Bakeries bring people much joy because of what they sell, but they are more than merely a collection of pastries and bread-based goods. Ultimately, a bakery is a business like any other. Therefore, they face risks and must always be properly protected against these liabilities. Fortunately, there exists a form of insurance for this type of business: bakery insurance. Here is a close look at what this is.
What Is Bakery Insurance?
Bakery insurance is designed to shield bakeries, donut shops, wholesale distributors, and other similar businesses from liabilities associated with property damage and the quality and edibility of the food products they sell. The cost of a bakery insurance policy may depend on several factors, including the size of the business, the kind of products sold, and the type of equipment used.
The Areas Of Coverage For Bakery Insurance
Some bakery insurance policies can be extremely comprehensive. Here are ten areas of coverage that may be included in this type of policy.
For bakeries and confectioneries, “property” includes the physical building where the business is located, its contents, and any equipment used to manufacture and sell products. Your bakery faces many risks and hazards such as fires, (building and kitchen) floods, and vandalism that can be covered through commercial property insurance. Kitchen fires may be caused by grease and oil from fryers and dust from baking ingredients.
Most general commercial liability policies include two types of coverage: premises operations and product liability. The former is also known as “slip-and-fall” coverage. The latter protects you against claims associated with food contamination, which can lead to customers suffering illnesses such as E. coli.
The equipment you use in your bakery may break down for several reasons. It may merely malfunction due to old age, or there may be a power outage. Incidents like these can halt production or force your business to close temporarily or even permanently. Equipment breakdown coverage can pay for all costs to replace or repair your machinery.
Much like other types of food products, most baked goods are perishable. Another consequence of a power outage is that all products kept in freezers and refrigerators may spoil after an extended time.
Loss Of Income
If your bakery closes down due to an event such as a storm or a fire, loss of income coverage can help you pay for monthly bills such as payroll and mortgage.
Bakeries often accept both cash and credit cards as forms of payment. You may be inclined to believe that your employees are honest, but the reality is that workers can sometimes steal money or engage in other types of unethical behavior. Employee dishonesty coverage will protect you against these types of incidents.
If your bakery has a website and allows customers to order online, it may be vulnerable to a data breach or other cyberattack. Cyber liability insurance can protect your business from computer fraud, cyber extortion, and cyber terrorism, among other attacks. It can also cover business interruption and electronic data restoration costs.
If your business owns or rents a delivery van or truck, it is recommended that you acquire insurance for it. Your drivers and vehicles may potentially face risks such as inclement weather and accidents with uninsured motorists.
This may sound like a strange name for a coverage area of a bakery insurance policy, but it can be extremely helpful. Inland marine coverage pays for damages to any equipment you own that is moved outside your primary location. So, if your business provides catering services, inland marine insurance would cover damage to items such as trays and food carts.
Bakery employees may face the risk of becoming injured because of things such as hot ovens, slippery floors, and high-tech mixing tools. Workers compensation coverage will protect you as a business owner in the event that an employee sustains an injury. In many states, this type of insurance is required if you have three or more employees.
Talk To The Bakery Insurance Experts
Reach out to the professionals at Southern States Insurance in Alpharetta, Georgia for more information on bakery insurance and its benefits. Since our founding in 1992, we have grown to become one of the largest, privately-held independent insurance agencies in the Southeast. We work with nearly every major insurance carrier and always strive to help our clients obtain the best possible value.
The cost of bakery insurance depends on multiple factors, including the number of employees in your business, your baker’s sales volume, and how many vehicles your business owns. It is highly recommended that you protect your property so that it does not sustain severe damage in a fire or another similar event. Be sure to also always remain informed of state and local guidelines on equipment maintenance.