The Fresh Loaf

News & Information for Amateur Bakers and Artisan Bread Enthusiasts

Necessary Insurance for Home Based Bakers

sshipper's picture

Necessary Insurance for Home Based Bakers

Dear Friends,


I will soon have finished my inspection as a Home Based baker.  The Agriculture dept could not recommend on what is important for home baked bakers,  re: insurance.  Anyone out here who has recommendations and some idea of cost would be appreciated.

Any other perimeters or words to the wise are sought.




cookingwithdenay's picture

Many "local" insurance agencies do not routinely provide food product liability insurance; however depending on your products and where you live in the U.S. it may be easy or difficult for you to locate the type of coverage you will need to sell your product to the public.

Below is an agency that will work with "any" local or private insurance agency to discuss the writing of a food product liability policy. They will require several specific pieces of information to help them determine which coverage is best for you.

Annual Premiums for Food-Product Liability Insurance Coverage Ranged from $500 to $20,000 (Some premiums may be lower depending on where you live in the U.S.)

Check with your local bank for product insurance recommendations, they can often refer you.

The Most Significant Factors Contributing to an Annual Premium may include:

* Level of Gross Sales or Annual Payroll (May be estimated)
* Prior Claims/History (If you were previously in business)
* Level of Coverage (Don't skimp)
* Specialty Market
* Type of Product
* Type of Market
* Recall Plan


LindyD's picture

I take it you have homeowners insurance, so that's where you should start:  your own insurance agent.

If your agent can't make recommendations, then he/she surely can refer you to someone who can.   No matter how rural our location, we are still served by businesses that sell foods, be they baked goods, groceries, or restaurants.

Location plays a part in the cost of insurance premiums.

mimifix's picture

Greetings Stephanie,

As Lindy stated, contacting your agent about homeowners insurance should cover the issue of insuring your production facility (your house). Some companies consider home-baking already covered whether it's for business or pleasure. Other companies may want a rider.

Vendors insurance is different. Those policies will cover your products when they are on the market. Non-hazardous baked goods (not needing refrigeration) are low risk, but still a risk in our culture of "shaking the money tree."

Vendor insurance rates differ from one location to the next. Some larger cities appear to have a much higher rate than smaller municipalities. (In NYC some businesses find it impossible to even get insurance.) You'll need to make inquiries from numerous insurance agents until you find the best policy that fits your needs. Your homeowners insurance agent may be able to recommend where to start.

Best regards, Mimi

turosdolci's picture

I agree that not all insurance companies offer insurance if you have this type of business at home.  In fact you need to be very careful even when talking to your home insurer, because if you have started a business and have inventory, they may cancel your insurance. This happened to us and we had to find a new insurer who attached an adendum to our policy. However we have limited packaging inventory in our business.  Before talking to your agent, check out the website to make sure that they offer it.

Many customers especially restaurants, caterers etc. won't do business with you if you do not have liability insurance, so it is important to clear this up before you get started. This could be costly so make sure you figure it into your costs when pricing out your product.



breadman94's picture

We have many of home based bakers in our area please feel free to contact me. I can help Thanks

LindyD's picture

Licensing information is readily available at your state's website.  Specifically:

There appears to be other helpful info there.

dulke's picture

Your homeowner's insurance will not cover business risks unless your policy is endorsed to cover business operations out of your home. So if someone comes to your home for a business meeting to, say, arrange for weekly delivery of goods, and is injured in your home, your homeowners insurance will likely not cover it.

A businessowners policy (BOP) would cover the equipment that is devoted to your business - equipment, supplies, and property in transit, as well as the liability exposure from your business, including products liability (i.e., injury allegedly arising from your products). A vendors endorsement on the policy would provide coverage for the stores that sell your goods. Contractual liability coverage within the businessowners insurance provides some coverage, but is a bit tricky - the vendors endorsement provides better coverage for you and your distributors.

The insurance agent that handles your homeowners insurance may be able to help you. Otherwise, look for a independent insurance agent that specializes in small businesses to get a variety of quotes.

Please also remember that insurance does not cover all the things that can happen. If, for example, a state agency pulls your goods because of alleged contamination, the loss of product might or might not be covered by the BOP - it depends on how the contamination was introduced. A hearing on your license or penalties assessed for not meeting codes most likely would not be covered. I know it is hard to set aside money when you are starting up, but do try to build a fund to cover unanticipated expenses.

I hope this helps. I don't sell insurance but I work in the industry in a different capacity and have a fairly broad background.

idiotbaker's picture

I got great rates for my business here.  Don't know if they can help you but thought I would pass it on.

joyfulbaker's picture

Looks like I'm late to the party.  I am a home-based baker running a cottage food organization in Northern California.  I purchased FLIP (food liability insurance).  Here's the website: --Joy

Annabella's picture

We are normally depends on insurance for all types of work to avoid all the misfortunes, So we just need to look all over to get the best insurance that will suitable to us as well as the terms of the insurance parties who have created them. So just have a look here to know about the new kind of Insurance that i got from here.The Best Insurance that suitable to me and let my work done in an easy way.

HomeBizIns's picture

A LOT OF GOOD POINTS MADE HERE! The only thing I would like to add is that regardless the size of your business, please DO NOT underestimate the importance of insurance. There are multiple insurance options out there and policies can vary differently depending on the company. I recommend compiling a list of questions to address with each insurer. This will help you determine if your specific business needs will be met by that policy. General Liability, Product Liability, Business Interruption and Business Personal Property are coverage's you should keep in mind. A BOP (Business Owners Policy) will mostly address all these for your business. If you are home based and looking for an insurance market, Licensed in All 50 States, visit (