What Type of Insurance Does a Home-Based Bakery Need?

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What Liability Risks Does a Home-Based Bakery Face?

There are many risks associated with running a home-based bakery, including:

• A customer becomes ill from your baked goods due to allergens, contamination, or mislabeling – events that may lead to a product liability insurance for baked goods claim.
• A customer or visitor to your home-based business is injured in a trip and fall.
• Fire or theft damages your kitchen, inventory and merchandise, and equipment.
• A customer makes a professional negligence or mistakes in service claim against you after filling a custom-made order.
• A cyber incident – like a data breach or cyber-attack – affects your website and private customer payment info.
• The vehicle you use to make deliveries or supply runs is involved in an auto accident.

A comprehensive home-based bakery insurance policy is designed to cover these types of scenarios.

What Does a Home-Based Bakery Insurance Policy Include?

Depending on the scale of your operations, a Business Owners Policy (BOP) for home-based bakeries may be an ideal starting point, bundling core coverages into one affordable plan.

A BOP includes three essential insurance coverages:

1. General liability insurance to cover third-party bodily injuries and property damage caused by your company’s usual operations or that occur on your premises. General liability insurance usually includes product liability insurance to cover injuries or damages to customers or other third parties caused by the baked goods you create and sell.

2. Commercial property insurance to protect your home bakery, contents, and inventory from damage and loss caused by fire, water from a burst pipe, natural disasters, theft, and vandalism.

3. Business interruption insurance to cover your bakery’s lost income and overhead if forced to close your home-based business temporarily for repairs following an insurable loss, like a kitchen fire.

For seasoned home-based bakeries with larger customer bases or operations, a more comprehensive bakery insurance policy will include the three coverages above, plus:

• Equipment breakdown insurance protects the appliances and infrastructure in your dwelling that are part of your business’s operations—ovens, refrigerators, mixers, and HVAC systems. 

• Cyber liability insurance is necessary to cover damages following a data breach or cyber-attack that compromises your website, confidential customer information, cloud storage, and digital payments system.

• Commercial auto insurance for bakers is essential if you use your vehicle for deliveries, supply runs, or catering, as personal car insurance won’t cover business-related accidents.

• Errors and omissions (E&O) insurance for home-based bakeries provides protection if you make a mistake on a custom cake order, miscommunicate allergen information, or miss a catering deadline.

How to Get Home-Based Bakery Insurance Quickly

Zensurance is Canada’s leading business insurance brokerage, helping protect over 350,000 small business owners and independent professionals – including home-based businesses – with comprehensive, low-cost coverage.

Fill out our online application now for a free quote to explore your options.

Our team of brokers are insurance experts. They’ll shop our partner network of over 50 insurers to find the right policy for your home-based bakery, customize it to suit your needs and budget, and answer questions.

With Zensurance, you can have your cake and eat it too!