Like all types of insurance, the cost of catering insurance depends on a wide range of factors.
Some of these factors are general factors that affect the cost of virtually every type of insurance. Some of them are specific to certain types of catering insurance.
Essentially, the cost of your catering insurance will come down to:
- You and your business
- What sort of catering you’re doing
- How much catering you’re doing
- How much insurance you require
You & your business
Your insurers will want to know what chance there is of them having to pay a claim, so your history and the history of your business is important. Although your history isn’t a guarantee that your insurers won’t have to pay a claim, it tends to be a good indicator of how likely it is that a claim will occur.
A new business with no history will pay more than an established business. Similarly, an established business that has been trading for a number of years without having to make an insurance claim will pay less than an established business that had made insurance claims in the past.
It’s not only your previous claims history that matters. If you have been to catering college and have catering qualifications, your insurers will view you as a better risk and may charge a lower premium. If you have a criminal record you are likely to have to pay more for your insurance, even if your convictions weren’t catering related. Some insurers will also take your credit rating into account when calculating your insurance premium.
What sort of catering you’re doing
The sort of catering you’re doing doesn’t just affect the likelihood that an insurance claim will arise. It also affects the potential size of any insurance claim. If you’re doing the catering for big-budget film locations a food poisoning incident would cost considerably more to deal with than a similar incident at a local village fête.
Given this, the sort of catering that you’re doing is another factor that your insurers will take into account when they’re calculating your insurance premium.
How much catering you’re doing
The majority of insurance claims made by caterers are public liability insurance and products liability insurance claims. This type of insurance covers compensation claims made against you by members of the public.
If you’re doing more catering you’re coming into contact with members of the public more frequently and as such, the chance of a compensation claim being made against you is higher. Public and products liability insurance premiums are generally based on the annual turnover of your business to reflect this.
How much insurance you require
How much insurance you require affects how much your insurance will cost in two ways.
First, it affects the chance that you will make a claim because, if you are covered against more eventualities, you have more opportunities to make a claim in the event of a loss.
As an example, if you have public and products liability insurance, you’re covered if a compensation claim is made against you, but you’re only covered if the compensation claim involves an injury or property damage. You’re not covered if the compensation claim involves purely economic losses.
You can address this by adding a financial loss cover extension to your public and products liability insurance policy. However, although this means that you have more protection it also means that you will pay slightly more for your insurance.
Second, it affects the potential cost of any claim that arises. Selecting a higher indemnity limit for your liability insurance will result in higher premiums. Similarly, insuring a larger amount of property under your property insurance will mean your insurance premium is higher. However, you should insure for the full value of your property because if you are underinsured in the event of a property insurance claim you could be penalised.