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What is Bakery Shop Insurance?


If you are the proud owner of a bakery store or about to become one, then finding out what type of insurance coverage you need to buy is essential. Most bakery shop owners will employ help, and if you do, there are specific types of coverage you must buy to protect your workers and yourself. Here, we explain the best insurance to buy for bakery shop owners.

What types of coverage does a bakery store need?

Regardless of the size of your store, as a bakery owner, you need to protect your business, your personal finances, and assets, along with your staff and your clients. Buying insurance for a bakery isn’t always straightforward, and this is why we wanted to outline the best types of commercial insurance you can buy for a bakery.

#1 Bakery Business Owner Policy – BOP

A Business Owner Policy is one way you can quickly and easily save money buying bakery shop insurance. A BOP will combine many types of bakery shop coverage into a single policy, and as such, it is often cheaper than buying these policies individually.

Most BOPs for bakery stores will include general liability coverage and commercial property insurance. In some cases, depending on the insurance company you choose, you may also receive business interruption coverage as part of your Bakery’s business owner policy. With this, you get coverage for any third-party liability claims for personal injury or property damage. The building you are based out of is also covered against a range of perils, and your inventory, equipment, and furnishings (if you have any) are also protected. If business interruption insurance for your bakery is also included, then you will also be covered should your business be unable to open because of a ‘covered’ event that impacts your business premises, then you can also claim some of your lost income via this policy.

#2 Commercial Property Coverage for a Bakery

Given the very nature of the work you do and the services, your bakery provides, buying commercial bakery insurance is key. Without your building, it’s unlikely you would be able to operate your business. Other key aspects of a commercial insurance policy for a bakery include the coverage that is given to your expensive bakery equipment and your stock.

If you are ready to buy commercial insurance for your bakery today, be ready to answer a few questions about the optional extras that your bakery might need. Here is a quick run through the additional coverage choices that your bakery will be offered when you buy a commercial insurance policy.

Equipment Breakdown – It goes without saying that your bakery will probably be dependent on its equipment. Without working ovens, as just one example, operations can grind to a halt. This is why so many bakery shops buy insurance for their equipment.

Utility Interruption – Having a fully operational set of utilities is key. Your water, electricity, and gas are the energy that powers your business. If these services are interrupted, it might impact your bottom line.

Sewer Back-Up – A backed-up sewer or drain is usually a common exclusion in commercial property insurance for a bakery. However, this optional type of coverage provides essential protection that will help your bakery recover quickly should a sewer back-up into your premises.

Spoilage – If the refrigeration equipment in your restaurant fails or shuts off completely due to a power cut or other event, any food you are storing could be classified as unusable. You can buy extra bakery insurance coverage for spoilage to cover any potential spoilage losses.

Employee Theft – As a trusted member of your workforce, your staff will have the easiest access to your cash, and company property.  In most commercial insurance policies, employee theft is classified as an exclusion. This optional extra will give you coverage for any employee theft.

#3 Liability Coverage for a Bakery

As the owner of a bakery who wants to buy the right insurance, you need to consider where you and your business face the most vulnerabilities. For instance, having general liability coverage is essential. Usually, you will find that product liability coverage is included within this type of policy, but as you make, sell, and potentially also distribute your products, you should talk with a commercial insurance agent who is experienced selling insurance for bakeries or restaurants. You need to buy product liability coverage for your bakery to ensure you have the right level of protection from any insurance claims that may arise from food-borne illness.

#4 Employee Insurance for Bakers

If your bakery business hires staff, then you will need to buy insurance to cover their medical expenses in the case of an accident at work or the development of a work-related illness. This is called Workers Compensation Coverage, and it is a legal requirement for your business to have this coverage in place.

Please check with a local commercial insurance expert about the state-specific requirements in your area.

How Much Does Bakery Insurance Cost?

The cost to insure a bakery will depend on the type of coverage you buy, along with the levels of coverage you choose. If there are any added extras, such as those we have mentioned on this page, then this may also impact the price you will pay as well.

The type and age of your property, the time you have been in business, the age and value of your cooking equipment, the number of staff you employ, and the location of your bakery can also factor into the cost of buying a bakery insurance policy.

If you want to know the exact cost to insure your bakery, talk with a local commercial insurance expert today. They have a great understanding of the insurance market and can often give you practical advice about the best levels of coverage to choose from.


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