“Many insurance policies written for restaurants have a Designated Premises Endorsement on the policy that generally does not provide you coverage if you go off site to cater an event.” says Steve DeMaster from
St. Louis based Crane Insurance Agency. “As part of an insurance review always makes sure this endorsement is thrown out and not a part of the policy.”
If you do decide you want to cater that off site event, it's important to be sure that your insurance coverage protects your staff members, clients, products and equipment when in transit and at other locations.
If catering is new to your operation, make a call your agent and have it in writing that you are doing some off site catering and want any riders added to your policy to make sure you are covered.
Off site catering comes with a separate set of risks in addition to those inherent in operating any food service business.
*Be sure that your property insurance policy covers others' property in your care, custody or control. If, for example, your equipment or one of your chafing dishes were to cause a fire at your customer’s residence, your policy should help cover the damage.
*You also need to be sure that your own business property, including catering equipment, is covered by property insurance at any location where your business may operate, as well as in storage or transit.
*Your risk of being sued over an incident at a separate location is equal to or greater than your risk of a lawsuit at your place of business. Because your employees may be operating in an unfamiliar environment, the risk of spills, trips, falls and burns are increased. For example, if one of your employees spills water at an event, one of the attendees could fall and be injured, resulting in a liability suit against your business. General liability and workman’s compensation insurance protects your business against such lawsuits, wherever they may arise.
*You must also make sure your workman’s compensations policy is in effect especially if one of your staff has a serious accident off site. If you do not have workman’s compensation coverage on your policy your client may end up having the medical claim on their policy and the customer in unlikely to ever call you back for catering.
*According to the Centers for Disease Control and Prevention, food poisoning is the most frequently reported restaurant injury. Food poisoning is a catchall phrase for various types of bacterial infections. Because of the delay between food preparation and when it is served, the risk of liability exposure increases with catering and delivery. Failing to maintain proper food temperatures in transit or on a buffet could result in food poisoning. General liability insurance protects your business against lawsuits associated with food poisoning.
*If your client asks you to serve or provide adult beverages you are at the same risk as any restaurant for liquor liability exposures. Even if the host provides the alcohol and your staff serves it, you and the host could be encumbered with a lawsuit if a guest is allowed to drink and drive and has a car accident. DeMaster recommends that if the host is very concerned about liabilities, the host can take out an event only policy to protect themselves.
*Whether you use your company owned vehicles or you have a staff member make a delivery in their personal vehicles, Steve DeMaster also recommends having a Hired Non Owned policy as part of your commercial auto insurance policy that covers any potential liability or damages to others' vehicles.
It’s great to incorporate catering into your restaurant business plan. Catering is a natural extension of owning a restaurant and it makes sense to build your customer base beyond your dining room by bringing your food to your customers. But, make sure you have the right insurance coverage so you don’t lose your shirt doing so.
If you are looking for insights on how to increase your sales by adding a catering division to your restaurant business plan, Steven Becker Hospitality Consulting can help you. Call for a free initial consultation and I will get you started the right way.