How To Start a Catering Business

(We’ll deliver the right coverage, you deliver the fancy food)
Christine Lacagnina Written by Christine Lacagnina
Christine Lacagnina
Written by Christine Lacagnina

Christine Lacagnina has written thousands of insurance-based articles for by authoring consumable, understandable content.

paul martin Reviewed by Paul Martin
paul martin
Reviewed by Paul Martin

Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.

Caterer serving a large buffet table full of delicious food.

It’s time to bring your delicious culinary creations out into the world, so you’re ready to open your own catering business. While that’s quite the exciting (and tasty) endeavor, crafting a successful catering business takes a little more than a menu full of delectable recipes and a stylish chef’s hat. In order to keep serving up the goodies for years to come, you’ll need to plan properly.

When the time comes to open up shop, having business insurance for your catering business is the key to maintaining smooth operations. All businesses come with risks (even the fun ones), so you’ll need to obtain protection during your preparation phase. Our independent insurance agents are here to help get you set up with the right coverage for your specific needs. But first, let’s talk about catering.

All About the Catering Industry

Top U.S. catering businesses ranked by revenue this past year

A quick look at a handful of the top-performing caterers in the US proves that this business can be lucrative. CulinArt Group pulled in an impressive $343.9 million in 2018, and their competitive runner-up, Wolfgang Puck Catering, earned $174.5 million. Obviously, Americans love food, and they’re more than willing to shell out their hard-earned cash for catering.

Catering services daypart sales share in the U.S this past year

People need caterers for every meal of the day at all kinds of events, but here’s a look at a breakdown of which mealtimes see the highest requests for caterers. Dinner makes up nearly half of the industry’s demand at 39%, with lunch coming in second place at 31%.

Revenue distribution of catering services in the U.S over the past recent years

Here’s a quick overview of where the money is in the catering industry. In the lead at $12.4 billion dollars is the delivery, QSR (quick-serve restaurants), retail and supermarket category, followed by independent catering companies at $8.3 billion.

Airline catering services are on the rise, too. Revenue in the airline catering services segment of the industry rose from $3.37 billion in 2013 to $5 billion in 2018.


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How To Start a Catering Business

Your passion for starting a new business is a great motivator, but it’s far from all you need to bring that dream to reality. Of course your vision will be specific and unique (as it should be), but we’ll take a look at some general steps to starting a catering business:

  • Step One: Planning. No successful business can begin without a solid plan—we’re willing to bet on that. First up, you’ll need to determine all kinds of stuff like your start-up 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 decide what kind of business you want to be (i.e., if you want to set up shop in a strip mall or work out of your own kitchen, whether you want to cater to sports events or weddings, etc.). Last, you’ll need to scout out a location, and actually purchase or rent said property, once you’ve found it.
  • Step Two: Legal stuff. 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 for making it legal by registering with the government. You’ll also need to register for taxes and obtain any required permits and licenses.
  • Step Three: Money stuff. This phase involves opening a business bank account so you can accurately monitor your business’s financial performance, and it will make your life a heck of a lot easier when it comes time to file your annual taxes. Then, it’s time to obtain your start-up costs and determine how much you’ll be charging customers and clients for any goods and services your business will offer.
  • Step Four: Define and build your brand. What will your business stand for? How do you want the world to perceive it? These are just a couple of questions you’ll answer in order to define your brand. A solid, unique branding of your business will help it stand out from the competition.  Once all the details have been figured out, it’s time to get to work building that brand. This generally involves designing business cards, building a website, and establishing a social media presence. If you’re clueless when it comes to Twitter or any of the other platforms, you can always hire (or beg) someone to take care of that aspect for you.
  • Step Five: Build your team. You’ve made all kinds of progress, and now it’s time to find people to actually do the work. Determine what kind of team you need, the different roles you need to fill and how many positions there are in each, then go about hiring your staff/employees/minions. You can advertise online, in your local newspaper, or go the old-school word-of-mouth route. Once you’ve got a solid team established, it’s time to get them trained.
  • Step Six: Iron out the details. For your catering business, this could involve purchasing necessary ingredients, ordering supplies needed for your kitchen, crafting your menu, designing eye-catching signage, perfecting your recipes and then sharing them with the appropriate staff, finding and establishing relationships with vendors, etc. Basically, any of the specifics needed to make your catering business come to life will fall into this step.
  • Step Seven: Get coverage. The final step, and perhaps the most important, is to obtain the proper coverage. You’ll need business insurance to protect not only your catering business, but also your employees—and yourself. Business insurance is the pièce de résistance that’ll keep you catering those tasty treats to eager customers for years to come.

What Is Catering Business Insurance?

Boiled down, catering business insurance is a tasty soufflé of an insurance package designed to meet the specific needs of catering business owners. All the coverage offered by a basic small business insurance plan, as well as policy options tailored for the unique needs of caterers, are rolled into one.

A catering business insurance package simplifies the process of obtaining all necessary coverages for caterers while eliminating confusion and stress. Basically, it’s the best way to go.

What Does Catering Business Insurance Cover?

A catering business insurance policy is typically the easiest option when it comes to knocking out your extensive list of coverage needs all together in one tidy package. These policies offer the basics of business insurance coverage, including most of the liability insurance you’ll need, plus specific coverages tailored to your unique niche.

Here are several catering business insurance coverage options:

  • General liability: This coverage protects you against property damage or injury claims made by a third party. 
  • Workers' compensation: If your employees become ill, get injured, or die from a work-related incident, this aspect of the insurance will cover the financial ramifications. Depending on the type of work being performed, this coverage is often mandatory in most states. 
  • Property insurance: Covers loss of or damage to your physical property, including your office space, and often the inventory in it. Protected mishaps include fires, storms, and more.
  • Commercial/business auto: Provides protection for any company vehicles against things like theft, vandalism, and damage from natural disasters.
  • Employment practices liability: Covers fees for lawyers and other financial ramifications if any of your employees are involved in harassment cases against coworkers or customers.
  • Boiler & machinery: Also known as "equipment insurance," it covers electric equipment in the building (e.g., AC units and boilers) that break down due to power surges, etc. Property insurance may cover this stuff, but not always.
  • Utility services: In the event that production is halted due to an extended power outage and food spoils as a result, this coverage will take care of the financial losses. This aspect of the insurance can also be applied to the replacement or repair of your products and machinery as well as income lost due to suspended operations.
  • Liquor liability: This coverage applies if your catering business will be serving alcohol. General liability will not protect you if your employees overserve a customer who ends up with a DUI or other alcohol-related charge.

Your catering business insurance package will be assembled by selecting the coverages that work for your unique business from a big list of available options. Coverage applies to everything from lost business revenue to potential legal or court fees and beyond.


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Who Needs Catering Business Insurance?

Whatever the size or spiciness scale 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:

  • Corporate catering
  • Buffet catering
  • Event catering
  • Airline catering
  • Wedding catering

  • Petite take-away buffet catering
  • Cocktail reception catering
  • Sit-down catering
  • Sports event catering

Catering business insurance will cover all aspects of your business, regardless of the specific type you own. It’s always important 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 Business Insurance Cost?

Truthfully, it depends. On quite a few things. A high-end wedding catering business in Seattle might pay $3,500 annually for combined liability coverage, workers’ comp and more. But for a  much simpler catering business with fewer employees and fewer clients in a small town, that number could be quite a bit smaller.

Of course, it’s hard to offer an average figure, since each catering business is unique. But really, it all depends on a number of factors, like:

  • The type of catering business: This includes more than just if you’re catering to Bar Mitzvahs or football games. The kind of equipment your catering business uses will affect the risk involved in operations. Obviously, more danger means more money for insurance.
  • The location of the catering business: Larger cities tend to have higher costs for insurance, but it goes beyond that. Depending on where you are in the country, your location may be subject to various weather-related risks. Catering businesses along the Atlantic Coast, for example, may have premiums up to 20% higher due to risk of hurricane damage.
  • The number of employees: The more you've got, the more workers' comp you’ll need. Simple as that.
  • How much business you generate: Premiums are calculated based on business projections for the upcoming year. If your workload doubles, so will your premium, most likely.

Top 5 Business Insurance Claims

From potential injuries to property damage and lawsuits, business insurance is definitely a must-have. In order to keep all operations running smoothly, you’ll need to consider not only the risks unique to your trade, but also those that apply to all kinds of businesses. Here’s a quick look at the most common business insurance claims across the board:

  • Theft/Burglary: Whether they’re after money, merchandise, your company vehicles or anything else, thieves and burglars commonly target businesses. Anything you have that could be stolen is worth protecting—before ever opening your doors to the public.
  • Weather-related damage: Wind and hailstorms create the type of weather damage most often reported by businesses across the map. Whether it’s shattered windows, broken signage, destroyed products or anything else, Mother Nature can wreak havoc when she gets angry. Plan for disasters before they happen, and secure coverage up front.
  • Fire damage: Another common and costly claim is fire damage. Be it destruction caused by natural wildfires or resulting from employee negligence (such as with a kitchen fire), these disasters can be devastating. Fire damage can result in lost property, inventory, and even revenue, especially if your business is forced to close. Also, fires are obviously a huge hazard for your workers and customers alike. Take as many proactive measures as possible, such as installing sprinkler systems and extinguishers.
  • Employee injury: Even the most well-trained employees run the risk of being injured on the job, regardless of the line of work they’re in. Employees may get injured while carrying out daily tasks, due to the negligence of a coworker, while making service deliveries, or in a myriad of other ways. Protecting your workers with workers’ comp is crucial, not to mention mandatory in most states.
  • Customer injury: Of course, your business’s customers are also at risk of injury while on your property. Slips and falls are some of the most commonly reported business insurance claims, but customers can also be injured due to unsafely stocked shelves, employee negligence, faulty products, and much more.

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Top 5 Business Insurance Discounts

Owners of businesses of every size, color, and flavor love scoring discounts however they can. And fortunately, there are some discounts out there to help obtain a significantly lower premium, like:

  • The safety discount: Insurance companies love working with clients who put safety first. Put practices in place to keep your employees, equipment, and physical office space as safe as possible, and you're likely to be rewarded by your insurance company. Installing sprinkler systems and burglar alarms are just a couple examples of easy ways to score this discount.
  • The quality discount: Establishing a track record of quality goods, services, and customer interactions will not only keep your business running strong, but also help reduce your insurance costs. Essentially, keeping your clients happy is the key to keeping your insurance company happy, and they just might slash your premium as a thank-you in return.
  • The low claims history discount: Along the same lines as maintaining a safe and efficient business, having a low claims record is another way to seriously please your insurance company—and over time they’ll probably reward you for it. Plus, if you ever need to switch insurance policies or companies, having a low or even squeaky-clean claims record will definitely help you land a lower premium.
  • The professionalism discount: Sometimes insurance companies send out inspectors to observe your business during a typical day of operation. If your equipment is clean and well-maintained, your employees are following necessary safety protocols, and your customers/clients seem happy, you’ll get a good report. A favorable evaluation could reward you with a reduced premium. 
  • The bundle discount: Purchasing multiple types of insurance with the same company is a tried and true way to save money, but so is purchasing specialty insurance packages. These packages, made up of multiple policies tailored to a specific kind of business, are designed to save you money—and just generally make life easier. And since they exist, you might as well take advantage.

How To Find the Best Catering Business Insurance

In order to get the protection you need (and deserve), you’ll want to work with a trusted expert. Independent insurance agents will not only know where to find the best coverage and price, but also help to make sense of the fine print.

Consider your business’s unique needs, then connect with an agent to help you take it from there. Have a list of your specific concerns and desires handy before you reach out, to help the process even smoother.

Compare Catering Business Insurance Quotes with an Independent Insurance Agent

We all know how valuable your time is, so why spend it doing all the hard work yourself? From business insurance packages to special add-on policies, our expert independent insurance agents will help you determine which types of coverage make the most sense for you and your new business. 

Our independent insurance agents stay on top of the insurance industry and all the latest discounts so you don’t have to. That means they’ll help find the right coverage at the right price for you.

They’re not just there at the beginning, either. If disaster strikes, your agent will be there to help walk you through the claims process and make sure you're getting the benefits you’re entitled to. Now that’s thinking ahead.

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