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You have finally reached the point where you are ready to open your bakery. You invested in all the latest equipment, you've hired wonderful employees, and you have customers eagerly awaiting the grand opening of your bakery. But as a new small business owner, you don't know where to state with business insurance for your bakery. Do you need to get general liability insurance? What about workers' compensation?

Baking fresh sweets, cakes, bread, and other scrumptious treats involve long hours and tireless dedication to details. While you're working hard to make sure that everything goes right in your bakery, you have to do what you can to mitigate what could go wrong. Let us help design the perfect business insurance coverage that fits the unique needs of your bakery.

How Much Does Bakery Insurance Cost?

Business insurance for bakeries varies depending on the company you choose to purchase the insurance policy through. An average cost for a business owners policy is $65–$79 monthly. If you choose to add on workers' compensation, business interruption insurance, product liability, and other coverage options it will increase the total cost. We recommend looking through the recommended coverage listed below and talk with an agent to see what your options are.

Types of Business Insurance for Bakers

Like baking, there are many ingredients that a business owner can use to create a great bakery insurance policy. These policies each work together to reduce risk and bring peace of mind to the business owner with the coverage provided. Let’s look at the basic requirements needed for a good solid foundation and then some additional options you can consider: 

General Liability Insurance: General liability insurance typically compensates the insured business owner for third-party claims of bodily injury or property damage. For example, if a customer suffers an allergic reaction to an ingredient in your baked goods or is scalded by cocoa or coffee you may be liable for their medical expenses. 

Commercial Property Insurance: Commercial property insurance provides coverage if your personal assets or small business are damaged by fire or natural disasters. Some policies provide coverage if property damage occurs from theft or vandalism as well.

Business Owner's Policy: A business owner's policy, also called a BOP, consists of policies and endorsements which are put together and sold as a bundle for specific industries. Usually, buying them as a package means you pay less for the business owner's policy than you would for the individual coverages. A typical bundle is general liability insurance and commercial property insurance.

Business Interruption Insurance: If your bakery is forced to close due to damage, food contamination, or catastrophic conditions, this insurance policy can help you pay for your losses. It can pay for lost wages and income and in some cases renting a different location to continue operating.

Workers’ Compensation: In most states, if a small business hires employees, you are required to get workers’ compensation insurance. It can cover lost wages, medical expenses, and lawsuits brought against you if an employee becomes ill or injured on the job. 

Commercial auto insurance: If your bakery makes deliveries or operates a food truck you'll need commercial auto to protect the vehicle in case of an accident.

Does your Bakery Need Product Liability Insurance?

For whatever reason, we are witnessing more and more recalls for food and ingredients which are suspected of containing foodborne illnesses. Unfortunately, even though you do not supply the ingredients when a consumer gets ill because of foodborne illnesses, their attorney will generally name everyone in the chain—from the farmer to the baker. General liability insurance typically compensates the insured business for third-party claims that resulted in bodily injury including illness, disease, or death.

However, general liability policies often contain exclusions which indicate that the insurer will not pay for injuries under specific circumstances. Given this fact, you will want to be cognizant of what those exclusions are. Often, foodborne illness can be an exclusion under these policies—which means you'll need to purchase product liability insurance. If your bakery items cause or are accused of causing foodborne illness, product liability covers associated costs such as medical expenses and monetary settlements when they are excluded from your general liability insurance.

Get a FREE Bakery Insurance Quote

Whether you're seeking home bakery insurance or bakery insurance for a commercial space, you need to make sure you're getting a comprehensive business insurance package. Insurance for home bakers can be completely different from insurance for bakery owners—so let our experts at CommercialInsurance.Net help you design the perfect bakery insurance for your business. Complete the form above and we will connect with you shortly!

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