If you enjoy baking bread, cookies, cakes, pastries, and other baked goodies, then you may have already started your own bakery! Perhaps, you’re a home baker that has been selling homemade cakes and candies to your friends and family for years from home and you’re finally ready to open up your own baking business. Or maybe, you’re just interested in opening your own bakery in town or from home, as the COVID-19 pandemic made more and more people start their own home businesses.
Bakery insurance and home baking business insurance are very similar to insuring other small businesses such as restaurants and caterers. Although it may seem trivial or unnecessary, purchasing business insurance for home bakers or a regular bakery is an essential part of starting and owning your business. Not only is it the responsible thing for business owners to do, but it may also save you a lot of money down the road if any claims or incidents out of your control occur and involve unexpected expenses.
In this article, we’ll discuss bakery insurance cost, baking from home insurance, how to insure a home bakery vs. how to insure a restaurant-style bakery, bakery insurance requirements, and show you the differences between the various bakery insurance policy choices. Let’s deep-dive!
Different Types Of Business Insurance for Your Bakery
This section will discuss the different types of commercial insurance that you’ll be able to select for your bakery.
Public Liability Insurance for Home Bakers & Regular Bakery
Consider instances where delivery men are delivering stocks to your bakery business and then one of them suddenly slips and falls. The injured worker might file a claim against your business. As a result, you’ll be forced to use business funds to cover treatment and compensation.
It’s smart if you decide to get public liability insurance. Public liability insurance covers costs if third parties file a personal injury claim or property damage claim against your bakery business. With this insurance policy, you can pay settlements, attorney fees, and other legal costs.
Bakery General Liability Insurance
| CoverWallet | NEXT (Best) | Thimble | Hiscox | |
|---|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 | $300,000 |
| Aggregate limit | $2,000,000 | $1,000,000/$2,000,000 | $1,000,000/$2,000,000 | $300,000 |
| Products and completed operations aggregate limit | $2,000,000 | $1,000,000 | $1,000,000 | $300,000 |
| Advertising injury coverage aggregate limit | $1,000,000 | $1,000,000 | $1,000,000 | $300,000 |
| Tenant’s legal liability coverage limit | $1,000,000 | $100,000 | $5,000 | $100,000 |
| Waiver of subrogation included? | Yes | No | Included | Can be included |
| Hired/non-owned auto liability coverage included? | Yes | No | Excluded | Can be included |
| Equipment breakdown floater included? | No | Yes | Yes | Can be included |
| Can you get a certificate of insurance online? | Yes | Yes | Yes | Yes |
| Name additional insureds? | Yes | Yes | Yes | Yes |
| Deductible | $0 | $0 | $0 | $0 |
Public liability insurance offers protection – but not comprehensively. And so, if you want something better, consider getting general liability insurance. Use the table above to compare the general liability insurance of insurance companies that cover bakeries.
Just like public liability insurance, general liability insurance protects you against personal injury claims and property damage claims. However, general liability is more comprehensive because it has optional policies you can purchase. Such optional policies are:
- Product liability insurance
- Advertising injury coverage
- Rented premises liability coverage
You might sell spoiled pastries and make customers sick. This means a lot of trouble as claims resulting from food poisoning incidents are very expensive. To cover defense costs and settlements, consider getting product liability insurance. Aside from food poisoning claims, this optional coverage in general liability insurance also covers claims third parties filed because:
- You failed to follow safe food preparation protocols
- Your bakery’s products cause property damage to customers
Someone might accuse your bakery of committing slander, libel, copyright infringement, and other types of reputational harm. Claims arising from reputational harm are also costly. That’s why consider getting advertising injury coverage that covers defense costs and settlement to aggrieved parties.
If you’re running a bakery business that’s renting a commercial space, consider getting rented premises liability coverage. Understand that any damage to a rented building falls on your shoulder, and the landlord can request payments from you. General liability insurance’s rented premises liability coverage will pay the landlord on your behalf.
Baker’s Commercial Property Insurance
| CoverWallet | NEXT (Best) | Thimble | Hiscox | |
|---|---|---|---|---|
| Building coverage limit (minimum) | $50,000 | $260,000 | $25,000/$500,000 | $25,000 |
| Contents coverage limit (minimum) | $50,000 | $22,000 | $25,000/$500,000 | $25,000 |
| Outdoor signs | Excluded | $2,500 | Excluded | Excluded |
| Accounts receivable | Excluded | Excluded | $5,000/10,000 | Included |
| Money and securities | Excluded | $2,500 | $1,000 | Included |
| Lock and keys | Excluded | $2,500 | Excluded | Excluded |
| Business interruption floater | Excluded | Included | Included | Included |
| Equipment breakdown floater | Excluded | Included | Excluded | Excluded |
| Inland marine insurance floater | Excluded | Excluded | $10,000 | Excluded |
| Employee dishonesty floater | Excluded | $5,000 | $2,500 | Included |
Do you own the building that’s currently functioning as a bakery? If so, consider getting commercial property insurance. Use the table above to compare the quotes of commercial property insurance from companies we recommend.
Your bakery is using cooking and heating equipment. In connection, cooking and heating equipment are the leading causes of fires in the United States. Commercial property insurance can help if your bakery burns to the ground. How? It will pay for reconstruction costs so that you can have your bakery back and continue making money.
Just like general liability insurance, commercial property insurance has optional coverages that provide additional protection against exposures. These are:
- Stocks and contents coverage
- Business equipment coverage
The equipment you’re using to bake can get damaged. For example, if your oven overheats and gets engulfed in flames, then stocks and contents coverage will pay for repairs and even replace the oven. In other words, business equipment coverage reimburses losses if your bakery’s equipment and tools become damaged or lost.
Imagine what would happen if raw ingredients such as flour, sugar, yeast, and others became damaged or lost; A lot of capital will surely be wasted. Stocks and contents coverage will help you recover. In practice, this optional policy will reimburse losses if valuable items and materials of your bakery business get damaged or lost because of fire, extreme weather, theft, vandalism, and other covered perils.
Business Owner’s Policy for Bakeries
| CoverWallet | Thimble (Best) | NEXT | Hiscox | |
|---|---|---|---|---|
| General liability aggregate limit | $2,000,000 | $2,000,000 | $2,000,000 | $300,000 |
| Commercial property coverage limit | $50,000 | $500,000 | $260,000 | $25,000 |
| Optional policies can be added? | Yes | Yes | Yes | Yes |
| Name additional insureds for free? | Yes | Yes | Yes | Yes |
| BOP discount? | Yes | Yes | Yes | Yes |
Are you planning to get commercial property insurance and general liability insurance for your bakery? You might be thinking of purchasing each insurance policy separately. That works. But still, we want to inform you that there’s a cost-effective way of getting covered – purchasing a business owner’s policy.
So what is a business owner’s policy? A business owner’s policy bundles general liability insurance and commercial property insurance in one plan. Its cost is cheaper than buying the latter and the former separately. Furthermore, since two insurance policies are bundled, paying for premiums, canceling a coverage, and getting insurance certificates will be easier.
Business owner’s policy is very comprehensive too. Majority of carriers allow customers to add commercial auto or workers’ compensation insurance to their business owner’s policies. If you want to get an insurance plan that works wonderfully regardless of what unique business exposures are, purchasing a business owner’s policy is the best thing to do.
Workers’ Compensation Insurance for Home Bakers & Bakery
If you employ more than four people to help you run the bakery, then you’ll need to purchase a workers’ compensation policy.
Workplace injuries are very common in bakeries. Workers can get their hands cut, burned, or crushed. Here are some real-life examples of bakery accidents as recorded by the Occupational Safety and Health Administration.
- At 12: 45 a.m. on July 22, 2020, a worker is doing tasks assigned in behalf of a big bagel bakery. While removing bakery racks, he was caught between them and a wall. This resulted in bodily trauma and asphyxia, which caused death.
- On April 1, 2013, an employee, a bakery worker, was cleaning the insides of a dough slicer machine. Her hand got severed by the meaning during the cleaning session. The employee is transported to the nearest hospital for treatment
- 10: 45 on October 13, 2013, a bakery clerk sustained fractures in the right hip and was hospitalized. The injury resulted from an accident while she was placing a box of sliced bread on top of a rack in the freezer
When employees get injured or sick because of work, you’ll have to shoulder their treatment as well as lost income compensation. The function of workers compensation insurance is to take care of everything on your behalf – meaning that it will provide money you can use to get an injured or sick employee hospitalized, treated, and rehabilitated. Also, it will provide an allowance to the employee as reimbursement for lost wages.
Bakery Employee Dishonesty Insurance
Employees might commit crimes and your bakery will incur losses as a result. That’s why you shouldn’t have doubts about getting employee dishonesty insurance. Employee dishonesty insurance reimburses your losses if an employee does any of the following:
- Social engineering
- Theft
- Fraud
- Destruction of money and other similar objects
- Misrepresentation
- Document manipulation
Carriers offer employee dishonesty insurance as a stand-alone policy or as an inclusion in crime insurance. Consider getting stand-alone employee dishonesty insurance if you only want to get protection against employee crimes. On the other hand, if you’re afraid about what third parties might do to your business, we suggest you get crime insurance including employee dishonesty coverage.
Get all the best quotes from leading providers in a click of a button!
Bakery Insurance Cost: How Much is Insurance for a Bakery?
If you’re wondering exactly how much does bakery insurance cost, then you’ll be pleased to hear that it’s actually quite affordable. In fact, the average bakery insurance cost is around $420 per year or just about $35 per month in premium fees for a $1 million general liability coverage.
However, home bakers insurance cost may get even cheaper as your space is smaller and many times your business is too. Plus, on most occasions, home bakers deliver their goods to their customers rather than have customers come to their home and buy their baked goods, which significantly reduces the risk of insuring home businesses as well as its cost. And so, some only pay $25 per month or $300 a year for a $1 million general liability coverage.
Of course, this is just the average bakery insurance cost and this number can vary, depending on how large your bakery is, the number of customers you serve, your zip code/city, and your annual revenue. However, new business owners with a smaller bakery or a home bakery shouldn’t have to worry about the costs being too high.
Here’s a table showing the pricing of the best bakery insurance companies and their pricing for a $1 million general liability insurance for bakeries:
| Cost per Month | Cost per Year | Best for | |
|---|---|---|---|
| NEXT | $25 | $300 | Best overall; Fastest general liability insurance for bakeries |
| CoverWallet | $27 | $324 | Bakery insurance online quotes comparison |
| Tivly | $28 | $336 | Comparing bakery insurance quotes over the phone |
| Thimble | $28.52 | $342 | Short-term general liability insurance for home bakers and BOP for bakeries |
| Hiscox | $35 | $420 | Bakery insurance with automatic policy renewal |
How to Purchase Bakery Business Insurance?
Now that we’ve answered some of your more pressing questions, here’s a quick breakdown of the steps you need to take to purchase bakery insurance or home baking business insurance.
Step 1: Gather Your Business Paperwork
First, gather all of the necessary business paperwork that proves the legitimacy of your baking business. You’ll also need to know the square footage of your workspace. If you have a home bakery, then you’ll need to measure the area of your kitchen, storage, and preparation areas. If you rent a space, then you’ll need to obtain the square footage from the landlord
Step 2: Compare Bakery Insurance Quotes
If you want to get a good deal, it’s always best to compare baking insurance companies and providers. You can easily do this online through this page, by hitting the get quotes button and following through with the smooth process. You will then receive free bakery insurance quotes online from the very best bakery and home baking insurance companies at competitive rates.
Step 3: Determine Your Coverage Types, Limits, and Deductibles then Complete Your Purchase
Once you have a list of quotes and your top choices, figure out which one is best for your needs in terms of company, coverage, and budget and you will be able to complete your purchase fully online through our partners. You’ll have to determine your coverage types, limits, and deductibles ahead of your purchase.
Help others make better decisions
Best Bakery Insurance Companies
Many insurance companies offer coverage for bakeries. Given the many choices, you might get confused about which to get insurance from. To solve that problem, here’s a review mentioning the pros, cons, and pricing of the best bakery insurance companies for $1 million general liability coverage.
NEXT Bakery Insurance
Pros
- Best overall
- Get an online proof of insurance and send as a text message, email, or social media post
- Fastest general liability insurance for bakeries
- Great customer service and reputation
- Issues an online proof of insurance instantly
- Outstanding value for money
- Bundle two or more insurance policies and get a 10% discount
Cons
- Couldn’t find any
NEXT’s bakery insurance includes general liability, commercial auto, workers’ compensation, and commercial property insurance policies. When buying insurance from this company, consider bundling two or more policies in a BOP so that you’ll get a 10% discount on premiums.
Best for: Best overall; Fastest general liability insurance for bakeries
Average cost: $25 per month
Our rating: 10/10
CoverWallet Bakery Insurance
Pros
- Compare bakery insurance quotes online
- Cancel a policy anytime
- Easy policy management with the CoverWallet website or app
Cons
- Not an insurance company but a broker selling the quotes of its partners
CoverWallet has an online quotes comparison platform where you can compare the offers and pricing of different carriers covering bakeries. Even though it’s just an insurance broker, CoverWallet has tailored plans for bakeries as it customizes the quotes of its partners. You have four insurance options with CoverWallet – general liability only, general liability and commercial property, business owner’s policy with workers compensation, and a custom plan.
Go for CoverWallet because its insurance process is mostly digitized. Pay premiums via the CoverWallet website or MyCoverWallet app. Talk with agents online. Also, you can get a certificate of insurance by computer or phone.
Best for: Bakery insurance online quotes comparison
Average cost: $27 per month
Our rating: 10/10
Tivly Bakery Insurance
Pros
- A partner of reputable insurance companies
- Call and compare bakery insurance quotes over the phone
- Responsive customer service
Cons
- You need to call to get a quote
Tivly (formerly CommercialInsurance.Net) sells general liability, commercial property, workers’ compensation, business owner’s policy and other insurance products for bakeries. This company can take you to partners if it can’t provide coverage. Call Tivly now and compare bakery insurance quotes over the phone.
Best for: Comparing bakery insurance quotes over the phone
Average cost: $28 per month
Our rating: 10/10
Hiscox Bakery Insurance
Pros
- Automatic policy renewal
- 14-day money back guarantee
- Easy online insurance application
- Worldwide coverage
Cons
- Poor customer reviews
Hiscox sells general liability insurance, business owner’s policy and cyber liability insurance for bakeries. Your insurance from this company automatically renews per year. That said, you’re sure to get covered all the time if you stay with Hiscox. As a new policyholder, there’s no worries trying Hiscox out because it gives a 14-day money back guarantee should you decide to cancel your coverage.
Best for: Bakery insurance with automatic policy renewal
Average cost: $35 per month
Our rating: 9/10
Thimble Bakery Insurance
Pros
- Short-term general liability for home bakers
- Cheap BOP for bakeries
- Get insured online
Cons
- Customer service takes long to respond sometimes
Thimble sells its bakery insurance as a business owner’s policy – a combination of commercial property insurance and general liability insurance. But this company doesn’t stop the protection for your business with these two policies. Thimble’s BOP for bakers also includes business interruption insurance and equipment breakdown insurance.
You might like Thimble because it allows you not to have any deductible on your insurance policies. Furthermore, you can purchase insurance and proof of insurance online. Another thing, if you’re a home baker, Thimble can cover you with short-term general liability coverage that lasts for hours, days, weeks, or months.
Best for: Short-term general liability insurance for home bakers and BOP for bakeries
Average cost: $28.52 per month
Our rating: 9/10
Get all the best quotes from leading providers in a click of a button!
Bakery Insurance Frequently Asked Questions
Do You Need Insurance to Sell Baked Goods From Home?
Although it may not be a legal requirement to have insurance for baking from home, it’s a smart decision to make. A simple home-based bakery insurance policy can protect your business against unforeseen events such as a fire, lost product, or one of your customers getting sick or injured from your food. Without it, you may end up with big unexpected financial losses due to such occurrences.
Insurance for Cake Business at Home: What Insurance Do I Need for an At-Home Cake Business?
One of the most common insurance for selling cakes from home is public liability insurance for home bakers. Public liability covers you in the event that one of your customers sustains a loss or is injured from a service provided by your business.
For example, if a customer slips and falls in your kitchen or somebody cracks their tooth on a rock that made its way into your bread, then this type of small business insurance ensures that you don’t have to pay out of pocket.
However, you might want to have a broader coverage that is tailored to your specific business risks. Many times, Business Owners Policy (BOP) for home bakers answers that need, as it combines several vital business insurance coverages in one policy at lower rates. In many cases though, general liability insurance for home bakers might be enough, as it covers damages caused by your business activity to the public (customers), as well as business partners, vendors, etc.
Do I Need a Business License to Purchase General Liability Insurance for my Bakery?
Yes, in order to purchase a bakery insurance policy, you’ll need to have a legitimate licensed business . This means that you’ll need to have your IRS-issued EIN number , and possibly your articles of incorporation, or local city business license/retail license handy to present to your insurance provider.
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