Catering liability insurance is an essential part of any catering business. It protects you against legal claims arising out of injuries sustained by customers while at your event.
If you own a catering company, you should consider purchasing catering liability insurance. The reason being, if you are sued for damages, you could end up paying thousands of dollars in legal fees.
However, there are certain risks associated with catering liability insurance. If you are not careful, you could find yourself paying too much for coverage. In addition, you might not get the coverage you need.
This article will discuss the benefits of catering liability insurance and explain why you should purchase it.
Benefits Of Caterer’s Liability Insurance
The first benefit of having catering liability insurance is protecting you from lawsuits filed by injured parties. This means that you won’t have to pay money out-of-pocket when someone sues you because they were hurt on your premises.
You may be able to settle these cases without incurring large legal bills or even going to court. However, if you don’t have catering liability insurance, you’ll likely face high costs and possibly lose the case altogether.
Another advantage of catering liability insurance is that you can recover attorney’s fees incurred during the litigation. These expenses include filing fees, depositions, expert witness fees, etc.
You may want to buy additional coverages such as general public liability insurance, which covers property damage caused by third party events held at your venue.
This type of policy would help you recoup losses due to accidents involving patrons who attend your function. You can also add endorsements to cater liability policies so that you can collect medical payments for people who suffer an injury at your event.
How Much Does A Good Policy Cost?
Many factors determine how much a good catering liability insurance policy will cost. Some of them include:
- Location – Where do you plan to hold your event? Will it take place indoors or outdoors? What kind of food will you serve? How big is your space? Do you rent tables or chairs? Are you planning to hire caterers? All of these questions affect what types of coverages you require.
- Number of attendees – How many guests will come to your event? Is it a small gathering or a huge one?
- Type of event – Will it be formal or informal? Will it involve alcohol?
- Size of your staff – How many employees does your business employ?
- Amount of time spent preparing meals – How long did it take you to prepare each meal? Did you use outside vendors?
- Frequency of events – How often do you host similar functions?
- Past history of incidents – Have you had problems before? Has anyone been seriously injured at previous events?
These are just few cases of things that influence the price of catering liability insurance. It all depends upon where you live, the size of your operation, and other variables.
What Kind Of Coverage Do You Need?
Catering liability insurance comes in two forms: general commercial liability and errors & omissions. Both protect against claims made by customers who become ill after eating at your restaurant. They differ mainly in terms of their scope. For example, E&O only protects you against negligence, while CGL provides broader protections.
Commercial General Catering Liability insurance
A CGL policy usually includes coverage for bodily injuries, personal injury, advertising injury, property damage, and product liability. The most common form of CGL is called “occurrence” based. Occurrence refers to an accident that happens regardless of whether there was any intent to cause harm.
In addition to occurrence-based coverage, CGL policies offer broad exclusions that exclude certain risks. Broad exclusionary clauses protect businesses from lawsuits brought by individuals whose damages exceed $1 million. This means that if someone sues you because they were hurt on your premises, your insurer won’t have to pay out more than $1 million even though your company might be liable for millions of dollars.
Errors And Omission
An E&O policy offers limited protection compared with a CGL policy. However, this doesn’t mean that it isn’t worth buying. In fact, it may make sense to buy an E&O policy instead of a CGL policy when you want to limit your exposure to specific liabilities. If you’re concerned about being sued over something like sexual harassment, then purchasing an E&O policy could save you money.
The main difference between CGL and E&O is how much risk the insured assumes. A CGL policy covers almost everything except intentional acts. An E&O policy limits its coverage to negligent acts committed during employment.
How Much Does Commercial Liability Cover?
If you own a restaurant, the chances are good that you need both kinds of catering insurance. As mentioned above, CGLs can cost anywhere from $100-$500 per year, depending on the amount of coverage you purchase. On average, however, restaurants spend around $200 annually on these types of coverages.
E&Os typically run less expensively but still come with limitations. Depending on what kind of foodservice establishment you operate, you’ll probably find yourself spending somewhere between $50-$150 per year.
When To Buy Catering Liability insurance
There’s no one right answer as far as when to get your first policy. Some people wait until they start hiring new workers or expanding operations. Others prefer to do so before opening day. Still, others think it makes sense to buy a policy once every three years. Whatever works best for you will count on many factors, including your business model, location, industry, etc.
It also helps to know which type of policy you should choose. While CGLs tend to be cheaper, E&Os often include better benefits. So, if you plan to hire employees soon, consider getting an E&O policy. Otherwise, go ahead and pick up a CGL.
What Kind Of Coverage Do You Need For Restaurant Operations?
Catering Liability Insurance protects against claims made due to:
- Food poisoning
- Bacterial contamination
- Salmonella
- Mold growth
- Insect infestation
- Other health hazards
- Accidents involving equipment
- Personal injury caused by negligence, and many more.
The bottom line, catering liability insurance provides a wide range of protections that help keep your business running smoothly. It’s essential to note that not all companies offer catering liability insurance. Make sure yours does!
For more details, you can visit www.insuranks.com. It will give you complete information regarding commercial general liability insurance.
