If you run a catering business, you've probably lost sleep over what happens if your commercial kitchen floods the night before a 200-person wedding. Or if a guest at an event trips over your equipment and sues. Or if a fire destroys your $30,000 worth of commercial ovens and refrigeration units. Here's the good news: one insurance policy can handle all of these scenarios—and it'll probably cost you less than buying separate coverage for each risk.
A Business Owners Policy (BOP) is essentially a bundle deal for small business insurance. It combines general liability coverage, commercial property insurance, and business interruption coverage into one package. For catering companies, this means you're protected whether the damage happens to someone else's property (like spilling red wine on a client's carpet), your own equipment (like a kitchen fire), or your ability to operate (like a burst pipe that shuts you down for two weeks).
What a BOP Actually Covers for Catering Businesses
Think of a BOP as three insurance policies rolled into one. The general liability portion covers third-party claims—if a guest gets food poisoning or slips on your equipment setup, you're protected. Standard policies typically include $1 million per occurrence and $2 million total per year in liability limits. This is the same coverage you'd get from a standalone general liability policy, but it's bundled here with other protections.
The commercial property coverage is where things get interesting for caterers. This protects your kitchen equipment, serving supplies, food inventory, and even the building if you own it. Whether you're running operations from a commercial kitchen, a storefront, or a dedicated catering facility, your ovens, refrigerators, food warmers, chafing dishes, linens, and prep equipment are covered against fire, theft, vandalism, and certain natural disasters. Most policies start with around $5,000 in property coverage, but you'll likely want to increase this based on your actual equipment value.
Business interruption coverage is the part most catering business owners don't think about until they need it. If a covered event—like a kitchen fire or water damage—forces you to close temporarily, this coverage replaces your lost income and helps pay ongoing expenses like rent and employee wages while you're getting back on your feet. For a catering business where you might have events booked months in advance, this protection can literally save your business.
When a BOP Makes Sense for Your Catering Business
Not every catering business is a good fit for a BOP, and that's important to understand upfront. These policies are designed for small to mid-size businesses with fewer than 100 employees and less than $5 million in annual revenue. Some insurers set an even lower threshold at $1 million in revenue. If you're running a boutique catering operation or a growing mid-size company, you're probably in the sweet spot.
A BOP typically makes the most sense if you operate from a physical commercial kitchen or facility. The property coverage is a huge part of the value here, so if you've got tens of thousands of dollars in commercial cooking equipment, refrigeration, and serving supplies at a fixed location, bundling property and liability coverage saves money compared to buying them separately—usually around 10-15% in total premium costs.
Here's where it gets tricky: if your catering business is heavily focused on off-site staffed events—think full-service weddings, corporate events, or festivals where you're bringing staff and setting up complete service operations—some standard BOP programs won't cover you. Insurers view extensive off-site operations as higher risk. If that describes your business, you might need a specialized restaurant package policy instead. However, if you mostly operate from your kitchen and just drop off food occasionally, a standard BOP will likely work fine.
What's Not Covered (And What You'll Need to Add)
This is where a lot of catering business owners get surprised. A BOP doesn't cover everything, and there are some pretty significant gaps you'll need to fill. Workers' compensation insurance isn't included in a BOP, and if you have employees, it's legally required in almost every state. For catering businesses, workers' comp premiums can add significantly to your insurance costs since kitchen work involves injury risks from burns, cuts, slips, and lifting heavy equipment.
Commercial auto insurance is another critical gap. If you're driving a catering van loaded with food and equipment to events, your personal auto policy won't cover business use. You need commercial auto coverage for your delivery vehicles. This is separate from your BOP and typically costs caterers anywhere from $100 to $300 per month depending on the number of vehicles, drivers, and coverage limits.
Professional liability (also called errors and omissions insurance) isn't part of a standard BOP either. This covers claims related to your professional services—like if you promise a gluten-free menu but accidentally serve something with gluten, causing harm to a guest with celiac disease. While general liability might cover bodily injury from food, professional liability covers the failure to deliver services as promised. Many catering businesses add this coverage, especially if they work with clients who have specific dietary restrictions or allergies.
Some catering businesses also need liquor liability coverage if they serve alcohol at events, and cyber liability insurance if they store customer credit card information or personal data. Neither of these is included in a BOP. The good news is that many insurers offer package deals that bundle BOP with these additional coverages at a discount. A complete catering insurance bundle with BOP, workers' comp, and professional liability averages around $252 per month or $3,027 annually.
What Actually Affects Your BOP Cost
For a small catering business with two employees, the average BOP runs about $99 per month or $1,192 per year. But that's just an average—your actual cost depends on several factors. The type of events you cater matters significantly. High-risk venues like outdoor festivals, large corporate events, or venues with challenging setups typically mean higher premiums. Insurers also look at your claims history; if you've filed multiple claims in the past, expect to pay more.
Your location plays a bigger role than you might think. BOP costs vary dramatically by state, ranging from $84 per month in Maine to $115 in Nevada for identical coverage. California averages $108 monthly, while New York runs $113. These geographic differences can add up to hundreds of dollars annually, which is why it's worth shopping around with insurers who understand your state's market.
The value of your equipment and inventory directly impacts your premium. If you have $100,000 in specialized commercial kitchen equipment versus $20,000, you'll pay more for property coverage. Your staff size matters too—more employees generally means higher premiums since there's more exposure for liability claims. Even your credit history can affect rates with some insurers, though this varies by state and company.
How to Get the Right Coverage
Before you talk to insurance agents, take inventory of your equipment and estimate its replacement value. This helps you determine how much property coverage you actually need. Make a list of your typical events, venues, and any high-risk activities—insurers will ask about this, and being prepared speeds up the quoting process.
Get quotes from at least three insurers. Some specialize in food service businesses and may offer better rates or more appropriate coverage for catering operations than general business insurers. Ask specifically whether they cover off-site events and what restrictions apply. Make sure you understand what's excluded from the policy—standard BOPs often exclude floods, earthquakes, and certain types of water damage, which you might need to cover separately.
Consider whether a BOP alone is enough or if you need a comprehensive package. If you have employees, vehicles, or serve alcohol, you'll definitely need additional coverage. Many insurers can bundle everything together, often at a discount compared to buying each policy separately. The investment in proper coverage is worth it—one lawsuit from a serious injury at an event, or one major kitchen fire, could cost far more than years of insurance premiums.
