Whether it’s a wedding, a convention, a high school prom, a concert, or a corporate event, successful events depend on the work of many different people. Businesses tied to the event industry are, unquestionably, among the businesses hit hardest by the coronavirus pandemic and catering companies are no exception.
One thing small, private events and major events have in common is that the people attending them will want food to be there. But when restrictions on group sizes went into effect and resulted in countless events being cancelled, postponed, or moved online, caterers, in turn, lost a tremendous amount of jobs with no end in sight.
How COVID-19 Impacted Catering Companies
As the pandemic started to grow in the United States, many caterers heard from clients who needed to make changes to their contracted services, whether it was to accommodate a smaller number of attendees or to change from a buffet service to individual boxed meals. But when cancellations became necessary, those cancellations came in fast and often at the last minute, giving caterers little time to find other ways to make up for that lost business.
Catering companies of all sizes have been feeling the pandemic’s effects. Some larger companies have contracts to provide food at places like stadiums, convention centers, and entertainment venues, so they’ve been hit hard by the cancellation of things like big conventions, concerts, and sporting events. Other companies have been seeing their losses come from cancellations of smaller events like wedding receptions, proms, and graduation parties. Since group limitations also apply to funerals, there’s even been less of a need for food at funeral-related events because so few people have been able to get together.
Outside of special events, many catering companies also saw a decline in business from nearby offices being closed. One thing many companies like to do is organize catered lunches for their employees to enjoy. But with so many people working from home, there simply haven’t been any company lunches to cater.
Some companies that provide catering services also have a dine-in restaurant, which gave them one option to keep some business going during the pandemic. Even some companies without dining rooms started offering things like meal kits or curbside pickup or delivery of pre-made meals. But even with those options, the loss of so many catering jobs often meant losing a substantial amount of their revenue for the year.
Business Interruption Insurance for Caterers
Even though most catering businesses have never found themselves facing so many cancellations all at once, they know how costly the loss of just one job can be. Unfortunately, there are many different situations that can force businesses to shut down that are completely beyond their control. For example, a damage from a storm or fire could make a building unsafe for employees to work in. Or a power outage could make it impossible for a catering company to operate.
To protect themselves in these types of situations, many business owners purchase insurance policies that include business interruption coverage. These types of coverage are both intended to cover monetary losses a business might encounter during a temporary closure, such as employee payroll, lost revenue, and lease/mortgage payments. If a business could resume operations at a different location, it would also help with relocation expenses. Civil authority insurance is very similar to business interruption insurance, but is specifically intended to cover losses if a business is forced to close because of a government order.
Because of the pandemic, many business owners have been making claims for business interruption and civil authority insurance benefits, only to have their insurers deny their claim. Sometimes, these claims have been denied without proper review first. Many business owners have even said that their insurers have discouraged them from even trying to make a claim in the first place.
Help for California Catering Companies
Remember, insurance carriers have a vested interest in paying out as little money as possible and with so many claims coming in, they’re eager to deny as many business interruption claims as possible. Don’t let them deny them the benefits you’re entitled to. Whether you’ve already made a claim and been denied or are in the process of getting ready to make a claim, we can help.
The team at The Wallace Firm is now working with California business owners to help them with their business interruption/civil authority insurance claims. Dealing with insurance companies can be very intimidating, but we have experience taking on insurers and holding them accountable. Let us help with your claim so that you can focus on your business. Contact us today to get started.