Starting a business is always a risk, but it can be especially risky for private chefs. Unlike restaurant owners, private chefs don’t have the safety net of an established business to fall back on if things go wrong.
That’s why it’s essential to have adequate business insurance in place before you start cooking for clients. Here are a few things to keep in mind when shopping for business insurance as a private chef.
Private Chef Business Insurance Policy Options & Cost
The four most common types of insurance for private chef businesses are general liability, commercial property, workers’ compensation, and business income.
- General liability insurance protects you from lawsuits arising from injuries or property damage that occurs as a result of your business activities. General liability insurance can also help protect your private chef business’ assets in the event of a lawsuit. Average costs are $500-$700 per year for a $1 million policy.
- Commercial property insurance can help reimburse you for lost or damaged property caused by fire, theft, or other covered events. Typical costs are $500-$700 per year for a $10,000 policy.
- Workers’ compensation insurance helps private chef businesses cover the costs of employee injuries or illnesses. This type of insurance can help businesses pay for medical expenses, rehabilitation costs, and other related expenses. Workers’ compensation insurance is required in all states except Texas. Workers’ compensation insurance typically costs between 1% to 1.5% of your total payroll costs.
- Business income insurance is sometimes called business interruption insurance or business continuity insurance. This insurance helps businesses recover from certain losses caused by events such as property damage, theft, or business interruption. This type of insurance can help businesses cover the costs of not being able to operate for a while. It can also help businesses pay for expenses such as employee salaries, rent, and other ongoing costs.
Average costs are $500-$700 per year for a $10,000 policy.
Other types of business insurance to consider based on the specifics of your private chef business include:
- Product liability insurance helps businesses protect themselves from lawsuits that may arise due to products that they sell. Average costs are $500-$700 per year for a $1 million policy.
- Professional liability insurance, also known as Errors and Omissions (E&O) insurance, helps professionals protect themselves from lawsuits. Average costs are $200-$400 per year for a $1 million policy.
- Employment practices liability insurance, also known as EPLI, helps private chef businesses protect themselves from lawsuits that may arise from the way they employ their staff.
- Cyber liability insurance protects you from lawsuits that may arise from a data breach or other cyber incident.
- Business identity insurance protects your business from theft or misuse of your company name or logo.
- Commercial auto insurance and commercial fleet insurance protect you from lawsuits that may arise from accidents involving employees while driving for work.
- Key person insurance or key man insurance protects your private chef business from losses that may arise from the death or illness of a key employee,
- Equipment breakdown insurance can help pay for the cost of repairing or replacing damaged equipment.
While this list of insurance options covers most private chef businesses, you may be required to purchase additional coverage depending on the specific nature of your private chef business. It is essential to speak with an insurance company to determine which policies are right for your business.
The cost of business insurance will vary depending on the type and amount of coverage you purchase. However, business owners can expect to pay a few hundred dollars per year for general liability insurance.
How Much Insurance Should a Private Chef Business Have?
This is a difficult question to answer, as the amount of insurance you need will vary depending on the type of products/services you offer and the size of your company. That being said, most insurance experts recommend that business owners purchase enough coverage to protect their assets in the event of a lawsuit.
When shopping for liability insurance, be sure to ask your insurance company about the coverage limits and supplemental coverage options available.
In summary, private chef businesses should purchase enough insurance to protect their assets in the event of a lawsuit. Speak with your insurance company to determine which types and amounts of coverage are suitable for your business.