Catering insurance can cover your business for many of the unique risks associated with preparing and serving food and drink to the public. On top of this, your catering insurance policy can cover you for some of the risks faced by all businesses in all sectors, such as loss or theft of your equipment.
You do have a legal obligation to get some forms of cover. But beyond this, catering insurance is entirely optional. However, in this post we will outline what might happen if you do not have catering insurance, to highlight how dedicated cover is something no caterer should do without.
What Insurance Do Caterers Need By Law?
Employer’s liability insurance is a legal obligation for any businesses that employ staff. This will cover any compensation payments that may arise should any of your employees sustain any illnesses or injuries while working for you.
Even if you just employ your friends or family, you still need to get employer’s liability insurance. Failure to do so could result in hefty fines from the Health and Safety Executive (HSE) – this can be up to £2,500 per day for each day that your business goes without adequate cover.
Buildings insurance may also be required for your business premises as part of your mortgage or leasing agreement. This can cover the costs of repairs if your premises are ever damaged by fire, flood, theft, vandalism, or other events.
Mobile catering businesses, such as a catering van, you will also need to get at least third party insurance for every vehicle you use as part of your business.
What Happens If I Do Not Have Catering Insurance?
Apart from the forms of cover we listed above, you have no legal obligation to get any kind of catering insurance. However, without adequate cover, even the smallest setback could quickly spiral into a huge issue with the potential to sink your business entirely.
Think about the following situations:
- Loss of stock – A power cut in the night could cause your fridges and freezers to fail. When you arrive at your premises in the morning, you find that all of your stock is ruined. You will not be able to trade that day, and you will have to order new stock before you can open again.
- Premises damage – A fire or a flood could cause significant damage to your business premises. If you have buildings insurance, you may be covered for repairs. But will not be able to trade again until the repairs are complete. How will you manage with the loss of income in the meantime?
- Equipment loss – A major piece of equipment is lost, damaged, or stolen. Could you get by without it? Would you be able to afford a replacement?
- Customer compensation – A customer gets food poisoning having eaten food prepared on your premises. If they take legal action against you, would you be able to afford the legal fees, and the possible compensation payments?
Catering Insurance Would Cover You For All of These Scenarios, and More
The above situations might seem unlikely, but they are the sort of things that could happen to any catering business. And unless you have adequate cover in place, any one of these scenarios would have the potential to ruin your business.
The following insurance products could give you total peace of mind that you would be covered for all of these situations, and more:
- Public and Product Liability Insurance – This can cover most accidents, injuries, and illnesses members of the public may sustain as a result of interacting with your business. This can include claims arising from cases of food poisoning or allergic reactions.
- Contents Insurance – This can cover for your cooking equipment and furnishings, along with your stock and your ingredients. In cases of loss, damage, or theft, your insurance can cover the costs of repairs or replacements.
- Business Interruption Insurance – If a fire, a flood, or a similar event means you are temporarily unable to trade, business interruption insurance can cover all of your overheads for as long as it takes things to get back to normal.
Get Specialist Catering Insurance From James Hallam
James Hallam is an independent Lloyd’s broker with access to a hand-picked selection of A-rated insurance providers.
We know that no two catering businesses are quite the same. This is why we take the time to get to know our clients, so that we can design a catering insurance package that truly meets your needs at a competitive price.