on the food you sell and/or produce as the main risk of a claim being made against you. This is undoubtedly a major concern, but for any mobile catering or food-related operation, it’s just one of a host of possible issues that can easily creep up at any time. Five of the biggest include:
Foodborne illnesses can easily strike, almost at any time, and the impact of them both on you and your customers can be severe. The most common causes of them for mobile catering businesses are food that is either undercooked, or that hasn’t been stored properly, and so becomes infected with dangerous bacteria. Poor hygiene practice, such as failing to wash hands on a regular basis can also allow bacteria to spread.
While all good types of insurance for a catering business will take care of any claims arising from this, you shouldn’t rely on insurance to bail you out. You should be as proactive and diligent as you possibly can be, and strive to achieve and maintain a five-star food hygiene rating from your local authority.
Sometimes, circumstances conspire to make some of your food unfit for sale, or to make some of your ingredients unusable. For example, if you have anything stored in the fridge, then that can’t be used if the fridge breaks or if there’s a power cut as the food will become too warm and at risk of bacteria spreading. Of course, if you’ve made a significant investment into that stock, then that can have a major impact on your finances, so taking out insurance means you can be compensated – as long as you can prove it was because of events out of your control.
Similar to the previous point, any equipment or machinery that can’t be used can seriously disrupt the services you can offer to your clients. This could be something as simple as a whisk or mixer going down if you make milkshakes, to a faulty or broken oven. As well as damage or mechanical breakdown, these items are often vulnerable to theft or even vandalism, which can similarly hamper your ability to prepare and sell products, or meet the requirements of your clients. Insurance can ensure that when these situations occur, you have the finances to source repairs or replacements in a timely manner, so that you can keep your business up and running.
As your business grows, you may find that you need to employ other people, so that you can handle all the demand coming your way, and so that you don’t have to do everything all by yourself. In this situation – even if you only employ one other person – it is absolutely essential that you have employer’s insurance in place. Under the terms of the Work Injury Compensation Act, if your employee is injured in the course of their work, you are legally required to compensate them for all their medical expenses and lost earnings that result. Employers’ insurance can offer financial protection against these eventualities.
As you can see, there are several different circumstances where catering business insurance comes into play. But from your perspective, it gives you vital protection and reassurance in a number of different areas that go far beyond your day-to-day operations:
When you run a small business, your personal and business finances are very closely interlinked – even if you have the official separation of operating as a limited company. When your normal activity is disrupted, your ability to generate income is severely impacted and you may find yourself struggling to pay the bills. Additionally, a successful claim for compensation can cost thousands of pounds, plus legal fees. Insurance helps you keep up and running, and covers many of the costs that can crop up unexpectedly.
If you’re running any sort of catering business, then you’ll be expected to comply with a range of different rules and regulations. As mentioned above, you’ll need employers’ insurance if you employ at least one other person, while you should also have products insurance to cover all the goods and services you provide. A good-quality catering business insurance policy will roll all of these protections and more into a single manageable monthly payment.
Many catering businesses have to work very hard to convince and reassure people that they operate to the highest professional standards, from service to hygiene and everything in between. This doesn’t just apply to customers, who want to know that your food is safe (and tasty), but also your employees and suppliers, who want to feel that they’re dealing with a professional, diligent organisation. Being able to demonstrate that you have good insurance cover in place can show them that you take your business and your responsibilities seriously.
The vast majority of events will expect to see proof of your insurance as a condition of your catering business attending. Generally, they will expect to see evidence of a certain level of public liability insurance when you make your application. Without this in place, you’ll find it extremely difficult to get access to any prime opportunities to make major sales, because event organisers naturally want to protect themselves against the claim. That’s why you should always look for an insurance policy with a strong level of public liability cover: £5 million is a good starting point.
Of course, every now and again, circumstances will arise which simply aren’t avoidable, and you may find yourself having to defend your business and actions in court. Even if you’re successful, this can be an extremely expensive endeavour in terms of legal fees, and that’s without considering the time you’ll lose that you could otherwise spend trading and developing your business. Some catering business insurance policies therefore offer extra cover for legal support, so that the financial and time loads of any court actions or disputes can be lightened.
As this blog demonstrates, insurance cover is critical, whatever type of catering business you want to run. And at Protectivity, we have years of experience in providing catering business insurance to creative entrepreneurs just like you.
With one of our affordable policies, you can:
Get up to £5 million of public liability cover against accidental injury or property damage
Up to £10 million of employers’ liability insurance, which is a legal requirement if you employ at least one other person
Products liability in case injury or illness is caused by the items and creations you sell
Optional commercial legal protection to help you with the expense of any court activity or contractual disputes
Our cover is available from just a few pounds a month, meaning you can give your business security and peace of mind, whatever the future may hold. Take a closer look at our catering business insurance today.
This blog has been created as general information and should not be taken as advice. Make sure you have the correct level of insurance for your requirements and always review policy documentation.