Whether you are planning to open a new bakery business or shopping for new bakery insurance, make sure you speak with an insurance agent who is an expert on bakery insurance. You may not be aware of the range of coverage that designed to cover a bakery business’s unique risks.
Bakery Insurance For Your Bakery
When you are shopping for bakery insurance, you will find a wide range of coverage available. Every bakery owner needs to decide which risks they ought to cover. Although nearly every bakery business is subject to similar risks unique to the bakery industry, not every bakery needs identical coverage. For example, nearly every business needs general liability insurance to cover the risks of injuries to customers who visit the baker. Some states require that coverage as a condition to granting a business license. However, very small bakeries have only one (or none) employees. Those bakeries do not need to buy workers comp insurance.
One policy to discuss with your insurance agent is whether a bakery business owner’s policy that bundles a variety of policies and endorsements designed for bakeries could satisfy the needs of your bakery. Such a policy is often available at lower costs than the premiums if purchased a la carte.
Questions To Ask When Acquiring Bakery Insurance
To help you identify the risks your bakery needs to cover, you should be prepared to discuss your bakery business in detail with your insurance agent. The agent will need specific information about your sales volume, the number of employees your bakery has, the number of vehicles your bakery owns or operates, the location of your bakery, and more. Once the agent has that information, the agent can give you recommendations about the scope of coverage you need, along with a fair estimate of your premium costs.
During your consultations with the agent, make sure you can discuss the answers to the following questions:
What Risks Does Your Bakery Need to Cover?
Help prepare for the discussion with your agent by making a list of the various risks your bakery faces on a regular basis. Jot down your sales volume and revenue. List the bakery’s assets, such as owned (building, property), equipment owned and leased, inventory, vehicles owned and leased, and so on. Estimate the value of those items.
Ask your agent about the common types of risks a bakery like yours should insure against. Suppose your bakery does not have any risks that are unusual for a comparable bakery business. In that case, you should ask if you can save money on premiums by buying a business owners policy. A business owners policy is one that bundles standard bakery policies and endorsements in a single package.
How Many Employees Will Your Bakery Have?
Whether you have employees will determine whether you need to have workers compensation insurance. If your bakery has employees, your state law may require your baker to have workers comp insurance to cover expenses for employees injured on the job.
Will You Run an At-Home Bakery?
If you operate your bakery out of your home, your agent may want to know if your homeowners insurance covers any of the risks. If you own your home, your homeowners policy probably covers weather events and fire. However, most homeowners insurance does not cover many of the risks of a bakery business, and some policies exclude all business activities from coverage.
With regard to fire or flooding that could occur in your at-home bakery, think about the various sources of ignition, such as your ovens, electrical wiring, HVAC systems, and your refrigeration equipment. Also consider how much combustible material is there, such as gas fuel, grease, frying oils, flour dust, and packaging materials. Finally, think about the age and condition of your home wiring and your plumbing.
Does Your Bakery Plan to Own or Operate Any Vehicles?
If your bakery will need a vehicle to deliver your products, shop for supplies, attend meetings, or need one for any bakery business, you will need to insure them. Your agent will want to see the driving records of any employees who will operate those vehicles to determine the cost of that insurance.
Does Your Bakery Qualify as a Small Business?
If your bakery qualifies as a small business, you may be eligible for certain small business financing and get special insurance rates. Your insurance agent can discuss that in detail with you.
What Other Risks Should You Consider?
Other risks that your bakery may need to insure against include:
- food spoilage: covers the expense associated with losses caused by food that spoils due to the loss of refrigeration during an extended power failure.
- equipment breakdown: protects you against equipment failures.
- product liability: protects you if a customer gets ill from consuming your product.
- cybersecurity: protects you against computer hacks and identity theft.
Speak To A Bakery Insurance Agent At Southern States Insurance
Get all of the insurance your bakery needs but don’t pay for more than it needs. Consult with the bakery insurance experts at Southern States Insurance for more information about their competitive rates for bakery insurance.