Business By lacey88 Updated 19 Jan 2011 , 6:18pm by indydebi

lacey88 Posted 12 Jan 2011 , 6:59pm
post #1 of 16

so i\\'m trying to figure out costs for starting my own cake business. my question is...for those of you who already have a much do you spend on insurance?

i am planning on renting a commercial kitchen one day a week. i work by myself and have no other employees.

does anyone have a guess on how much i should expect to spend? thank you!

15 replies
JanH Posted 18 Jan 2011 , 11:42am
post #2 of 16

It would be helpful to know where you are as insurance varies greatly by location.


leah_s Posted 18 Jan 2011 , 1:53pm
post #3 of 16

My insurance costs about $250 per year. If State Farm sells insurance in your state contact them. They have a program for small bakeries.

CWR41 Posted 18 Jan 2011 , 4:25pm
post #4 of 16
Originally Posted by lacey88

i am planning on renting a commercial kitchen one day a week.

Curious... how are you going to bake, cool, and decorate all orders in one day?

bellaudreycakes Posted 18 Jan 2011 , 10:40pm
post #5 of 16

leah_s That sounds pretty cheap, do work out of home or have a cake shop? I was just quoted for insurance for a bakery shop and was told somewhere between 500-700/? I do have a state farm in the area they are usually much higher but if they offer a special for bakeries maybe I will give them a call. BTW I live in Ohio.

LoveMeSomeCake615 Posted 18 Jan 2011 , 10:43pm
post #6 of 16

Ours is around $230 a year, we share a commercial kitchen with a catering company.

pattycakesnj Posted 18 Jan 2011 , 10:52pm
post #7 of 16

I pay over $500 a year for 2 million in coverage. I am a one person by appointment only cake studio.

gbbaker Posted 18 Jan 2011 , 11:08pm
post #8 of 16

Are you including liability in your insurance?

patticake1951 Posted 18 Jan 2011 , 11:12pm
post #9 of 16

we have State Farm and are paying $325 a yr for $1 million with renters insurance, and liability. We have a shop and are there 6 days a week.

yummy_in_my_tummy Posted 18 Jan 2011 , 11:29pm
post #10 of 16

A lot of companies have a minimum premium of $500. If you can find a company that does not have a minimum premium, your policy can be less than $500 for the year. However, keep in mind that most commercial policies are based on your gross receipts. For example, if you gross $30k a year, your premium may be very minimal, but as you grow, and as your receipts grow, your premium will grow as well. Bakeries with $100k gross receipts pay a lot more for insurance than a start up company with $20k gross receipts.

Also, a GL policy provides coverage for liability only (damage to others or their property). If you need coverage for your business personal property, make sure you ask for a BOP (Business Owners Policy), which is liability coverage and coverage for your "stuff" (pans, bags, buckets of fondant, inventory etc)

HTH! icon_biggrin.gif

cakeandpartygirl Posted 18 Jan 2011 , 11:45pm
post #11 of 16
Originally Posted by leah_s

My insurance costs about $250 per year. If State Farm sells insurance in your state contact them. They have a program for small bakeries.

I can't believe yours is that cheap. I pay 425 a year for liability. It's for 2 million but it was the same as for 1 million. icon_cry.gificon_cry.gificon_cry.gif

itsacake Posted 18 Jan 2011 , 11:50pm
post #12 of 16

So after reading this, I called my State Farm agent to ask why my insurance is so much higher than anyone else's on here. We are paying $500.00 to insure the shell of the the building, which my husband and I own and then the business is paying over $1400.00 for one million in liability and for up to $50,000 in case anything happens and we have to replace equipment. Sure seems like a lot when I read this thread. Might be California but....

My agent said I need to be sure I'm comparing apples to apples, so let me ask: Leah, do you have equipment covered in that $250.00? Would you mind sharing how much? Anybody else? What does your coverage include beyond liability?

jenmat Posted 18 Jan 2011 , 11:51pm
post #13 of 16

I want Leahs insurance too! Mine is $585.

yummy_in_my_tummy Posted 19 Jan 2011 , 6:08pm
post #14 of 16

itsacake, coverages are obviously something you should compare apples to apples on, but it's your gross receipts too - that's really important. It's a huge rating factor. And maybe Leah's policy doesn't provide building coverage?

itsacake Posted 19 Jan 2011 , 6:16pm
post #15 of 16

Thanks, yummy.

I'm a start-up with almost no receipts so far, so it isn't that. I think it is probably the combination of California and the amount of "stuff" I need to insure....

I don't mind paying if this is what it costs. I just need to do due diligence and this thread "perked up my ears" so to speak. I'll be sure to continue the discussion with my agent. I do understand that renting a kitchen one doesn't have a lot to insure. I did that for a while before I built my own.

indydebi Posted 19 Jan 2011 , 6:18pm
post #16 of 16

see my post on insurance on this thread:

Just want to make sure when you say "insurance", that you're comparing it one-on-one. I paid over $3500 a year but that was ALL of my insurance coverage ... not just one piddly liability policy.

Quote by @%username% on %date%