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Do You Need Insurance Coverage to Sell Cake from Home

Do you need insurance coverage to sell cake from home? If YES, what kind of insurance would you need for your cake business? I advice you read on to find out.

Yes, in the united states, you will need insurance to sell cake from home. Just like every other person setting up their own home bakery business knows, there’s a lot more to it than simply making cakes, especially since the business side of things can get confusing. As with other home bakery businesses in the united states, it’s critical to have the right insurance in place to protect you should anything go wrong.

Don’t forget or underestimate that fact that home bakeries have their risks. You will be working with potentially dangerous equipment, and as you’re preparing cakes for the public, you’re responsible for ensuring that it’s safe to consume. You are expected to adhere to health and safety measures, but things can still go wrong and insurance will protect you should that happen.

Ask yourself, if someone did get sick from your cake and won a lawsuit for $150,000, could you afford to pay the legal fees and judgment? If the answer is no, acquire insurance. Even if the answer is yes, please acquire insurance. As a home based business, you don’t want to have to reach into your own pocket to pay these business-related costs.

List of Insurance Policy Needed to Sell Cakes from Home

If you plan to sell your delicious cakes from home, it is important to acquire the necessary insurance. Note that failure to have the necessary types of insurance coverage could expose you to serious financial risk. Right before you start baking your cakes for sell; carefully consider the various types of insurance mentioned below to reduce your risks.

  1. General Liability

Indeed there are many scenarios where a customer can fall into harm’s way. A customer may slip and fall or get sick from the cakes you make, and your home based business could get sued. General liability covers majority of situations where a customer would want to sue.

  1. Product Liability

Product liability insurance might be the most important type of insurance coverage needed for a bakery business working from home. Since the cost of medical treatment is very high, just making one customer sick from an improperly prepared food item could metastasize into a significant financial loss.

This type of liability insurance will help to minimize the amount of financial damages you will be responsible for in the case of a claim. If you plan to sell your cakes to a retailer or wholesale distributor, the retailer or distributor may require proof of product liability insurance before buying your products.

  1. Accident Insurance

If customers will come to your house for any tangible reason, then you will have to obtain accident insurance to cover this risk. Although your current homeowner’s insurance policy likely covers accidents that happen on your property, standard homeowner’s insurance policies will not cover losses related to a home-based business.

A lot of insurance companies in the United States will allow you to add additional coverage to your existing homeowner’s policy to cover your home business risks. Note that even if customers will never visit your home, you should notify your homeowner’s insurance of the home-based business; failure to do so may cause the insurer to cancel your coverage.

  1. Additional Insurance

Have it in mind that you may need to acquire commercial vehicle insurance if using your personal vehicle for deliveries or other business-related travel. Also, if you plan on hiring employees, you will need to obtain workers’ compensation insurance to cover any injury to your employees. In most states, you can choose to acquire workers’ compensation through a private insurance agent or through a government insurance program.

Meanwhile, Business-interruption insurance can help to minimize your losses if you are unable to work due to a covered event. For instance, if a fire destroys your baking equipment, business-interruption insurance will help to cover your lost income.

It’s very important to note that state and local jurisdictions may mandate you to obtain specific types of insurance or levels of insurance coverage when starting a home bakery business.

Howbeit, it’s always advisable that you contact your local agency that issues business licenses for more information on any insurance requirements that may apply to home-based food businesses. In general, the costs of any insurance required for the business will create a tax deduction that will help to offset the expense of the insurance.


Indeed there is so much to think about when planning to start a small home based business, and when you’re working on your own it can be easy to forget or even miss some vital things.

And insurance is very crucial for protecting your business and livelihood should anything go wrong. Discussing your insurance with an agent or an attorney means they can help you find an insurance package that is right for you, making sure that you’re fully insured, and at the right price.