I am working on getting a home baking license in Ohio. I have read on here how we should carry liablity insurance and I agree. However, I am having a heck of a time finding anyone that offers it. I have checked with my homeowners insurance carrier and serveral local insurance agents including State Farm, who offers it but price seemed really high. I would like to at least have a couple of options to choose from. Any help is appreciated. TIA
What is "really high"? I'm in the process of switching from a Western Heritage liability policy ($1000 premium) to a Hartford insurance policy ($450 premium). I found the new policy through Wells Fargo, and we operate out of a licensed commercial kitchen (commercial home baking is illegal in CA). The policy is for $4M/$2M general, product, and advertising liability.
Liability insurance will probably be more expensive for home bakers since the risk is higher.
My State Farm agent quoted me $225/year. I'm also in Ohio. Is that lower than the quote you got from State Farm?
State Farm quote me $600 yr. Seemed high to me, my homeowners isn't much more than that. Jason, why would home baking be a higher risk?
I don't work in the insurance industry, but from the insurers perspective there are probably more things that can go wrong in a home-based business since it may not be set up in an ideal way to produce goods (but would still be good enough to pass any type of limited inspection imposed on home bakeries), so the risk per dollar of sales would be greater.
This would be especially true for OH businesses that fall under the cottage food law rather than the home bakery license, since the former requires no inspection at all.
Note that I'm speaking in generalizations here and not about specific businesses.
The other issue is a minimum premium level, which small businesses (whether or not they are home-based) can run into. Some insurers will refuse to write a policy with a premium below a certain amount, so they pad the premium on smaller policies to reach that minimum premium level.
I would suggest calling around to different carriers, starting with your homeowners policy holder. They are the ones who know what you need and what the pricing will be. Since the Cottage Industry and home baking have been here for years and years, it is nothing new here, they are aware of the liabilities.
I am also in Ohio and pay about $200/year with State Farm. Perhaps the agent made a mistake?
I'm in KY, but pay about $250 per year from State Farm. Previously I was paying $500 a year, so the State Farm quote was fab!!
For those of you paying ~$200/year, what kind of coverage limits are you getting?
Same as your post above, but $2/$1 mill
I wish we could it get for $250 here in Northern Ca. I pay $500 from State Farm.
Leah and flamingobaker, do you also have your homeowners with State Farm or do you just have a policy covering the baking?
I am in Columbus Ohio (with a home based bs) and have a liability policy through an Independant Agent. He looked at the Ins. companies they work with to find me the best deal. My policy is actually through Auto Owner's Insurance Company (weird for a cake decorator, right?). From my understanding, my premiums are based on my ESTIMATED sales for the year. I believe the first year I carried the insurance my sales were only like $25,000 so my premium was $155/yr . Reasonable, right?
Good luck to ya!
Thanks everyone and Michelle I checked and there is an independent agent in my town for the Auto Owners Insurance, so I will check with them, I really appreciate your help!
Oh and remeber to estimate low (oh goodness...did I say that out loud?) Ha Ha Ha!! Keep in mind that they can audit you to be sure that you are paying the correct "estimate", but I bet that auditing a policy with less than $200 premium is pretty low on their list of priorities. If you end up selling more than your estimate, you can pay them the difference (like you'd really want to VOLUNTEER to give them more, right? Ha Ha Ha! Gosh...I'm awful tonight!)
Gotcha , thanks for your help
[quote="vwolf"]Leah and flamingobaker, do you also have your homeowners with State Farm or do you just have a policy covering the baking?[/quote]
I don't have any other insurance with State Farm. It's a little stand alone policy.
Thanks everyone for your help! I have talked to several different insurance agents and I am getting closer to a more affordable price. Again thanks so much for helping.
I hope it works out well for you!
So, will you be coming to Columbus for ICES next month? There are some really great people scheduled to do classes and Sunday meeting is usually pretty educational. If you do, look me up!!!
Thanks Michelle, If I do I will look you up!