Halacha requires covering the bread on the table while reciting Kiddush on Friday night. The Chayei Adam (Halachic work by Rabbi Avraham Danzig of Vilna, 1748-1820) [Klal 6, Din 13)writes that the bread should remain covered even after Kiddush, until one recites the Beracha of "Ha'motzi."
Two reasons have been given for this requirement. First, the covering of the bread serves to commemorate the double portion of manna that fell from the heavens each Friday during Benei Yisrael's sojourn in the wilderness. Before sending the manna, God would first cover the ground with a protective layer of dew, so that the manna would remain clean. Then, after the manna fell onto the layer of dew, God would cover it with another layer of dew for further protection. In commemoration, we cover the bread on Friday night both on bottom and on top, just as the manna was protected by two layers of dew. Therefore, besides the covering on top of the bread, one must ensure as well to have either a tablecloth or a breadboard underneath the bread.
Secondly, the bread is covered to spare it the "embarrassment" of losing the precedence it usually receives at a meal. Generally, one recites the Beracha over bread first, before any other Beracha, including the Beracha over wine. On Shabbat, however, one may not eat until he recites Kiddush, and thus we must first recite Kiddush before reciting the Beracha over the bread. We therefore cover the bread so it will not "see" that we first recite the Beracha over the wine, which might cause it a degree of embarrassment, so-to-speak.
The story is told of a man whose wife forgot to cover the bread on the table one Friday night. In the presence of their guests, the husband angrily and scornfully berated his wife for neglecting to fulfill this basic requirement. The guest commented to the host that one reason for covering the bread is to spare it the humiliation of seeing the wine receive its Beracha first. He noted the husband's inconsistency in so adamantly defending the "honor" of the bread, while having no qualms about humiliating his wife in front of his guests. If Halacha shows such sensitivity to the "honor" of a loaf of bread, how much more so must one exercise care with regard to the feelings and respect of other people.
Summary: On Friday night, one must cover the bread both on top and on bottom for the recitation of Kiddush, and the bread should remain covered until the recitation of the Beracha of "Ha'motzi." The same applies to the Kiddush in the day.
See Menuhat Ahava, Helek 1, page 140.
