Any business or sole proprietor that manufactures, distributes or sells baked goods needs bakery insurance. In general, bakery insurance ensures your business is covered if an incident occurs that causes a financial loss. This could include property damage, equipment breakdowns, or employee injuries, among other things.
What Does Bakery Insurance Cover?
Bakery insurance covers a range of policies. Your business may not require all policy options that are available and can customize your policy accordingly. The policies you need depend on your business’s size, specific business type, the number of employees your business has and other crucial factors. The most notable policy options include:
- Property Insurance
- Property and Food Liability Insurance
- Equipment Breakdown Insurance
- Food Spoilage
- Loss of Income Insurance
- Employee Dishonesty Insurance
- Cyber Liability Insurance
- Commercial Auto Insurance
- Inland Marine Insurance
- Worker’s Compensation Insurance
An experienced insurance agent can discuss your needs with you and determine the types of bakery insurance coverages that will benefit your business the most. Getting the right coverage and leaving out policy options that are not necessary for your business is important for securing the best rate possible.
Who Benefits From Having This Policy?
As mentioned, any business that relies upon the manufacturing, distribution or selling of bakery items or baked goods should have reliable bakery insurance. The most common types of businesses that require bakery insurance include commercial bakeries, home bakeries, mobile bakeries, wholesale distributors, donut shops and baked goods manufacturers.
A commercial baker produces baked goods in large quantities and typically has more than one oven or a large commercial-sized oven. A commercial baker may also have a separate bakery from their primary residence, unlike a home bakery (see below). Commercial bakeries take on more risk than home bakeries, and they need personalized bakery insurance to accommodate their specific needs and risks.
A home bakery is one that produces baked goods at their primary residence. Some states apply further restrictions and extend the definition to a baker that operates in their primary residence and only uses one oven. Home bakeries do not have as much risk as a commercial bakery, but they are still liable to losing profit and other liability concerns. Subsequently, a bakery insurance policy is essential for home bakeries. The policy is personalized to only provide coverage that benefits your business. This helps keep insurance costs low while providing adequate financial protection.
A mobile bakery is one that can move around, such as a food truck. Mobile units have certain risks that are unique from commercial bakeries and home bakeries. Some of these risks include accidents involving the vehicle and damage to other property caused by your mobile bakery. If you own a mobile bakery, then you can benefit from bakery insurance to limit your risk and ensure you are reimbursed for financial loss, which could otherwise cripple your business operations.
A wholesale distributor, also called a wholesaler, is a sole proprietor or business that purchases manufactured goods in bulk and sells them independently to the consumer. As it relates specifically to bakery insurance, any wholesaler that purchases baked goods in bulk and sells it to the consumer needs bakery insurance to remain protected financially. Wholesalers are different from a bakery as they do not create the baked goods themselves.
A donut shop (or doughnut shop) is a business that makes and sells donuts. This refers to a specific type of bakery, although it is one of the most popular types and has unique risks than other types of bakeries may have. Donut shops may seem low risk, but there are many ways in which unexpected costs may arise. Equipment breakdown and food spoilage are a couple of other ways in which a donut shop could be vulnerable to a devastating loss of income.
Baked manufacturers produce baked goods and distribute them either to a wholesale distributor or directly to the consumer. In any case, they have unique risks that distributors and bakeries do not have. Often, their risk is much greater as they are the ultimate source for producing the baked goods and rely upon multiple employees and reliable equipment. Bakery insurance protects baked manufacturers by covering them if unexpected financial challenges arise.
Work With The Bakery Insurance Professionals
Speak with one of our professionals at Southern State Insurance today to learn more about bakery insurance and start your policy. Bakery insurance is crucial for all types of bakeries, distributors and related shops and manufacturers, and we take pride in helping our policyholders protect themselves.