I know that it's not an "ordinance" in my city but venues are starting to go that route and a new one cropped up last week who said "it's a new policy that we are following."
Most of the big name hotels here in town require it because it's written into their insurance policy (not all here follow it through and ask for it. They have adopted the don't ask/don't tell policy.). I know at least one of them is very good about letting you know each time they discuss your event.
In my area, some do, some don't. Some ask for proof of insurance, also.
Those that ask for proof keep it for liability purposes, and their own protection (and really mine, too). I do both cakes and catering, so the catering part is what they are mostly concerned with. I'm happy to give proof - it usually leads to more referrals!
I'm not aware that it's an ordinance that venues have to ask for it, but for their own protection, they should.
When providing Certificates of Insurance, though, be aware that a Cert of Liab is not the same as a copy of your insurance policy. My agent has to issue a Cert of Liab insurance that lists the venue as an add'l named insured. There is no fee to me for issuing these certificates. If you show a hotel just a copy of your insurance policy, that means squat to them ... they want to make sure that THEY are covered for any liability on your part.
I know of venues who absolutely will not allow Aunt Martha to make the cake unless she can show it was made in a licensed, commercial kitchen. I mentioned this during a speech I made a couple of weeks ago, and one person at the event told me she called her best friend right after the meeting ... friend is having reception at a large hotel in town and is using an unlicensed baker. So the Meeting-Person told Bride-Friend she better find out what the hotel's policy is if she wanted a cake at her wedding.
No, it's not an ordinance here in my area of MA either, but as others have said, I've noticed more venues are requiring it lately.
Before I was licensed I made family Wedding cakes, I was never asked, thank goodness. Of course that was years ago. I think with people being more "sue happy", more venues are making it their policy to protect themselves.
I have a Wedding cake coming up next weekend and they are requiring proof of license/insurance. I always call ahead to check, so that I'm prepared with my paperwork.
One venue around here will not allow any cakes to be brought in, even if it's from a licensed kitchen. They have their own baker that makes the cakes exclusively for them. I had a bride change her reception site because of that.
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