The type of catering company you have will determine what kinds of insurance coverage you need. All caterers need a standard general liability policy; professional liability policies are used in other industries, but not for catering. The standard general liability policy will have a “products” and “completed operations” clause, which will provide coverage for your food products and catering jobs.

The policy should also have “bodily injury” and “property damage” clauses to protect you if someone becomes ill or if the venue gets damaged. “Personal injury” and “advertising injury” clauses should be included to protect you if you get into a scuffle with a client or are sued by someone who says you made a false claim in advertising or marketing your services.

General Liability

Unfortunately, it's not easy for a new business owner to find an insurer who will write a policy for him. Most insurers require that a business be up and profitably running for at least three years. The amount of coverage will be based on the business's annual receipts. Generally, start-ups aim to get a policy that will provide $1 million of coverage for each occurrence.

The excess liability companies are the firms that are the likeliest to write these types of policies, since they're in the business of taking on greater risk. Companies like AIG, United States Liability, and the Hartford write these policies. It's easier for a catering firm to get insurance coverage if it doesn't directly serve alcohol, since there are fewer liability issues involved.

Workers' Compensation Insurance

If you employ other workers, you'll need to have workers' compensation insurance. Every state's regulations vary. In some states you need to have a minimum of three full-time employees in order to be mandated to carry this type of insurance. Workers' compensation insurance covers you in the event that one of your employees is injured on the job.