Average Cost of Catering Insurance 2020

The average cost of catering insurance starts from around £51 a year or £6.09 a month for a sole trader in the UK. However, catering business insurance costs can be significantly higher depending on factors like your business structure, number of employees and whether or not you operate a mobile van. Whether you're new to the business or insuring an established catering company, here's what you need to know about catering insurance costs.

Average Cost of Catering Insurance

The average cost of public liability insurance with £2 million of cover for a self-employed caterer working alone is £51. However, the cost of catering insurance can rise by 12% to 350% or more if you form a partnership or limited liability company (LLC). And LLCs with multiple directors cost significantly more to insure than those with just one director.

Average cost of £2m of catering public liability insurance (per year)
Sole Trader£51
Partnership£66
Limited Liability Company (1 director)£57
Limited Liability Company (2 directors)£226
chart showing the average cost of public liability catering insurance

How does coverage level affect catering insurance costs?

Another factor that has an impact on the cost of your catering business insurance is the level of cover. The higher the cover limits, the higher the rate. However, additional cover typically costs less per £1 million of cover than you pay for the first £1m of cover.

For example, a sole trader would pay on average £48 for the first £1 million of public liability catering insurance, but just £3 for the next million pounds of cover. In the chart below you can see how catering insurance costs increase with coverage levels and across different business structures.

chart showing the average cost of catering insurance by amount of cover

How does hiring employees affect catering insurance costs?

Employees are an essential part of most catering businesses, but once you hire somebody you should expect your insurance costs to rise significantly. Why? The law requires businesses to have employers' liability cover in place if you have anyone working for you—you may even need it if they're family, they're paid in cash and/or they work on a part-time basis.

The more catering staff you hire, the higher your employer's liability rates. For example, a sole trader would pay around £497 for £2m of public liability and employers' liability for 5 workers, which is nearly 10X more than the public liability cover alone.

chart showing the average cost of catering insurance with employers' liability

How does having a mobile catering van affect insurance costs?

Caterers operating a mobile service from a van will incur additional insurance costs; besides having to pay for commercial vehicle insurance, public liability insurance costs for a catering business are higher for those with a mobile van. In fact, this business model can increase your catering insurance costs by 30% to 60% or more, as you can see in the following graph.

chart showing the average cost of catering insurance with a mobile van

Other factors that influence your catering insurance rate

Many additional factors can have a bearing on the amount you pay to insure your catering business. For instance, your location alone can impact prices by 20% or more.

In addition to extras like employers' liability, some businesses require or opt for additional coverages like legal, personal accident, tools, stock and business and office equipment insurance.

How to Save Money on Catering Insurance

There are a few steps you can take to save money on insurance for your catering business. First, as with personal insurance it is beneficial to check prices in the wider UK market because quotes can vary massively from firm to firm. For example, in our study the range of quotes for a self-employed caterer with 2 employees ranged from £149 to £261, a difference of 75%. No matter the size of your business or its financial situation, it's usually a good idea to get quotes from multiple sources.

Second, insurance firms may let you choose a higher excess to essentially give you a discount on your catering insurance, but this strategy is not for everyone. The reduction in premium is often quite small, especially when you take into account the additional excess you'd need to pay in the event of a covered claim.

Another good way to save money on insurance is paying upfront for the whole year. This tip can save you around 12.5% on your catering business insurance costs each year.

Methodology

We gathered dozens of quotes for public liability catering insurance to find out what a typical caterer might pay for cover. We varied quotes by different factors like the level of cover, type of business and the number of employees.

Insurance quotes can vary noticeably from business to business depending on the situation. As a result, your business insurance premium might be significantly higher or lower than the rates mentioned here. Use this information just as a rough guide to help you learn more about catering insurance costs and how different factors can affect insurance premiums in general.

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