Are you concerned about the risks and exposures of owning a bakery? If YES, here are 4 important bakery business insurance policy in 2022. Bakeries, much like any other food production businesses, can prove to be high risk environments to work in. Your staff will often need to use expensive pieces of equipment in order to make all of those baked delights for customers to enjoy.

Also have it in mind that you are creating food items which are to be sold to the general public, which in itself is another risk area for your business. Therefore, to help protect your business, you will have to comply with certain health and safety measures, and you will also need to have liability cover to protect you.

There are many important reasons why this is important for bakeries, whether a small independent outlet or a large chain. For your bakery business to be protected correctly, it is advisable you talk to an agent or an attorney about the more specialist policies that you can arrange for your business. These can include cover for your equipment and of course, the products that you sell.

What are the Possible Exposures and Risks Faced by Bakery Businesses?

Generally, bakery Insurance financially protects your business in the event of an accident like a fire or intentional malicious damage. It also protects your equipment, stock, customers, and staff members too. In a nutshell, bakery insurance is an essential part of running your business. Whether you’re a home baker or own your own bakery, these are possible exposures you should expect.

Unless your bakery only allows access to just repairmen and inspectors; but if you offer tours or retail operations, then all life safety codes must be met to assure visitor safety. Good housekeeping and nonslip flooring finishes are critical to minimizing slips and falls.

Spills of liquids should be cleaned up immediately and warning signs posted. You will also have to ensure exit doors are clearly marked and free of obstacles. Adequate interior and exterior lighting should be available in the event of a power outage. Parking lots and sidewalks need to be in good repair, with snow and ice removed.

  • Products Exposures

These exposures are moderate due to the possibility of contamination, spoilage, and foreign objects in the baked goods. Always ensure that your workplace meets all FDA specifications for sanitary working conditions. Additionally, strict controls must be in place to prevent contamination from exposure to chemicals such as insecticides and pesticides. Stock dating and rotation are important factors.

  • Crime Exposure

This exposure is from employee dishonesty of both inventory and money. Ensure you conduct background checks on all employees. Ensure your inventory is under the supervision of more than one individual so that there are checks and balances.

There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. Regular audits by an outside firm should be conducted. Theft of money and securities may be a concern if drivers collect monies or if there are retail operations. Receipts should be issued for any cash payments received.

  • Business Auto Exposures

As early morning delivery is crucial to maintain product freshness, drivers may be required to deliver goods in darkness or during periods of inclement weather. They should be assigned to routes to increase their familiarity with traffic patterns. Drivers should have a commercial license and acceptable MVRs. Vehicles must be regularly maintained with records kept in a central location.

  • Environmental Impairment Exposure

This exposure might be significant if underground tanks are used to store cooking oils or fuel for vehicles or equipment. In the united states, all storage and waste disposal must comply with all federal and state requirements. All waste items must be removed regularly by a qualified outside contractor.

Ovens used to bake yeast products may release ethanol into the atmosphere. An ethanol abatement system must be in place, preferably a catalytic oxidation system. If there are underground storage tanks, a UST policy will be required.

  • Workers Compensation Exposure

This can come from burns caused by the ovens, machinery, and equipment, cuts or accidental dismemberment from rotating blades or moving parts on machinery, foreign objects in the eye, hearing impairment from noise, back injuries or a hernia from lifting, and slips and falls from spills and inadequate housekeeping. Ensure you provide adequate safety equipment, and all machinery should be properly guarded.

  • Prolonged Exposure

Have it in mind that flour dust can result in abrasion of tooth enamel, allergic reactions, asthma, and contact dermatitis. Ensure that ventilation systems are put in place especially in fermenting areas and on ovens to prevent the accumulation of noxious gases that can lead to lung injuries and asphyxiation.

  • Property Exposures

All machinery and equipment, including the ovens, must be inspected and maintained regularly to avoid wear and tear or overheating losses. There should be adequate ventilation systems in place to prevent dust from flour and other dry ingredients from building up and spontaneously combusting. All frying operations must have automatic fuel shut – offs and be done under a fire suppression system. A sprinkler system is preferred.

Controls, such as alarms, must be in place to warn if power is out or if the temperature rises in coolers and freezers. Backup systems, such as emergency generators, should provide power if an outage or shutdown occurs. The business income exposure can be very high as some production equipment may be difficult to repair or replace quickly.

4 Most Important Insurance Policy for a Bakery Business

Insurance is very important in proper business functioning that both federal and state governments require companies to carry certain types. Thus, being properly insured helps you protect your bakery by protecting it from government fines and penalties.

  1. General Liability

General Liability Insurance is a comprehensive package that helps safeguard your bakery against unforeseen events. This insurance covers potential hazards and risks that are not specifically excluded in your business insurance policy. This liability insurance is very necessary for bakeries because you have so many customers going through your doors each day. If a customer injures themselves while on your premises, general liability will cover it.

If a customer’s property is harmed in some way while they are at your business, general liability will cover that as well. It also safeguards your bakery if a customer is harmed or injured by the products you sell as well. It also covers you if previous services you provided are found to have harmed a customer in some way.

  • Median cost per year: $485
  • Policy limit: $1 million per occurrence
  • Policy deductible: $500
  1. Business Owners Policy

This insurance policy is specifically designed for small businesses such as your bakery. It is a commercial insurance policy that provides extensive and combined coverage. It includes general liability, and adds property protection and intangible asset losses.

This policy safeguards the buildings and structures of your business plus the contents inside. BOP protects you from financial losses caused by natural disasters that destroy your bakery building for example. It also protects the specialized baking tools and equipment you have inside.

It can protect you from the loss of income as well. If a fire destroys the income in your cash register, BOP will replace it. If you are unable to continue with standard business operations while waiting for your bakery to be repaired, the loss of that income is covered as well.

  • Median cost per year: $795
  • Policy limit: $1 million per occurrence
  • Policy deductible: $500
  1. Commercial Auto

Note that many small bakeries compete for customers by offering special services such as delivery. Once your bakery uses motor vehicles for any business purpose, you will need to be covered by commercial auto insurance. Business auto insurance protects your company from the expense of repairing or replacing vehicles that are damaged in accidents.

It also takes care of medical or hospital bills and related expenses when someone is injured in the accident. Business auto insurance can be expanded to include protection from losses due to theft, vandalism and non – accident impact events as well.

  • Median cost per year: $370
  • Policy limit: $1 million per occurrence
  • Policy deductible: $500
  1. Workers Comp

In the united states, you are mandated by law to protect your employees with workers comp insurance. Note that this law applies whether you have one employee or hundreds. Workers comp coverage protects your employees from financial burdens that can be caused by work – related injuries.

Once your employee has an accident on the job, becomes injured or becomes ill, workers comp will cover them. Workers comp pays the employee’s medical expenses. It also provides for lost wages due to temporary or permanent disability. It provides the employee’s family with death benefits in the worst case scenario.

  • Median cost per year: $1,995
  • Policy limit: $1 million per occurrence
  • Policy deductible: $500


Opening and running a business is challenging enough without having to worry about any significant financial loss due to unforeseen and unplanned circumstances.

However, business insurance can protect your bakery from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury. Purchasing the appropriate insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment.

Frequently Asked Questions

  1. What Coverage Is Included With Bakery Insurance?

Workers’ compensation is required in almost every state for bakeries with employees. This coverage helps pay medical fees and lost wages for employees who are injured on the job. Most policies include employer’s liability insurance, which protects bakery owners against lawsuits related to workplace injuries.

  1. What Do You Need For A Bakery Insurance Quote?

For a bakery insurance quote, you will need $5.

  1. How Much Is Insurance For A Bakery?

The cost for insurance for a bakery is about $40 per month, or $485 per year.

  1. How Do You Get Home Bakery Insurance With Thimble?

With Thimble, ensuring your home bakery takes less than 60 seconds when you click (Get a Quote) or download the Thimble app. Then, enter a few details about your baking services, your ZIP code and your desired coverage length (choose from hourly, daily, or monthly policies), and get an instant quote outlining your home bakery insurance costs. Click to purchase, and you will receive your COI.

  1. What Is Covered Under The Home Bakery Liability Insurance Policy?

The following are covered under the home bakery liability insurance policy;

  • Third-party bodily injury
  • Property damage claims
  • Equipment damage claims
  • Product claims that food made a customer sick
  1. How Much Is Liability Insurance For A Bakery?

The cost for liability insurance is about $40 per month, or $485 per year, for general liability insurance

  1. What Coverages Do Bakery Policies Provide?

Workers’ compensation.

  1. What Is A Cottage Law Bakery?

A cottage-law bakery is a small-scale bakery, usually operated out of someone’s home. These home-based businesses are regulated by (cottage food laws) rather than commercial restaurant and health codes.

  1. What Are The Different Types Of Bakery Insurance?

The following are different types of bakery insurance;

  • Cyber Insurance
  • Umbrella Insurance
  • Business Owners Policy
  • Commercial Auto Insurance
  • General Liability Insurance
  • Workers’ Compensation Insurance
  1. What Should A Bakery Sell?

The listed below are some bakery items that can be sold in at the bakery;

  • Personal pies
  • Homemade bread
  • Miniature cheesecake
  • Chocolate strawberries
  • Cannolis (regular size or miniature)
  • Cookie sandwiches with icing in the middle
  1. What Kind Of Bakery Or Donut Shop Insurance Do You Need?

Some bakery insurance needed are;

  • Medical insurance
  • Unemployment insurance
  • Worker’s comp insurance
  • Commercial auto insurance
  • General liability insurance
  1. What Type Of Insurance Do Bakeries Need?

The following are types of insurance bakeries need;

  • Medical insurance
  • Unemployment insurance
  • Worker’s comp insurance
  • Commercial auto insurance
  • General liability insurance
  1. How Much Does Bakery Insurance Cost?

Bakery pays about $40 per month, or $485 per year, for general liability insurance.

  1. How Much Does Home Bakery Insurance Cost?

On average, home bakery insurance cost is about $25 per month or $300 per year.

  1. What Does Bakery Insurance From Flip Cover?

FLIP was created to give as many food vendors as possible the policy they need, including those who specialize in;

  • Bake Sales
  • Baked Goods
  • Cottage Food
  • Home Food Business
  1. Do You Need Insurance To Sell Baked Goods Home?

Yes! As a small business owner, you need your own insurance policy. Your company’s insurance applies only to the work you do for them, not to your home baking. Insurance is an essential ingredient in your recipe for a business success.

  1. What Insurance Does A Baker Need?

Workers’ compensation is needed in every state for bakeries with employees. This coverage helps pay medical fees and lost wages for employees who are injured on the job. Most policies include employer’s liability insurance, which protects bakery owners against lawsuits related to workplace injuries.

18. Why Do You Need A Home Bakery Insurance Policy?

A home-based bakery insurance policy so vital because it can protects 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 loss due to such occurrences.

19. Can You Run A Bakery From Home?

Yes, it possible to run a bakery from home. In fact, operating a home bakery can be a great alternative. It is usually smaller in scale than retail or wholesale bakeries

20. How Much Do Home Bakery Insurance Policies Cost?

Home bakery insurance costs about $25 per month or $300 a year. The figure can vary, depending on how large your bakery is, the number of customers you serve, your zip code/city and your annual revenue.

21. Does Cake Need Insurance For Baking?

No! Unlike employers’ liability insurance (which is a legal requirement if you have any staff, volunteers or apprentices working for you), public liability is not an essential legal requirement for cake baking.

22. How Can Bakeries In Massachusetts Get Bakery Insurance?

For help insuring a bakery business, contact the insurance agents at Haber-man Insurance Group. the independent agents have worked with many bakeries in Massachusetts, and they have the expertise necessary to get you a policy that’s well-suited to your business’ needs.

23. How Can Bakeries In New Hampshire Get Bakery Insurance?

Contact the independent insurance agents at (HPM) Insurance, for help insuring a bakery of any size. Where the team members have worked with many bakeries in New Hampshire and throughout New England, and are ready to help your business find a bakery insurance policy that is reliable and affordable , and yet provides solid protection.

24. What Safety Measures Can You Take To Protect Your Bakery?

The following are some precaution to take in protecting your bakery;

  • Food storage
  • Personal hygiene
  • Equipment maintenance
  • Wearing clean clothes
  • Always wash utensils and cooking surfaces
25. What Are The Home Bakery Insurance Policy Limits?

With Thimble’s Home Bakery Insurance, consider a policy limit of $1 million or $2 million. While a $1 million limit protects against significant liability, you can extend your coverage to a $2 million limit.

26. Why Do Bakeries Need Product Liability Coverage?

As a food-serving business, your bakery runs the risk of making a customer sick from your food, whether from foodborne illness, unlabeled allergens, or other related matters. For this reason, product liability insurance can protect your bakery from the cost of claims that your food made a customer ill or cause any health damage.

27. What Kind Of Insurance Do You Need To Sell Food From Home?

As a home food seller, you will need the following insurance;

  • Auto Liability
  • General Liability
  • Workers Compensation.In most cases, they may require that you list them as additional insured on your policies
28. Do You Need Food Hygiene Certificate To Sell Sweets?

The answer is yes! You need food hygiene certificate to sell sweets. Even if you are selling only sweets, a full hygiene certificate is required and food safe handling. Besides public liability insurance, you should also have product liability.

29. How Can You Save On Business Insurance?

Consider the following tips on how you can possibly make savings on business insurance;

  • Buy a package policy
  • Shop near your domain
  • Choose a higher deductible
  • Find out strategies to prevent losses
  • Work closely with your agent or broker
30. How Much Does Business Insurance Cost?

The average cost for business insurance is about $300 to $1,000 per year. However, different types of businesses will have different needs and incur different risks.