Catering Insurance: What do you Really Need?

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Catering Insurance UK

A catering business faces a wide range of risks, which you can protect against with the right business insurance coverages. Public and product liability are mission critical across the board, but there are other business insurance coverages you might need as well. Here's what you need to know about catering insurance to protect you and your business.

Types of Catering Insurance

While insurance needs vary from business to business, there are a few types of insurance that catering businesses frequently need. We discuss them below and also provide some examples to help show how the different types of cover work.

1. Public and Product Liability Insurance for a Catering Business

Public Liability/product liability insurance for a catering business provides financial protection against claims by members of the public (e.g., a customer, someone who eats your food, etc.) for injury or property damage. Public liability insurance can cover both legal costs and compensation payments if you're sued. The UK marketplace frequently sells product liability with limits of £1 million, £2 million, £5 million or £10 million although other amounts can be found as well.

  • Bodily Injury Example: Diners come down with food poisoning after an event you catered. You're sued for personal injury damages.
  • Property Damage Example: When carrying your catering equipment into a venue, one of your employees accidentally knocks into and damages an expensive piece of artwork. You're sued for repair costs.

2. Employers' Liability Insurance for a Catering Business

Employers' Liability insurance is required by law for any catering business that has any employees, even if they're working part time or occasionally. This type of business insurance covers legal defence costs and claims settlements if an employee sues you for a work-related illness or injury. The cost of employers' liability depends on how many employees you have, as well as other factors.

  • Employers' Liability Example: An employee slips and falls whilst working, seriously injuring their back. They blame you and sue for damages.

3. Professional Indemnity Insurance for a Catering Business

Professional Indemnity insurance can protect you from a compensation claim from a client who is unhappy with your food or service. Perhaps there was a misunderstanding, there was a problem with your equipment or they are just not satisfied with your work. Professional indemnity insurance can cover legal defence costs and compensation settlements.

  • Professional Indemnity Example: Your mobile catering van breaks down on the way to an event. The event organisers are forced to scramble to find a replacement catering solution. It costs them twice as much and they sue you as a result.

4. Tools/Equipment Insurance for a Catering Business

Tools/Equipment Cover can cover replacement in the case of theft or accidental damage or even breakdown. If you need cover for equipment away from your premises you might need to pay extra for that. And you can even buy cover for equipment hires. If you can't work without mission critical pieces of catering equipment then it can be safer to insure them.

  • Tools/Equipment Cover Example: A key piece of equipment is damaged during transport to an event. The right equipment cover can cover the cost to repair or replace it.

5. Stock Insurance for a Catering Business

Stock Cover provides compensation for the loss or damage to the food your catering business sells. Stock cover can even cover food spoiling due to a freezer issue, food in transit on the way to an event, food at an event, etc. As with all the covers mentioned on this page the actual coverage will vary from company to company so be sure to check the terms before you sign up.

  • Stock Cover Example: During the night your storeroom is broken into and thousands of pounds worth of steak and seafood are stolen ahead of a big event. Stock cover can cover the cost of replacement.

6. Personal Accident Insurance for a Catering Business

Personal Accident insurance can provide a financial benefit to you and even your employees in case of a workplace injury. This cover is a "benefit" (so not tax deductible) and would be paid either as a weekly payout for temporary injury (e.g., broken arm) or a lump sum payout for permanent disability (e.g., loss of an eye). Personal accident cover can help you pay for day-to-day household bills while you're out of work.

  • Personal Accident Example: You slip and fall at work, seriously breaking your arm. You're unable to work for 6 weeks while your arm heals so you claim for the weekly benefit to keep you going until you're back at work.

In addition, depending on their specific needs a caterer might also need other types of cover such as business interruption, legals costs, contents, commercial property, etc.

Mobile Catering Businesses

If you run a mobile catering business you'll also need insurance for your catering van or trailer—on top of any other business insurance coverages mentioned above. Mobile catering vehicle insurance not only provides traditional vehicle insurance coverages (e.g., comprehensive vehicle insurance), it should also cover the permanently fixed equipment and fittings inside.

Mobile caterers will have more extensive needs than traditional vehicle insurance and their business may be seasonal, so you may need a specialist insurer. This applies to mobile catering businesses such as:

  • Mobile catering vans
  • Coffee vans
  • Fish and chip vans
  • Burger vans
  • Catering trailers
  • Concession vans
  • Sandwich vans
  • Pizza trucks

How Much Does Catering Insurance Cost UK?

The average cost of public liability insurance for a catering business starts from around £50 for £2 million of cover. However, premiums depend on your cover limit, the business structure, where you live and other factors.

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

And if you need other types of cover beyond liability—for instance, employers' liability, commercial vehicle and equipment cover—these will add to your business insurance premiums. For more details on how these factors affect catering business insurances costs see our study on the average cost of catering insurance.

Overall, liability insurance for a catering business in the UK is relatively cheap compared to the overall average cost of business liability insurance across industries. These prices reflect the average of dozens of sample quotes we gathered for a test case to get a rough idea of prices (for each situation we took the average of the 3 cheapest quotes we found online); your premiums might vary significantly depending on your situation and the details of your application.

FAQs

Public liability/product liability insurance is essential for catering businesses because they deal with members of the public—even if not directly, then through their food. Public liability and product liability insurance protects you against claims of injury (e.g., food poisoning) or damage from third parties.

The cost of catering business insurance starts from as little as £50 a year (less than £5 a month) for a self-employed sole trader, but costs can quickly rise as you add on additional coverages such as employers' liability, personal accident cover, equipment cover, etc.

Catering Industry Statistics

  • Average annual pay of restaurant and catering establishment managers and proprietors: £26,772
  • Average annual pay of catering and bar managers: £19,887
  • Average annual pay of kitchen and catering assistants: £10,618
  • UK catering turnover estimate: £12.1 billion by 2022
  • Catering employment estimate: 311,000 people in 2020

Statistic Sources

Erin Yurday

Erin Yurday is the CEO, Co-founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.

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