You're juggling enough as a catering business owner—menu planning, staffing events, managing client expectations. The last thing you want is to decode insurance jargon. But here's the thing: choosing between a Business Owner's Policy (BOP) and standalone policies isn't just about saving money. It's about making sure you're actually protected when someone trips over your chafing dish setup or a kitchen fire destroys your equipment.
Most catering businesses fall into one of two camps: small operations doing simple food drop-offs, or full-service caterers running staffed events with rentals, bar service, and complex setups. Your insurance needs are completely different depending on which camp you're in. Let's break down when a BOP makes sense and when you need to go the standalone route.
What's Actually in a BOP?
A Business Owner's Policy isn't some mystery product—it's just three essential coverages bundled together. You get general liability insurance (protects you if someone gets hurt or their property gets damaged), commercial property insurance (covers your equipment, inventory, and business property), and business interruption insurance (replaces lost income if you have to shut down temporarily after a covered loss).
For catering businesses, that business interruption piece is huge. If a fire damages your commercial kitchen, you're not just out the cost of replacing ovens and refrigerators—you're also losing every catered event you had to cancel while you rebuild. A BOP covers both the equipment replacement and the lost revenue. Standalone general liability? It covers neither.
In 2026, the average BOP for catering businesses costs $99 per month or $1,192 annually. That typically includes $1 million per occurrence and $2 million aggregate liability limits, plus property coverage up to $5,000 (though you'll want higher limits if you have significant equipment). Compare that to buying general liability alone at $89 monthly—you're only spending $10 more per month to add property and business interruption coverage. The math makes sense for most caterers.
Who Actually Qualifies for a BOP?
Here's where things get tricky for catering businesses. Insurance carriers generally limit BOPs to businesses with fewer than 100 employees, under $5 million in annual revenue, and—here's the kicker—"low-risk operations." For caterers, that low-risk designation usually means you're doing simple drop-off catering that's incidental to another operation, like a restaurant that occasionally delivers food to corporate events.
The moment your catering involves staffed off-site events—where your employees are setting up, serving, and breaking down—many insurers consider you too high-risk for a standard BOP. Why? Because you're working in unfamiliar locations, dealing with rental equipment, potentially serving alcohol, and facing exposure at venues you don't control. That's a completely different risk profile than dropping off sandwich platters.
If you're running a dedicated catering company with a commercial kitchen, multiple employees, and you're regularly staffing weddings and corporate events, you probably won't qualify for a basic BOP. You'll need either a specialized restaurant package policy or separate standalone coverages that can handle your specific exposures.
The Real Cost Comparison
Let's talk numbers. If you buy policies separately, you're looking at approximately $89 monthly for general liability and additional costs for commercial property insurance. Add business interruption coverage, and you're easily exceeding $120-140 per month. A BOP packages all three for around $99 monthly—that's a 10-20% savings, or roughly $194-806 annually depending on your coverage limits.
But here's what nobody tells you: those standalone policies might seem more expensive upfront, but they offer something BOPs can't—customization. Need $5 million in liability coverage because you're catering a 500-person wedding at a luxury venue? Good luck finding that in a standard BOP. Need inland marine coverage for your $50,000 worth of mobile equipment? You're adding endorsements to a BOP or buying standalone policies anyway.
The sweet spot for BOP savings is small catering operations with modest equipment values, standard liability needs, and straightforward operations. Once you start requiring higher limits, additional endorsements, or specialized coverages, the BOP's cost advantage shrinks fast.
When You Need to Go Standalone
There are clear scenarios where standalone policies make more sense than forcing yourself into a BOP that doesn't quite fit. If you're operating staffed off-site events as your primary business model, most carriers will push you toward a commercial package policy or standalone coverages from the start. These policies are built for higher-risk food service operations and can accommodate the exposures you actually face.
You'll also need standalone policies if your business exceeds the BOP eligibility thresholds—more than 100 employees or over $5 million in revenue. At that scale, you're no longer a "small business" in the eyes of insurance carriers, and you need coverage that reflects your actual size and complexity. A commercial package policy gives you the flexibility to mix and match coverages, adjust limits independently, and add specialized protections like liquor liability or hired and non-owned auto coverage.
Another red flag: if you're constantly hitting the coverage limits on a BOP or needing to add endorsements for every other event, you've outgrown the package. Standalone policies let you buy exactly what you need without paying for coverage you don't use or struggling to fit unique exposures into a standardized package.
When to Make the Switch
Most catering businesses don't start out needing complex insurance. You might begin with drop-off catering from your restaurant kitchen, and a BOP makes perfect sense. But as you grow—adding staff, investing in equipment, booking larger events—your risk profile changes. The question isn't if you'll outgrow a BOP, but when.
Watch for these signals: you're regularly declining events because they require higher liability limits than your BOP provides. Your equipment value exceeds the property coverage limits. You've added bar service or alcohol service to your offerings. You're booking destination events or high-profile clients with strict insurance requirements. Any of these scenarios means it's time to talk to your insurance agent about transitioning to standalone or package policies.
The good news? You can often keep some coverages bundled while splitting out others. Maybe you maintain general liability and property in a package but add standalone liquor liability and professional liability policies. Work with an agent who specializes in food service businesses—they'll help you structure coverage that fits your actual operations without paying for redundant protection.
How to Get Started
Start by honestly assessing your current operation. Are you doing simple drop-off catering or running full-service staffed events? Do you work in a single commercial kitchen or operate mobile food service? What's your annual revenue and employee count? These answers determine whether you even qualify for a BOP.
Next, inventory your actual exposures. Calculate the replacement value of your equipment, vehicles, and inventory. Review your event contracts to see what liability limits clients require. Consider what would happen if you had to shut down for two months after a covered loss—how much revenue would you lose? These numbers tell you if standard BOP limits are sufficient or if you need higher coverage.
Finally, get quotes for both approaches. Don't just compare premiums—look at coverage limits, exclusions, deductibles, and how easy it is to adjust coverage as your business grows. A BOP that saves you $50 a month isn't a deal if it doesn't actually protect your business. And remember, you can always start with a BOP and transition to standalone policies as you grow. Your insurance should evolve with your business, not hold it back.
