One of the costs of operating a commercial bakery is insurance. Like every business, you need general liability protection to cover injuries to your customers at your bakery. However, operating a bakery presents unique risks. It makes good sense to carry bakery insurance that is tailored to cover the specific risks associated with your bakery.
What Is Bakery Insurance?
Bakery insurance is a specialized type of business insurance designed for the risks commonly encountered in the bakery business. A bakery policy can be customized to meet the specific needs of your bakery. You don’t have to pay for insurance coverage that your bakery doesn’t need.
With the right bakery insurance, you can rest assured that your bakery has sensible insurance coverage that will protect you and your bakery from the risks that your bakery is most likely to face.
Factors Affecting The Cost Of Bakery Insurance
Bakery insurance is priced based on several factors that pertain to the business itself. The factors that are considered include:
- Number of employees
- Sales volume
- Whether you rent or own your bakery premises
- Location of the bakery (home bakery or commercial building)
- Number of bakery vehicles owned
- Driving records of your employees
Because each bakery’s insurance needs can differ significantly, these coverages are available cafeteria-style, meaning you can select what your bakery needs and decline coverage on other risks.
However, to save some money on the cost of premiums, you may want to buy a business owner’s policy. A business owner’s policy consists of policies and endorsements which are designed for specific industries, bundled and sold. In most cases, buying a packaged business owner’s policy lets you pay less for the premiums than you would pay for cafeteria-style coverages. A typical bundle, for example, is general liability insurance and commercial property insurance.
Depending on the factors outlined above, a rough estimate of the average cost for a business owners policy ranges from $65 to $79 monthly for a small at-home bakery with no employees. If you have employees and need to add workers’ compensation coverage, your premium cost will increase. If you need to add on coverage for business interruption, product liability, and other coverage options, your total cost will increase.
It would be a good idea to contact a knowledgeable agent to determine what risks you need to cover and the cost of the premiums. For a smaller commercial bakery with two employees, a ballpark estimate of the cost of insurance premiums could be:
General Liability/Business Owner’s Policy
Covers many of the primary business risks and some of the unique risks associated with being in the bakery industry. The cost of premiums ranges from $500 to $4,000 annually, depending on property values and revenue.
If you have any employees, this coverage may be required by your state’s laws. It covers work-related injuries such as burns, slip-and-falls, or other injuries that happen on the job. It provides your employees with the necessary medical coverage to treat injuries and illnesses with work-related causes. The cost of premiums ranges from $750 to $7,500 annually.
If your bakery offers delivery services or offers off-site catering, you likely need commercial auto insurance. It covers company-owned vehicles and state law may apply to require that you have insurance at the state’s minimum coverage levels or more. Premium costs are estimated at $1,800 per vehicle annually (depending on the number of employees driving them and their driving records).
If your bakery uses any form of technology to store customer data or transaction history, especially if it involves credit card records, cyber liability is a must. It covers any damages that occur due to a breach or employee negligence causing personal information to be stolen. Cyber liability ranges, on average, from $500 to $2,500.
Other Type Of Coverage To Consider
Additional coverage is available for bakeries. For more information about the cost of this additional coverage, you need to talk to a knowledgeable bakery insurance agent. An agent with experience in bakery insurance can estimate your costs and help you determine whether it makes sense to purchase any additional coverage for your bakery. The additional coverage includes:
Property coverage for businesses is available to protect against damage to personal property that you use in your baker. If you need flood insurance, that will be separately insured.
Consider building coverage if you own the building where your bakery operates. It insures you for damage to the building caused by such events as weather, fire, vandalism and certain other events.
Business Contents Insurance
This insurance covers damage to your bakery equipment, including kitchen appliances caused by covered events.
Equipment Breakdown Coverage
Your bakery depends on equipment such as ovens, refrigerators and mixers. They occasionally need repair or replacement. With this coverage, you can keep your bakery operating and have the cost of repair or replacement covered.
If the power goes out for an extended period, your refrigerated products can spoil. This coverage will cover the cost of replacement.
Income Loss Insurance
This insurance will provide an income stream to you if your bakery suffers a work stoppage.
Reach Out To The Bakery Insurance Experts At Southern States Insurance
Whether you are just starting up a bakery or looking for new bakery insurance for an existing bakery, be sure to contact the experienced insurance agents at Southern States Insurance. One of their agents can consult with you about bakery insurance coverage and their competitive premium rates.