5 Best Bakery Insurance & Home Bakery Insurance for 2023

Thang Truong
Thang Truong
Updated on:

Regardless if you run a home-based bakery or you have separate location, bakery owners face some extraordinary risks doing their work every day, keeping customers supplied with the baked goods they love. The risks include:

  • Fire damage to your business property
  • Harm to expensive ovens and equipment
  • Employees slipping on the kitchen floor and becoming injured on the job
  • Customers getting sick because you used a spoiled ingredient in a recipe.

These risks could result in repair and replacement costs, medical bills, lawsuits, and settlements expensive enough to put most bakeries out of business. It’s why bakers purchase adequate insurance coverage to protect them from the costly risks they face.

This article will reveal the best insurance companies for bakeries, along with answers to common questions bakers often have about getting coverage.

The 5 best bakery insurance companies

  • CoverWallet: Best for getting several bakery insurance quotes all in a single place
  • Simply Business: Best for low-cost bakery business insurance
  • Hiscox: Best for bakeries with unique insurance requirements
  • THREE: Best for complete coverage in a single solution
  • Thimble: Best insurer for new bakeries

CoverWallet: Best for getting several bakery insurance quotes all in a single place

CoverWallet makes it fast and easy for busy bakers to get several insurance quotes, all from a single source. 

With CoverWallet, you complete a single online application, and it checks with its network of insurance providers and presents you with quotes from them. The end-to-end experience usually takes less than ten minutes. CoverWallet is known for:

  • Getting insurance fast
  • Simple and easy online application
  • Immediate proof of insurance
  • Flexible coverages for bakeries
  • Cost-effective coverage

If getting multiple quotes efficiently is essential to you, and it should be, you owe it to yourself to check out CoverWallet.

Simply Business: Best for low-cost bakery business insurance

Simply Business makes getting bakery coverage simple. The insurer takes pride in making the process of buying insurance for bakeries clear, fast, and affordable.

The firm was founded in 2005 and is based in the United States and the United Kingdom. It’s an online insurance brokerage that specializes in protecting small businesses.

No matter what type of bakery you own, Simply Business is committed to helping you find the right coverage at the right price. With Simply Business, you input information online about your bakery, and it will present you with quotes from top insurers in its network. This allows you to compare premium prices and insurance coverages and select the best policy for your bakery, all in a single place. It’s the simplest way for busy bakers to get the coverage they need.

Based on my experience, Simply Business only offers home-based bakery insurance, and only one provider will offer quotes for it.

Hiscox: Best for bakeries with unique insurance requirements

Hiscox offers specialized insurance coverage for bakeries and other types of small businesses. 

Hiscox allows you to buy business insurance online, through a company representative over the phone, or an insurance agent. You can customize your coverage to meet your unique business needs based on the risks it faces.

If you choose Hiscox for your bakery insurance coverage, you can rest assured knowing you’re entrusting your livelihood to a firm in operation for 120 years. It exclusively offers insurance for small businesses. More than 400,000 smaller companies trust Hiscox for their coverage needs.

Hiscox is known for tailoring unique insurance solutions to the individual requirements of small businesses. The company provides excellent service, quick quotes, instant coverage, and fast claims processing.

Three: Best for complete coverage in a single solution

THREE prides itself on being a different kind of small business insurance provider. It protects your bakery — including your workers, property, and operations — with one comprehensive insurance policy.

Getting coverage from different providers or piecemeal through a single one can leave you with coverage gaps — or too much protection that costs a lot. 

THREE’s standard policy includes the following coverages:

  • Business liability
  • Business interruption
  • Cyber
  • Workers’ compensation
  • Business vehicle
  • Property.

THREE’s combined business coverage means just one monthly bill and a single number to call for filing claims.

Thimble: Best insurer for new bakeries

Thimble prides itself on offering quick-thinking insurance for fast-moving businesses

That certainly applies to many bakeries. Thimble is known for providing bakeries and other businesses with quick coverage. Thimble may be a relatively new company, but it’s a top-rated insurer, earning a 4.7 out of 5.0 rating on Trustpilot. 

Thimble can provide insurance per project for startups and scale coverage as businesses grow. You can modify, pause or cancel your insurance anytime with no extra fees. This could be a good thing for bakeries just getting off the ground.

Here is a bakery insurance quote from Thimble.

What types of insurance do bakery businesses need?

Most bakers start with a Business Owner’s Policy (BOP). It combines three coverages that help protect bakers against the most significant risks they face: general liability, commercial property, and business interruption insurance.

General liability insurance

General liability insurance covers you if someone (a non-employee) is injured on your business property or you or someone who works for you causes damage to another person’s property, perhaps when making a delivery. It also covers advertising injuries.

You can get general liability insurance as part of BOP insurance or you can get it in a stand-alone policy. Either way, this is the most popular insurance policy among bakery businesses. If you can only afford one policy, let it be general liability insurance.

Learn more at general liability insurance cost and the best general liability insurance companies

Commercial property insurance

Commercial property insurance protects your bakery business location, the area surrounding it (such as sidewalks and parking lots), and the inventory, tools, and equipment contained in it, including:

  • Ovens
  • Mixers
  • Baking sheets
  • Inventory
  • Ingredients
  • And more.

If you rent a place for your bakery business, the landlord will require you to have commercial property insurance before signing the lease.

Learn more at commercial property insurance cost and the best commercial property insurance companies

Business income interruption insurance

Business income insurance replaces your lost income if you can’t open your bakery for a reason covered by your insurance. For example, if a fire damages your building and you can’t open it while repairs are done, business income coverage will replace some of your lost income, which will help you pay ongoing expenses, such as bills, rent, and payroll.

Learn more at the best business interruption insurance companies

Product liability insurance

Product liability insurance protects bakery businesses from claims that their cakes or cookies caused bodily injury or damage to someone else’s property. Product liability insurance typically covers claims related to:

  • Design flaws that occurred before the product was produced
  • Defects that happen when the product is manufactured
  • Strict liability, which means a customer is injured by a manufacturers’ product, even if the business owner isn’t held negligent
  • Improper warning, which happens if a business owner, wholesaler or salesperson doesn’t give the customer enough information about how to use a product properly and they’re injured while using it.

This coverage is particularly necessary for bakery businesses or any food service businesses in general. Small bakery businesses usually add this important coverage to their general liability insurance policy or BOP if they only get either of these two popular policies. You can also choose to buy a stand-alone product liability insurance policy. It will be a bit more expensive but you will have more comprehensive coverage.

Learn more at product liability insurance cost and the best product liability insurance companies

Workers compensation insurance

If you have employees, your state will likely require you to get workers’ compensation insurance. It provides benefits when employees are injured or become ill for work-related reasons. Workers’ comp pays healthcare and disability expenses, lost wages, job retraining, and more. Workers’ comp should be thought of as more than just a requirement. It’s the right thing to do. Your bakery team is central to the success of your business. That’s why protecting them with workers’ compensation insurance is so important.

Learn more at workers comp insurance cost and the best workers comp insurance companies

Commercial auto insurance

If you and your employees drive personal or company-owned vehicles for business reasons, perhaps to make deliveries, you must get commercial vehicle insurance. Personal auto insurance won’t pay if anyone is involved in an accident while driving for work. Commercial auto insurance covers medical expenses and costs to repair damaged property when you or an employee is driving for business purposes and gets in an accident.

Learn more at commercial auto insurance cost and the best commercial auto insurance companies

Other additional coverages for bakery businesses

It’s easy for baked goods to get damaged while delivering them. Perishable goods in transit coverage pays costs if you experience product damage because of a mechanical breakdown or from being involved in a collision.

Food contamination insurance will pay for medical care, lawsuit, and settlement costs if you bake or serve something to a customer and they become ill because of it and sue you. 

Business income for contamination coverage can help you recover lost income if a government agency shuts down your bakery because of food contamination.

If your bakery ever serves liquor as a part of doing business, you should consider getting liquor liability insurance. It will protect your business if an intoxicated person hurts someone or damages another person’s belongings after your bakery served them alcohol.

An experienced business insurance agent or representative at an insurance company can help you identify the coverage you need — and levels of it — for your business.

Home bakery insurance: What coverages do you need?

If you are just starting out and running your bakery business out of your home, you probably need similar coverages as if you had a separate location. You should be aware that your homeowner insurance doesn’t cover you if something happens because of your bakery operations. You may need to either get a commercial property policy or add an endorsement to your existing homeowner insurance policy. Either way it will increase your insurance cost.

After you sort out your commercial property insurance, you may also want to get a general liability policy with additional product liability coverage to protect your liabilities from your bakery business.

Who needs bakery insurance?

Anyone who earns money from baking should consider this coverage, including:

  • Bakeries
  • Pastry shops
  • Home-based bakers
  • Home-based bakeries
  • Cafés
  • Wedding cake bakers 
  • Donut and bagel shops
  • Bread, pie, cookie, and pretzel manufacturers.

How much does bakery insurance cost?

Bakeries pay an average of $600 per year for a general liability insurance policy. This is the most common policy for any small businesses, including bakeries. It covers bakeries from claims related to bodily injuries of any third parties at your workplace or property damages caused by your bakery operations.

If you add more coverages, you’ll pay more.

Average bakery insurance cost per month

The average cost of a general liability insurance for bakeries is $50 per month. A more comprehensive bakery insurance policy costs $325 per month, on average. This includes general liability with additional product liability coverage, commercial property insurance, and commercial auto insurance. Below is the cost breakdown of different coverages:

Bakery insurance coverages Average cost
General liability insurance $50 per month
Additional product liability coverage $40 per month
Commercial property insurance $110 per month
Commercial auto insurance $125 per month

These are just the averages. Your rates will be different. Be sure to shop around with a few companies to compare quotes. Work with a top broker like CoverWallet or Simply Business is a good way to get and compare several quotes in one place.

What factors affect bakery insurance cost?

Different bakeries will have different insurance costs. Bakery insurance cost varies significantly depending on several factors. Below are some of the main ones:

  • The size of your bakery business: revenue, employees, and number of customers
  • The types of cakes or cookies that you bake
  • The ingredients that you use
  • The safety standards of your operations
  • Location
  • Your experience
  • Your claim history

How to get cheap bakery insurance?

Getting the right coverage you need to protect your bakery at a reasonable price is important. Below are a few tips to help you get the right price.

  • Learn about bakery insurance. Studying up on bakery business insurance isn’t complicated or time-consuming. In as little as 20 to 30 minutes of research or time spent with a business insurance professional, you should be able to identify the coverage you need. There’s no need to become a bakery insurance expert, but a foundational understanding of the coverage will help you make wise decisions with or without professional support.
  • Consider your business risks. No two bakeries are the same, and each faces unique risks. Once you become familiar with bakery business insurance coverages, figure out which ones will protect your bakery against the threats it faces. Only get the coverages that you need. Don’t get coverages that your bakery doesn’t need. It will increase the cost unnecessarily.
  • Compare several quotes: Fill out applications for the coverages you need with an insurance agent, several online insurers, or an online insurance marketplace or broker. Get online quotes with Thimble or compare several quotes with top broker like CoverWallet or Simply Business.
  • Review your quotes and purchase insurance. Compare your quotes to find the best coverage at the fairest price for your bakery. Before purchasing insurance, check that the insurer is legitimate, has strong financial ratings, and has good online reviews. Once you purchase your insurance, you should be able to get proof of insurance immediately. If needed, you will be able to make changes to your insurance when it is in effect
  • Renew your insurance. A lot can change in a year. That’s why it’s essential to review your policy and get several new insurance quotes before you renew. You may find that you need different — or more or less coverage — or that you could get it at a better price.
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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