If you own or are planning to operate a bakery shop in the near future, you will be surrounded by freshly made muffins, pastries, cupcakes, and cakes. Owning a bakery shop is a dream of many, and when you make that dream a reality, it can seem like nothing can or will go wrong. However, unforeseen events and accidents happen, even with the strictest of safety protocols — and when this occurs, you want to be properly protected. Risks of a bakery shop business include damage to equipment or the building itself, accidents that can occur indoors causing an employee or customer to become injured, or extreme weather conditions and natural disasters that lead to sufficient property damage. Obtaining bakery shop insurance is essential for the protection of your finances and the longevity of your business.
Types of Bakery Shop Insurance
A variety of types of bakery shop insurance policies exist in order to offer your business adequate protection and secure your financial future. Choose one or several of these policies for optimum insurance coverage.
Bakery shops have multiple risks that can cause harm to a customer, which is why general liability insurance is so important. General liability offers coverage in the case of a lawsuit as a result of a customer getting injured while in your bakery shop. For example, if there is a spill in the shop and a customer falls and sprains an ankle, they can turn around and sue you for damages. In this case, general liability coverage steps in and provides coverage for the costs.
Business Owner’s Policy
A comprehensive insurance policy that combines general liability with a variety of elective coverages is called a Business Owner’s Policy, or a BOP. Aside from general liability coverage, you can choose from a range of coverages to include in your BOP for well-rounded protection. For example, you can have additional coverage for your business building and the contents, and income loss. For example, if there is a natural disaster that causes damage to your building as well as the ovens and other baking equipment on your premises, the BOP will help to repair and replace contents.
As someone working in the food service industry, product liability insurance is vital. No matter how careful you are, something can go wrong with the baked goods you serve to customers. If a customer or employee becomes ill as a result of one of your pastries, product liability will help to cover the costs of litigation from being sued for damages.
If you have at least one employee at your bakery shop, you are required by your state law to obtain workers compensation insurance. This coverage will protect your employees from being responsible for medical expenses or income loss in the case of a work-related injury or illness. For example, if you have an employee that gets a burn from an oven, workers compensation not only covers the cost of medical treatment, but will provide income loss protection if they are out of work for a certain period of time.
If due to an accident, weather condition, or natural disaster, your bakery shop must remain closed for an extended period of time for repairs or to replace contents, you will be out of business income for quite a while. In this case, business interruption insurance helps to cover lost income to your business.
As a bakery shop, you most likely use a vehicle for business purposes, whether it is to deliver catered bakery goods for a party, or to pick up baking ingredients and other supplies. When a vehicle is being used for business, commercial auto insurance is required. With commercial auto insurance, you will have financial protection in the event of an accident. This insurance will cover the cost of repairs for the vehicle and other vehicles involved, as well as medical expenses for anyone that was injured. For some policies, commercial auto offers coverage for vandalism or theft as well.
If there was a fire, hurricane, or other type of unforeseen event in your area, and it caused damage to your building, property insurance is required. In the case of one of these events, your bakery shop’s building and contents can be protected and you will have assistance with the cost of repairs or replacements.
- Equipment Breakdown – Nothing will last forever, and this includes your baking equipment and tools. Equipment breakdown insurance covers the cost of repairing or replacing equipment due to unexpected breakdown.
- Spoilage – In a bakery shop, spoilage can cost thousands of dollars due to equipment malfunctioning, such as your refrigerator not working. Spoilage covers the cost of replacing any food lost.
Protect your dream of owning a bakery shop, by obtaining proper bakery shop insurance. After all of the hard work and money you put into your bakery, you should protect it with adequate insurance coverage.