Business Insurance For Your Bakery Business

As a business owner, you must ensure your bakery is properly insured. This will protect you from potential risks and liabilities, which are crucial considerations in the overall cost to open a bakery. Many different types of insurance policies are available, so it’s critical to choose the one that best suits your needs.

 

Bakery Insurance Policy Options & Cost

The four most common types of insurance for bakeries are as follows:

  1. General liability insurance, which protects you from lawsuits arising from injuries or property damage that occurs as a result of your business activities. General liability insurance can also help protect your bakery’s assets in the event of a lawsuit.
  2. Commercial property insurance, which can help reimburse you for lost or damaged property caused by fire, theft, or other covered events.
  3. Workers’ compensation insurance, which helps bakeries cover the costs of employee injuries or illnesses. This type of insurance can help businesses pay for medical expenses, rehabilitation costs, and other related expenses. Workers’ compensation insurance is required in all states except Texas. Workers’ compensation insurance typically costs between 1% to 1.5% of your total payroll costs.
  4. Business income insurance, which is sometimes called business interruption insurance or business continuity insurance. This insurance helps businesses recover from certain losses caused by events such as property damage, theft, or business interruption. This type of insurance can help businesses cover the costs of not being able to operate for a period of time. It can also help businesses pay for expenses such as employee salaries, rent, and other ongoing costs.

Other types of business insurance to consider based on the specifics of your bakery include:

  • Product liability insurance is a type of insurance that helps businesses protect themselves from lawsuits that may arise due to products that they sell.
  • Professional liability insurance, also known as Errors and Omissions (E&O) insurance, helps professionals protect themselves from lawsuits. 
  • Employment practices liability insurance, also known as EPLI, helps bakeries protect themselves from lawsuits that may arise from the way they employ their staff.
  • Cyber liability insurance protects you from lawsuits that may arise from a data breach or other cyber incident. 
  • Business identity insurance protects your business from theft or misuse of your company name or logo. 
  • Commercial auto insurance and commercial fleet insurance protect you from lawsuits that may arise from accidents involving employees while driving for work.
  • Key person insurance or key man insurance protects your bakery from losses that may arise from the death or illness of a key employee
  • Equipment breakdown insurance can help pay for the cost of repairing or replacing damaged equipment, 

While this list of insurance options covers most bakeries, you may be required to purchase additional coverage depending on the specific nature of your bakery. Speaking with an insurance company is important to determine which policies are right for your business.

The cost of business insurance will vary depending on the type and amount of coverage you purchase. However, business owners can expect to pay a few hundred dollars per year for general liability insurance.

It is important to talk to your insurance company to ensure you have the right coverage in place for your bakery company.

 

How Much Insurance Should a Bakery Have?

This is a difficult question to answer, as the amount of insurance you need will vary depending on the type of products you offer and the size of your bakery. That being said, most insurance experts recommend that business owners purchase enough coverage to protect their assets in the event of a lawsuit.

When shopping for liability insurance, be sure to ask your insurance company about the coverage limits and supplemental coverage options available.

In summary, business insurance is important for all bakeries. The type and amount of coverage you need will vary depending on the size and scope of your business. 

However, most experts recommend that you purchase enough coverage to protect your assets in the event of a lawsuit. Be sure to speak with your insurance company to determine which policies are right for your business.