Working in a bakery often comes with its own potential issues and unforeseen events. It goes beyond just mixing flour and sugar together to create something edible for consumers. To protect yourself against certain risks and damage while working in a bakery, it is an ideal option to get bakery insurance.
If you own a bakery, café, donut and bagel shop, pastry shop, wedding cake shop, in-home or mobile bakery, or any other elated bakery shop, bakery insurance is a must-have for you.
In this article, we aim to shed more light on bakery insurance, what it covers, what it does not cover, the cost of getting it, and other valuable tips that would help increase your knowledge. If you do not want to miss out on important information, ensure you read to the end of this article.
What Bakery Insurance Covers
Bakery insurance offers a wide range of coverage that protects policyholders against certain risks and financial ruin. If you own a bakery and you seek bakery insurance that offers comprehensive coverage, the best place to start is the Bakery Owner’s Policy (BOP).
BOP is a combination of three essential coverage types, such as:
- General Liability Insurance: This is also known as business liability insurance; it covers property damage and accidental injuries that occur within the workplace. General liability insurance will help to cover medical expenses and legal costs in the event of a lawsuit. Furthermore, it covers issues like reputational harm, advertising injury, and copyright infringement.
- Commercial Property Insurance: This covers building and property damage such as fire, theft, vandalism, and severe weather issues. It also covers business items such as furniture, ovens, refrigerators, display cases, supplies, and business records.
- Business Interruption Insurance: This type of business owner policy offers financial protection and coverage for lost income in a situation where the business owner has to shut down the bakery temporarily due to a severe issue not covered by the policy. It would cover expenses related to the temporary relocation of the bakery.
These are just the major types of business owner policies; other types include:
- Commercial auto insurance.
- Commercial umbrella insurance.
- Cyber Liability Insurance.
- Equipment breakdown insurance.
- Hired and non-owned auto insurance.
- Workers’ Compensation Insurance.
What It Does Not Cover
There are certain risks your bakery insurance does not offer protection for. They include the following:
- Infectious disease.
- Intentional or fraudulent acts.
- Wrongful termination.
- Flood and earthquake damage.
- Government seizures.
For flood and earthquake damage, you will have to obtain a separate policy that will help cover the cost of losses and damages incurred from floods or earthquakes. Also, you can only receive coverage for wrongful termination if you have employment practices liability insurance.
It is essential to review the terms provided by your insurance provider. This will enable you to determine what it covers and its limitations.
How Much Bakery Insurance Do I Need?
The amount of bakery insurance you need largely depends on your individual needs and preferences. Also, you will need to factor in the specific risk that affects your business to determine how much insurance you need.
However, we recommend that you start with a Business Owner’s Policy (BOP), which encompasses a wide range of coverage and offers protection against issues like accidental injuries, lost income, property damage to others, and destroyed business property.
You can also add more coverage types to your BOP that would offer protection against other types of coverage not covered by BOP.
How Can I Get Bakery Insurance?
Typically, the first thing to do is identify the type of coverage needed, including the risks your bakery faces. Once you identified this, it would help you determine the amount of insurance that would be adequate for your business.
Proceed to explore several quotes that suit your needs and budget. You can search for the best quotes online or through an insurance agent. By doing this, you will be able to weigh down your options and settle for the best coverage at competitive rates. Once you’ve found the best quote, review the annual policy of our insurance provider to ensure you are adequately covered against certain risks.
How Much Does It Cost to Get Bakery Insurance?
There are several factors that determine the cost of bakery insurance, such as:
- Previous claim history.
- Your business location.
- Company assets.
- Number of employees.
- Policy types and coverage limits.
All of these adversely affect the cost of bakery insurance. If you have a history of making business insurance claims, you will most likely be asked to pay a higher amount for insuring your bakery business.
Your business’s geographical location also determines the cost you will be charged when obtaining bakery insurance. It is believed that bakeries in urban areas face higher risks compared to bakeries in rural areas.
Also, your revenue and assets will be factored in to determine how much your insurance company will charge you.
Nevertheless, the cost of bakery insurance is about $65 monthly for BOP, and according to Insureon, bakery owners pay about $165 per month for workers’ compensation insurance.
