Liability Insurance??

Business By brensmom12 Updated 6 Apr 2010 , 5:40pm by CookieMeister

brensmom12 Posted 6 Apr 2010 , 1:35pm
post #1 of 18

I am getting my kitchen certified (I live in VA) and after that is complete I will be getting my business license as well. I am going to get liability insurance, but was wondering about how much to carry and what is the annual premium for that? Just wondering if any one else with a home bakery has any other suggestions. Thanks!

Cat

17 replies
leah_s Posted 6 Apr 2010 , 1:37pm
post #2 of 18

Check into State Farm if they're in your area. $250 a year, specifically for home bakeries, $1 mil per incident, 2 incidents covered per year.

brensmom12 Posted 6 Apr 2010 , 2:18pm
post #3 of 18
Quote:
Originally Posted by leah_s

Check into State Farm if they're in your area. $250 a year, specifically for home bakeries, $1 mil per incident, 2 incidents covered per year.




Thanks for the reply. That's what I was figuring and we use state farm for our vehicles. Appreciate it!

Kitagrl Posted 6 Apr 2010 , 2:27pm
post #4 of 18

Oh you are so lucky, only $250? Wow!

I think we are in a "High Risk" area because its hard to find good insurance around here, for fair prices. I have 2 mil of home baking business insurance through Zurich but its like $600/yr. Covers liability and also loss of business somehow, not sure all the details on that...but like if everything burns down or something, it covers something...but then my content insurance does too.

leah_s Posted 6 Apr 2010 , 3:35pm
post #5 of 18

I used to have a similar policy Kita. What I later found out is that the company had a $500 minimum policy payment amount. No matter if the policy really only cost$300, you had to pay their minimum. Sort of like a lot of us do with cakes. Also, you don't need the loss of biz insurance, IMO, especially for what it costs. And double insuring our contents does not mean you'd get paid twice in the event of a total loss. it means the insurance would split the liability and payment to you.

Speaking of risk, I live in a large city, and I mean practically downtown.

Kitagrl Posted 6 Apr 2010 , 3:51pm
post #6 of 18
Quote:
Originally Posted by leah_s

I used to have a similar policy Kita. What I later found out is that the company had a $500 minimum policy payment amount. No matter if the policy really only cost$300, you had to pay their minimum. Sort of like a lot of us do with cakes. Also, you don't need the loss of biz insurance, IMO, especially for what it costs. And double insuring our contents does not mean you'd get paid twice in the event of a total loss. it means the insurance would split the liability and payment to you.

Speaking of risk, I live in a large city, and I mean practically downtown.




My husband talked to the insurance agent and as far as we understood, Zurich was really the only one who offered this type of insurance. Maybe I will have him call and ask the agent about State Farm. That's a huge difference in price... as far as the loss of business...it was just tacked onto the policy, I didn't have a choice of "only liability" or anything or I would have chosen that...it was "it is what it is". Definitely going to ask about State Farm. I have a bad feeling they won't offer it but doesn't hurt to ask.

ContemporaryCaker Posted 6 Apr 2010 , 3:55pm
post #7 of 18

I am glad you asked the question. I have been wondering the same thing myself. How do you go about getting your kitchen certified? I live in florida and honestly have not looked up the rules and regs yet. I dont even know where to start looking. I guess I better get in it in gear. Good luck with the certification!

bobwonderbuns Posted 6 Apr 2010 , 4:10pm
post #8 of 18

Agreed, this is a good topic for discussion. Thanks for posting! icon_biggrin.gif

brensmom12 Posted 6 Apr 2010 , 4:10pm
post #9 of 18
Quote:
Originally Posted by ContemporaryCaker

I am glad you asked the question. I have been wondering the same thing myself. How do you go about getting your kitchen certified? I live in florida and honestly have not looked up the rules and regs yet. I dont even know where to start looking. I guess I better get in it in gear. Good luck with the certification!




Check the sticky about which states allow home based bakeries. VA is one of them. I went to the health department and they forwarded me to an extension office from the Dept of Agriculture. Basically you turn in all your recipes (very detailed) and they inspect your property. Luckily my mom and I are doing this as a joint venture and she just built a fabulous house with 2 kitchens! We are going to use the basement kitchen as our work kitchen. I figure if most restaurants can pass inspection I'm sure my place will too!

Good luck and thanks for your wishes!

Cat

bobwonderbuns Posted 6 Apr 2010 , 4:14pm
post #10 of 18

I have a question: Now I know this is always a hot topic and I hope to high heaven this doesn't get nasty. If you are a cake decorator who is working out of the home, not licensed or certified, are the liability insurance policies the same as being described above? Or are they contingent upon being "legal"? I'm asking because even though it's not popular with the licensed decorators for unlicensed ones to be making and selling cakes, this does happen frequently.

Kitagrl Posted 6 Apr 2010 , 4:23pm
post #11 of 18

I am not sure why an unlicensed decorator would buy insurance...I didn't until I got licensed. I assume in states where its not legal, there would not be insurance policies for home baking. In states where it is legal, I assume you could buy it but then if you did get sued, it would probably open a can of worms and you'd end up in trouble with the state, even if the insurance covered the lawsuit.

leah_s Posted 6 Apr 2010 , 4:57pm
post #12 of 18

Simple answer - You can't insure an illegal activity.

Kitagrl Posted 6 Apr 2010 , 4:59pm
post #13 of 18
Quote:
Originally Posted by leah_s

Simple answer - You can't insure an illegal activity.




I was just saying that they (ins. company) probably would not know it was illegal and it would probably "work" for awhile (in states where home baking is legal) but if you actually had to do a claim, it would get sticky.

I don't know why anyone would get insurance though without just going the whole way and making themselves completely legal.

CookieMeister Posted 6 Apr 2010 , 5:00pm
post #14 of 18
Quote:
Originally Posted by bobwonderbuns

I have a question: Now I know this is always a hot topic and I hope to high heaven this doesn't get nasty. If you are a cake decorator who is working out of the home, not licensed or certified, are the liability insurance policies the same as being described above? Or are they contingent upon being "legal"? I'm asking because even though it's not popular with the licensed decorators for unlicensed ones to be making and selling cakes, this does happen frequently.




The argument that always comes up here is that people equate "legal" with "licensed".

I am a home baker (legal, but not licensed or certified because that is not a requirement in my state; we fall under the Farmer's Market clause).

I also work in HR at my full time job, and handle risk management for 300 restaurants.

Any company can purchase business general liability insurance (which covers customer accidents, foodborne illness, foreign object claims, etc.), but there will be a clause in the policies that if they are set up illegally in conflict with their jurisdiction, the policy will not pay on any claims. The insurance company is happy to sell you a policy; they will determine your legality of operations when you have a claim.

I purchase liability insurance for those FBI, foreign object claims, and if a customer were to fall when coming to my home to pick up an order, that is covered under the liability insurance and not my homeowner's policy. None of these have happened yet, but I don't want to be uninsured if they do. And having to handle customer FBI claims and foreign object claims at my full time job, I've become quite jaded on the goodness of people. There are a lot of people who are happy to scream "foreign object" because they broke a tooth somewhere else and don't have dental insurance. You don't want them to do that to you and be uninsured.

Kitagrl Posted 6 Apr 2010 , 5:03pm
post #15 of 18

That's why I'm scared to death to use hard jumbo sized non pareils or the silver and gold balls without it being specifically ordered by the customer...that's all I need, a broken tooth or a choking episode!

I also will not use fondant on "smash cakes"...I don't care if they look cute, a 1 year old baby WILL choke on fondant.

brensmom12 Posted 6 Apr 2010 , 5:04pm
post #16 of 18

All very good and valid points to be considered before joining in this venture. Has anyone ever had to make any claims on their insurance for any issues (FBI, food bourne illness, etc.)? Just curious. I work in the medical field full time and have seen these patients on occassion, however most of their claims are unsubstantiated.

Kitagrl Posted 6 Apr 2010 , 5:24pm
post #17 of 18

Alot of times it seems like people will get a stomach virus and they will blame the last thing they ate....

CookieMeister Posted 6 Apr 2010 , 5:40pm
post #18 of 18
Quote:
Originally Posted by Kitagrl

Alot of times it seems like people will get a stomach virus and they will blame the last thing they ate....




I see that lots of times in my regular job. And the fact of the matter is - FBI doesn't hit immediately. It takes 12-24 hours to hit, so it is usually a meal or two back further that is the culprit, if it is in fact a FBI. So if you get sick "immediately after eating - not FBI.

It's also not discriminatory - unless most people who ate that wedding cake got sick, then it's not FBI to that wedding cake.

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