sweetlayers Posted 23 Feb 2009 , 9:47pm
post #1 of

Can you please share your experiences with your homebased bakery insurance. I have a few questions and would love some advice and your experiences with it.

I would like to know the price range for insurance on your homebased bakeries.

Is it a BOP?

Is it just liability?

Which insurance company do you recommend in your state?

Do you have to cover the same insurance as a caterer?

Is $500 per year too much to pay?

How quickly does it take effect?

Any other info would be excellent as well.

TIA

25 replies
enoid Posted 23 Feb 2009 , 9:53pm
post #2 of

Good questions. I too need the answers to them. Here's a bump.

ziggytarheel Posted 23 Feb 2009 , 9:55pm
post #3 of

Not a for-profit or licensed home bakery. Work in insurance, however.

Insurance is never one size fits all. There are so many variables for each situation. Your best bet is to figure out what you need and call around for comparable quotes. That's the only way to get apples to apples comparisons.

What kind of building you are in, where your building is, how much liability you need, your personal and/or business credit history, how much property you need to insure and the deductibles you want...all of these play in to that final figure....among other issues.

And let me say again that your credit history is becoming more and more important in the insurance industry, among other places. The better your history, the better rates you can have.

leah_s Posted 23 Feb 2009 , 10:00pm
post #4 of

I pay about $550 for $2 million in liability. For some reason it was the smallest amount of coverage available. I only wanted $1 m.

OhMyGanache Posted 23 Feb 2009 , 10:05pm
post #5 of

I pay $25/mo. for $2M in liability.

loriemoms Posted 23 Feb 2009 , 11:31pm
post #6 of

We pay about 500 a year...we have full business insurance (it has some name, I will have to ask my DH) It covers libabilty, it covers if the house burns down and I loose income, it covers if someone falls down on my front steps, etc etc. The policy is pages and pages long! And the peace of mind is worth every penny.

azeboi2005 Posted 23 Feb 2009 , 11:50pm
post #7 of

leahs...what you are paying is a great price for the amount of coverage you are getting. i too work in the insurance industry, what happens a lot of times with companies is that they will only offer the high amounts of liability due to industry standards; they take into account high volume bakeries and pool those together look at loss ratios, amounts paid, and generate their pricing. the difference between a $1M policy and $2M isn't much so they'd rather offer the high liability amount only. do any of you have umbrella policies? those would be something to look at as to protect your being that yal are sole proprioters.

springlakecake Posted 24 Feb 2009 , 12:11am
post #8 of

I am excited to run across this thread. I am about ready to open shop and I need to get some insurance. I will be working out of a licensed (separate) home commercial kitchen. I will be the only member of my LLC (otherwords no employees). What specifically should I ask for when I call?

sweetlayers Posted 24 Feb 2009 , 2:03pm
post #9 of

OK--

Just so you know, for those of us in the South, State Farm won't cover it!

-K8memphis Posted 24 Feb 2009 , 2:36pm

I love my insurance lady. She wrote me a little business rider years ago that was tacked onto my homeowner's. Now that I am aiming to bake from the church where I run the bookstore, I have a 1 mil policy that covers my home which is loaded with equipment that is basially never used and it also covers the church. It's $350 a year. Guess what, SweetLayers, State Farm!

Anybody want my insurance agent's name??? She's cool! She told me before that she's written policies all over the country. Pm me if you want her info.

loriemoms Posted 24 Feb 2009 , 3:16pm

Our policy is with Hartford..it is a restaurant coverage policy, that covers loss of equipment, libablity, loss of income, and such. We used to have one tacked on to our home owners, and when we moved to our new home, we asked about tacking the libility to our new insurance policy (also State Farm) and was also told such an item only covers if someone falls down your front stairs and gets hurt, and covers loss of things like pots and pans (just like loss of things like your couch and tv) but it does not cover if someone gets sick, or if you have loss of income due to that fire, or earthquake or hurricane that destroyed your business. Its is much more geared to a business, and a cooking business at that. So be careful and ask that your agent give you a full write up of what exactly si covered!!

-K8memphis Posted 24 Feb 2009 , 3:21pm
Quote:
Originally Posted by loriemoms

Our policy is with Hartford..it is a restaurant coverage policy, that covers loss of equipment, libablity, loss of income, and such. We used to have one tacked on to our home owners, and when we moved to our new home, we asked about tacking the libility to our new insurance policy (also State Farm) and was also told such an item only covers if someone falls down your front stairs and gets hurt, and covers loss of things like pots and pans (just like loss of things like your couch and tv) but it does not cover if someone gets sick, or if you have loss of income due to that fire, or earthquake or hurricane that destroyed your business. Its is much more geared to a business, and a cooking business at that. So be careful and ask that your agent give you a full write up of what exactly si covered!!




Yes the little rider was all I needed at the time.

Currently I do not have key person coverage--but I don't need it now either.

ziggytarheel Posted 24 Feb 2009 , 9:51pm

I just want to tell all of you to be careful and not assume coverage. Make sure you see it spelled out in black and white. Read all the exclusions as well. You want to be sure that you have the coverage you need if you ever need it.

Some agents are more honest, more careful, more diligent than others.

Please read your policies. And watch for changes at renewal!

sweetlayers Posted 26 Feb 2009 , 1:49pm
Quote:
Originally Posted by ziggytarheel

I just want to tell all of you to be careful and not assume coverage. Make sure you see it spelled out in black and white. Read all the exclusions as well. You want to be sure that you have the coverage you need if you ever need it.

Some agents are more honest, more careful, more diligent than others.

Please read your policies. And watch for changes at renewal!




Thank you. This is such good advice.

deb12g Posted 26 Feb 2009 , 7:24pm

I am in Louisiana, insured with Hartford. $2million for $250/year, which I thought was VERY reasonable!

giggysmack Posted 18 Mar 2009 , 3:33am

Wow business insurance is cheap cheap in the US I pay $1180 a year and I have good credit. I called around and was told that no one could beat it. If any other Canucks read this and have other insurance options I'd love to hear it!!!

jlsheik Posted 18 Mar 2009 , 3:50am

I am in Oklahoma. I open the doors on April 1st for my new business...my policy is a business owners policy w/ 1.5 m in coverage...500$ a year. I was pleasantly surprised I thought it would have been higher than that. I wish my car ins was that cheap!

indydebi Posted 18 Mar 2009 , 3:58am

Let's be sure we're comparing apples and apples here. I pay over $3500 a year ..... that means I have to put back $10 every single day toward my annual insurance expense .... in my various insurances. There's liability, which is the $250-$500 range. Plus your commercial auto policy (which you can expect to run you twice, three times or more, than your personal auto policy), tenant's insurance or building insurance, insurance on the fire systems and kitchen equipment, fire coverage, loss of income coverage, loss of kitchen use coverage, etc.

There's a lot more than just a $250 liability policy that's needed. Even if you are a home baker, check with your agent at least on the requirements for commercial auto and equipment coverage.

flamingobaker Posted 18 Mar 2009 , 11:37am
Quote:
Originally Posted by sweetlayers

OK--

Just so you know, for those of us in the South, State Farm won't cover it!




I'm posting before reading everything,...

sweetlayers, that's interesting because I have State Farm here in Ohio.

I pay $224 for $1mil in liability, plus $1000 on supplies. (I'm at home, not a sep. kitchen). I got a discount 'cuz our homeowners ins. is thru same company.

jlsheik Posted 18 Mar 2009 , 2:45pm
Quote:
Originally Posted by indydebi

Let's be sure we're comparing apples and apples here. I pay over $3500 a year ..... that means I have to put back $10 every single day toward my annual insurance expense .... in my various insurances. There's liability, which is the $250-$500 range. Plus your commercial auto policy (which you can expect to run you twice, three times or more, than your personal auto policy), tenant's insurance or building insurance, insurance on the fire systems and kitchen equipment, fire coverage, loss of income coverage, loss of kitchen use coverage, etc.

There's a lot more than just a $250 liability policy that's needed. Even if you are a home baker, check with your agent at least on the requirements for commercial auto and equipment coverage.



That 500$ business owner's policy does cover all that, Indy...just not the Auto Ins. and I am leasing the building...Now you have me questioning it but I know it had 10,000 cov for equipment....I will have to check it out...Indy you all was have all the info!

ziggytarheel Posted 18 Mar 2009 , 2:59pm

Sorry to keep popping in here, but I want to say again that you cannot just say, "I have business insurance and it costs $X" and really know what you are comparing. That's like saying, "I have car insurance and it costs $X". With a car, that would tell you nothing, really. You need to know the make, model and year of the car, if there are other cars (for a multi-car discount), if the home is also with the same company (for a home/car discount), what your driving record looks like, if there are any other drivers on the policy and what their records look like, if there are any inexperienced drivers, what your payment history looks like and what your credit looks like and what types of coverage and coverage amounts do you want THEN you can think about making comparisons. Sorta.

What is covered on your policy? What isn't covered? What are your deductibles? That's for starters. Please listen to Indy. Know what you are covered for. What are your liability limits? Is there a deductible applied to that (with some companies that happens)? What is your coverage for business personal property? What is your deductible? What kind of coverage do you have for any scheduled items? What are your gross sales? Your payroll? Do you own your building? Are you properly insured? If you do not have the correct type of coverage for a business in your home and you burn the place down, you may be homeless. What if a tornado hits your place of business? Do you have coverage to replace your lost income?

All of this is just for starters. Please know what your needs are and be sure that your policy meets those needs. Things do happen! I've seen someone leave a pot on the stove in an office and burn down the entire building. Don't you know they were thankful that they were properly insured, since they were liable for ALL of the damage to the entire building?

Just wanting to help all my dear cake friends. icon_smile.gif

zoey2jack Posted 18 Mar 2009 , 8:11pm

I have recently been inquiring through my insurance company about business liability insurance as well as the dwelling and contents. My insurance agent said it would run about $80 a month for both and that is with $1M in liability and I can't remember exact amount on property since I haven't started building. I just wanted a basic estimate. One thing that she told me that I had no idea about is that I have to deed a portion of my property to myself that the bakery will be on. She said this is a must and that if an agent came out for any reason and saw that I had a business on my property that they could drop me. I don't know if this is the same for other companies, but I would definitely make sure before you started. Good Luck!

ziggytarheel Posted 18 Mar 2009 , 8:31pm
Quote:
Originally Posted by zoey2jack

One thing that she told me that I had no idea about is that I have to deed a portion of my property to myself that the bakery will be on. She said this is a must and that if an agent came out for any reason and saw that I had a business on my property that they could drop me. I don't know if this is the same for other companies, but I would definitely make sure before you started. Good Luck!




I'm not exactly sure about this one, but laws do vary from state to state. But regardless, this does bring up an important point. All insurance is not the same and just "having insurance" doesn't necessarily mean you are covered for anything!

Insurance is a specific contract. There are specific things required of you and specific things the insurance company says that they will do for you. If your contract (insurance policy) isn't for the coverage you need or want, you have no coverage. Repeating here, just having insurance is not enough.

And, if you do not disclose things asked for, or if you lie in your application, you will have ZERO coverage. If you have a big claim, you better believe that the company (and perhaps its fraud unit) will go over your policy with a fine tooth comb. Were you asked if you have any felony convictions and you "fudged"? No coverage. Do you get the picture? If your policy is simply a homeowner's policy that EXCLUDES businesses, and your business causes damage to your home....that would be a very sad day for you. If your auto policy is personal ONLY and does not cover business use and you cause a major accident with tremendous losses...you will be up the proverbial creek.

This is why I keep harping on all of this. I get concerned about what I read here. Know what you need, read your policy, and be sure you have what you need! icon_smile.gif

indydebi Posted 18 Mar 2009 , 8:43pm

I'm going to echo what ziggy is saying. TALK TO YOUR AGENT!

I see so many insurance threads where folks are asking "what company do you have your coverage with?" No one buys insurance directly thru the insurance company (unless you're buying the lizard coverage) .... you buy thru an agent. THE AGENT is the resident expert in this field and he/she will talk to you and explain the coverages you need according to the state laws.

I never walk into my agent's office and tell him "I want to buy a Hartford policy". I tell him what I need to cover and he knows which company will do the best job for me.

TALK. TO. A. LICENSED. AGENT. Insurance is a legal contract. Don't go to court without a lawyer. Don't buy insurance without an agent.

sweetlayers Posted 19 Mar 2009 , 2:23pm

I'm glad to see this thread back in the lime light with some serious discussion. Thanks again for all the advice, suggestions and personal experiences you are sharing.

SugarLover2 Posted 19 Mar 2009 , 2:38pm

I am also an insurance agent and happy to see this thread. Although, I have to admit, seeing it here on CC (where I go to escape insurance) is kinda ironic. lol

Surely though, talk to your agent, talk to more than one agent. Ask lots of questions and what if's and shop around to get the coverage that you need. Not all agents are created equal unfortunately. And, some companies that write commercial insurance have the ability to wiggle a little in the premiums so don't be afraid to let them know you are shopping around. Right now are hard times for everyone, including the agents. Alot of them will work to get your business.

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