Insurance for Bakeries

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Why Do Bakeries Need Insurance?

Bakeries are known for their homemade treats and welcoming aromas that fill the air. Whether customers come to you for their wedding or birthday cakes, brunch spread, or a quick snack on the road, you add happiness to their day. Working in the food business also brings risks that can turn happy moments into unhappy ones. Baker insurance protects your bakery from these risks and the lawsuits that often follow.

Companies categorized under this industry are primarily involved in the retail of bread and other bakery products.

Risks Bakeries Could Face

Bakers often face these risks:

  • Food Poisoning: Working with eggs, fruits, and milk is risky. If any of these ingredients spoil and make customers sick, they can file a lawsuit. The rise of food allergies is also important to consider. If you fail to maintain a clean baking environment and nuts are cross-contaminated, your baked goods can cause serious illness and even death.
  • Failure to Deliver: As a baker, you know delivering what you promise on time is crucial to your customer’s event or party. Sometimes employees fail to show up, a wrong ingredient is used, or a cake falls on the floor delaying your completed masterpiece. Failing to deliver leaves the door open for lawsuits from unhappy customers.
  • Employee Injury: Bakers use tools including knives that can cause significant injury. If an employee cuts themselves and requires medical attention, you are responsible for the bill.
  • Auto Accidents: If you cause an accident while delivering a wedding cake, your business is responsible for any damages.
  • Food Spoilage: Refrigeration systems are valuable when they work. But, when one breaks without your knowledge and thousands of dollars of food are spoiled, it is an unexpected expense you can’t usually afford.

Types of Coverage Bakeries Need

Bakery insurance protects your business, reputation, and financial means in the event of a lawsuit or unpleasant scenario. Every bakery needs general liability and commercial property insurance. If you have employees, you need worker’s compensation, and if you offer delivery, you need commercial auto insurance.

  • General Liability: Pays to defend your business when a lawsuit is filed alleging injury or property damage. It also covers the costs of medical expenses and property repair or replacement.
  • Commercial Property: Protects from catastrophic events like fires and explosions by covering costs to repair or rebuild your building or business equipment. Many companies let you add business interruption insurance to help you pay your normal expenses like rent and payroll while you are shut down.
  • Business Auto: Covers damage to your business vehicle in the event of an accident in addition to damages to a third party’s property that you are liable for. It is also important to add hired and non-owned auto if you or your employees use personal vehicles for business errands.
  • Product Liability: This policy is like food insurance and protects your business when a lawsuit is filed alleging your bakery items caused sickness.
  • Professional Liability: Pays costs for lawsuits that are filed when your bakery doesn’t deliver goods as promised. It also covers you when special orders like allergy requests are overlooked and cause a severe allergic reaction.
  • Equipment Breakdown: Replacing broken equipment like refrigerator systems is expensive. This policy pays for repairs or replacements of bigger equipment. In addition it covers other costs associated with it like food spoilage.

How Much Does Bakery Insurance Cost?

Baker insurance costs vary depending on the carrier you choose. Most insurance companies review your claim history, qualifications, health inspections, and whether you offer delivery to calculate your bakery insurance costs. You can request a baker insurance quote today by completing the form below.

What type of insurance does this industry need?

Policy What is it? Why get it Popularity in your industry Want free quotes?
General Liability
This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

What is it: This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy.

Why get it: General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

Commercial Property
This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

What is it: This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage.

Why get it: If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.

Workers Compensation
Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

What is it: Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work.

Why get it: Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

Umbrella Insurance
Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits. This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.

What is it: Umbrella insurance offers excess liability protection in the case that your General Liability, Commercial Auto Liability, and/or Employer's Liability coverage is insufficient. It essentially acts as a "back-up" plan, providing additional financial protection in the case that your business faces a particularly large claim that exceeds a single policy's limits.

Why get it: This policy can be particularly valuable for a business that faces a variety of risks and has multiple liability policies.

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