Catering Insurance

Catering Insurance

From small local catering services to large banquet facilities, protect your business with a catering insurance policy that’s built around your needs.

Zensurance - Catering Business

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Insurance for caterers

During the preparation for any event, there is so much to plan for (and, for catering staff, so many meals to coordinate). However, it’s important to plan for the unexpected as well. Out of the hundreds (or even thousands) of people you serve, one small liability claim from a guest can cost tens of thousands of dollars, totally disrupting your business’s financial security. Before taking on any catering event, it’s imperative to have adequate catering insurance coverage.

Catering insurance is a combination of several policies designed to protect catering companies. Catering insurance covers risks specific to serving food and drink at an event or facility.

Catering insurance offers comprehensive coverage for the general and specific risks that catering businesses may face. You can expect catering insurance to include the following coverages:

  • Commercial General Liability (CGL) Insurance: CGL insurance protects you from many general, day-to-day risks faced when running a business. If a third party is injured or their property is damaged due to your business’s actions, you can be held liable, and CGL may offer protection. For example, if an employee hands a customer a hot plate and burns their hand, you could be liable for their injury. In this case, a CGL policy could cover the cost of their medical bills.
    • Product Liability Insurance: As part of a CGL policy, you can also be covered for product-related risks. This coverage protects you against claims of property damage or bodily injury caused by your products, such as the food or drinks you serve. For instance, say a customer has an allergic reaction to a dessert you serve and alleges there must have been cross-contamination. Product liability insurance would cover their medical costs and your legal defence fees. Be advised that product liability insurance may not cover claims related to alcohol that you serve at an event. If you serve alcohol, you may need liquor liability insurance also.
  • Contents Insurance: Contents insurance protects business assets from insured risks resulting in damage or destruction. Examples of insured risks include fire, theft, and vandalism. For example, say you’re catering at a wedding, and a fire breaks out in the banquet hall due to an electrical fault. Contents insurance could cover damage to your catering property that was damaged (and any spoiled food) due to the fire.
  • Business Interruption Insurance: This coverage provides financial reimbursement for lost income after an insured event. For example, say the fire in the previous example caused damage to a significant portion of your catering equipment, meaning you were unable to work at subsequent events due to a lack of equipment. Business interruption insurance could cover the cost estimated in lost revenue. Please be advised that business interruption coverage doesn’t provide coverage for income that’s lost due to a pandemic, infectious disease, or government-mandated closures.
  • Equipment Breakdown Insurance: Equipment breakdown insurance provides coverage to repair or replace professional equipment that’s broken down or damaged due to mechanical failure or an electrical issue. You can also be covered for lost revenue and food spoilage that’s directly related to the claim. Suppose you’re catering at an event, and your warming oven breaks down, meaning hot food cannot be served. Equipment breakdown insurance can cover the costs to repair the oven, and cover the estimated lost income and food spoilage costs.
  • Legal Expense Insurance: Legal expense insurance covers the costs of hiring a lawyer where coverage isn’t provided under another policy (e.g. property protection, tax protection, or employee bodily injury). Legal expense insurance provides your business with legal advice from a professional lawyer and the financial coverage to retain legal services when needed.
  • Event Liability Insurance: If your catering company’s services include organizing social or corporate events at rented venues, event liability insurance is necessary to cover third-party bodily injury or third-party property damage claims that may arise at that event. Event liability insurance protects catering companies and individuals from liabilities associated with hosting events, including banquets, weddings, and other gatherings you host.

Catering businesses come in all shapes and sizes, so there’s no fixed cost. For a starting point, a small- to medium-sized catering business can anticipate a starting cost of approximately $800 per year for commercial general liability insurance with a policy limit of $2 million.

To calculate a quote, an insurance company will take into consideration the components that make your business unique.

Here are some of the main factors you can expect to be asked about when making a quote:

  • Years of experience
  • Types of services
  • Locations served
  • Annual and projected gross revenue
  • Number of employees

If you serve food or drink at events, you should protect your business with a catering insurance policy. This insurance package is recommended for catering businesses of varying sizes and can be tailored to suit your needs, including:

  • Social event caterers
  • Wedding caterers
  • Corporate event caterers
  • Concession caterers
  • Mobile catering businesses

Getting insured is quick and easy!

Complete our 5-minute online application for a free catering insurance quote.

Common claims scenarios

Catering Event - Food liability

Problem: Several customers became ill after you accidentally served food that was stored at the wrong temperature.

Outcome: Your product liability insurance covers the legal expenses and medical fees.

Spoiled food

Problem: A power surge damages several of your refrigeration units the night before an event, causing the spoilage of hundreds of pre-prepped meals.

Outcome: Your equipment breakdown insurance covers the cost to repair the units, and the cost of the food spoilage.

Commercial kitchen fire

Problem: A fire destroys your catering kitchen, causing you to temporarily move into another one during repairs.

Outcome: Your business interruption insurance covers the estimated income lost, as well as rent and electricity for both kitchens during the time it takes to restore your kitchen.

Frequently asked questions

Do I need specific coverage if I serve alcohol during catering events?

If you serve alcohol at your catering events, you should consider adding liquor liability to your insurance policy. Catering staff are also required to be Smart Serve certified to have an understanding that they’re not serving alcohol to guests beyond the point of intoxication. This can be a challenge, as everyone reacts to alcohol differently – however, you may be held liable if you serve alcohol to a customer who causes an accident, and alcohol is considered a contributing factor in the incident.

Am I restricted to the types of dishes I can cater?

Your business can prepare and serve any dish or cuisine except for any food that has cannabis ingredients.

My catering company operates through a third-party commercial kitchen, do I need to include them into my policy?

Yes, if you run your catering through another business’s kitchen (say a recreational centre, convention centre or banquet hall), most will ask to be included as an additional insured on your policy. This will ensure their equipment/premises are protected in the event of a claim made on your behalf.

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You’ll get comprehensive coverage at a great price when you purchase an insurance policy through Zensurance.

We’ve partnered with more than 50 leading Canadian insurance providers, so you’ll get a variety of policy options and premiums to suit your coverage needs and budget.