How to Start a Catering Business

Catering businesses serve a wide variety of customers and events, including weddings, anniversary parties, graduations, corporate events, and many more. Your job is to create, deliver, and set up meals. If you want to stay in business for the long term, you need to make sure that every event is a success. 

Here we provide a list of steps you can take to set up your catering business. Remember, once you're up and running, unexpected events can cause serious problems for your business. If someone is injured as a result of your business, or if one of your employees damages someone else’s property, you’d be responsible for compensating the injured party. And you’d be highly susceptible to a lawsuit.

For that and many other reasons, you need business insurance to provide a financial backup when things go wrong. With the right catering insurance, you can pay for damages and get on with running your business. 

A local independent insurance agent can help you get the coverage you need. 

How to Start a Catering Business

Starting a business of any kind can be intimidating if you're not familiar with the steps. Knowing a simple checklist of action steps for the best way to start a catering business can help streamline the process. Here's how to start a small catering business of your own in no time.

1. Plan your business: Determine your startup costs, target market, business name, the products and services you’ll offer, and how long it’ll take you to break even and start turning a profit. You’ll also need to find a location and rent or purchase your property.
2. Register your business: Next, you’ll decide what kind of business entity you want to be (e.g., LLC, partnership, etc.), and then go through the proper channels to make it legal by registering with the government. You’ll also need to register for taxes and obtain any required permits and licenses.
3. Finance your business: Now it's time to open a business bank account to monitor your business’s finances. Then, obtain your startup costs and determine how much you’ll charge for any goods and/or services your business will offer.
4. Advertise your business: Design business cards, build a website, and establish a social media presence. You can advertise your business by yourself, or hire someone who's a professional marketer.
5. Build your team: Now, determine what kind of team you need, what roles you need to fill, and how many people you need to hire. Next, start the hiring process. After you've secured your team, training can begin.
6. Order supplies: Purchase ingredients, order supplies for your kitchen, craft your menu, design signage, perfect your recipes, establish relationships with vendors, etc. This is the phase where you really make your catering business come to life.
7. Get coverage: What do you need to start a catering business? You’ll need business insurance to protect not only your catering business, but also your employees and yourself. An independent insurance agent can help you get your catering business all the coverage it needs.
8. Get licensed: You'll most likely need a general business license before you can start a catering business. This type of license is required no matter what kind of business you open in the US, often at the municipal or county level. To be certain of what kind of licenses you need to start a catering business in your area, check in with your local ordinances first. 

This checklist for starting a catering business can help simplify the process for you when you're ready to get things moving. 

What Is Catering Insurance?

Catering insurance is a specific type of business insurance that is designed to meet the unique needs of catering businesses. It is typically a package of several policies that cover property damage and lawsuits, allowing you to focus on running your business and serving your customers.

Most caterers need commercial property insurance and commercial liability insurance at a minimum. But not every risk you face is covered by these basic policies. You’ll likely need to purchase a variety of additional business insurance policies to make sure that your catering business is protected from the numerous property losses and claims of negligence that can arise as a result of your operations. 

What Does Catering Insurance Cover?

Catering insurance should cover the unique risks you face as a caterer. This includes physical damage to your property, as well as your responsibility to financially compensate any customers or members of the public who get injured on your property or as a result of buying something from you.

With a few commercial insurance policies, you can begin to build a comprehensive catering insurance program.  

Liability insurance for caterers

You need several liability insurance policies to protect your catering business from lawsuits. 

• Commercial general liability insurance: Offers broad coverage for all kinds of lawsuits that could arise if you or one of your employees causes an injury or damages someone else’s property. It pays for medical expenses, property repairs, and any legal costs you incur if you are sued. 
• Product liability insurance: Covers any negligence claims related to products you sell. It covers you if your food causes food poisoning or another illness or injury.
• Liquor liability insurance: Essential coverage if you sell, manufacture, serve, or distribute alcohol in any way. It covers claims resulting from serving alcohol at one of your events. 
• Commercial auto insurance: Protects your business if any vehicles you own are at fault for an auto accident. In addition, if you or any of your employees drive personal vehicles for business use — like picking up supplies or making occasional deliveries — you need hired and non-owned auto liability insurance.
• Employment practices liability coverage: Protects you if a current or former employee sues you for discriminatory employment practices. Employment-related claims are typically excluded from general liability policies. 

You'll need general liability insurance at a minimum, and your independent insurance agent can help you make sure you have any additional coverage you need. 

Property insurance for caterers

You need several property insurance policies to cover your lost, damaged, or destroyed commercial property, whether it’s part of your commercial kitchen space or equipment or materials that travel to and from events that you cater. 

• Commercial property insurance: Covers your permanent kitchen and office space as well as their contents, including all of your furniture, computers, office furniture and supplies, kitchen equipment, warming trays, serving equipment, ingredients, paper products, and more. It responds when there is a fire, storm, theft, or vandalism in your space, and your commercial property is damaged or destroyed.
• Business interruption coverage: Pays for loss of income and certain fixed expenses (e.g., rent, salaries, temporary relocation expenses, etc.) if your business must close due to a covered loss.
• Equipment breakdown coverage: Protects against costs associated with the sudden and accidental breakdown of machinery and equipment (e.g., ovens, refrigerators, etc.). Pays to repair or replace the equipment, as well as any business interruption costs that accompany it.
• Inland marine coverage: A form of property insurance that protects your business property from theft, loss, or damage while it is in transit to and from an event or while at an event. This coverage would help you repair or replace anything that you bring to or from a catering job. 
• Contamination and spoilage coverage: Pays for certain losses if food or ingredients are spoiled or contaminated due to a refrigeration breakdown, a utility interruption, or some other type of foreign substance contamination. If your local board of health or another agency forced you to close because of food contamination, your contamination and spoilage insurance may cover you for lost income during the shutdown period, as well as costs related to cleaning contaminated equipment, and disposing of and replacing spoiled food. 

You'll need basic commercial property insurance at a minimum, and your independent insurance agent can help you make sure you have any additional coverage you need. 

Workers' compensation insurance for caterers

Workers' compensation insurance is required for nearly all employers, but specific requirements vary by state. Workers' compensation insurance is essential for protecting your employees and your business from the costs of work-related illnesses and injuries. 

• Workers’ compensation insurance: Pays for medical bills and lost wages for employees who sustain cuts, burns, slip and fall injuries, repetitive motion injuries, or any other injuries or illnesses related to their catering work. 

Check with a local independent insurance agent to determine how your state's workers' compensation laws apply to your catering business. 

Save on Business Insurance

Our independent agents shop around to find you the best coverage.

Request a quote

Who Needs Catering Business Insurance?

Whatever the size of your catering business, if you’re serving food to the public and paying employees, you’ll need protection. Catering comes with a set of unique risks, both obvious and hidden, so coverage is essential if you do any of the following:

Catering insurance will cover all aspects of your business, regardless of the specific type you own. You need to have protection for your workers, your equipment, your inventory, and your property, but protection against potential lawsuits is also crucial. Caterers of all shapes and sizes can be sued, so don’t risk not having coverage.

How Much Does Catering Insurance Cost?

The cost of starting a catering business depends on many different factors, including the size and location of your business, how much insurance coverage you'll need, how many employees you need to hire, and more. The cost of catering insurance is one of the many budget items you need to keep in mind. Here's what can impact it the most: 

• The type of catering business: The kind of equipment your catering business uses affects the risk involved in operations. 
• The location of the catering business: Larger cities tend to have higher costs for insurance, but your location may also be subject to various weather-related risks (e.g., hurricanes), which can further increase costs.
• The number of employees: The more employees you need to hire, the more workers' compensation coverage you'll need, and the more you'll spend on payroll.
• How much business you generate: Insurance premiums are calculated based on business projections for the upcoming year. If your workload doubles, so will your premium, most likely.

An independent insurance agent can help you find exact quotes for the cost of business insurance you'll need to start your catering business.

Save on Business Insurance

Our independent agents shop around to find you the best coverage.

Request a quote

An Independent Insurance Agent Can Help You Find the Best Catering Insurance

No matter what kind of catering business you're starting, working together with an independent insurance agent is a great way to get set up with all the business insurance you need most. Independent insurance agents work hard to compare catering insurance coverage options and rates from multiple carriers for you and bring you the results all together in one convenient place.