Do I Need Insurance Coverage For An At Home Baking Business?

Business By BakingInStyle Updated 16 Jun 2012 , 12:19pm by karateka

BakingInStyle Posted 15 Jun 2012 , 6:41pm
post #1 of 4

Hey everyone,
I am considering starting a small at home baking business (cookies, cupcakes, and cake pops) but I really have no idea on where to start. I first want to know how to I protect myself from the customer that claims I have made him/her sick. Do I need any type of insurance? Do you all have it or do you just risk it?
Any advise would be greatly appreciated.
Kristie

3 replies
jason_kraft Posted 15 Jun 2012 , 6:57pm
post #2 of 4

Commercial liability insurance is a must if you are selling to the general public, you can get policies from State Farm or The Hartford for $1-2M of coverage for around $400-500/year.

You may also want to look into creating an LLC to add an additional layer of protection for your personal assets. When you do the books for your business both insurance premiums and LLC costs can typically be deducted to reduce the income tax bill for your business.

BlakesCakes Posted 15 Jun 2012 , 8:33pm
post #3 of 4
Quote:
Originally Posted by BakingInStyle

Hey everyone,
I am considering starting a small at home baking business (cookies, cupcakes, and cake pops) but I really have no idea on where to start. I first want to know how to I protect myself from the customer that claims I have made him/her sick. Do I need any type of insurance? Do you all have it or do you just risk it?
Any advise would be greatly appreciated.
Kristie




You might want to contact your Dept. of Agriculture about some options. Here in OH, that's the state department that handles Cottage Law bakers.

I had a problem when I called my State Farm agent, who told me that they didn't underwrite such policies (and that may be a state by state issue for certain insurers), and The Hartford option was too expensive for me.

I found great information on an OH farmer's market help website (many CFL producers sell at the markets) :
http://fmmn.org/resources/vendor-insurance/

I was able to get a tailored policy from:
http://www.wichert.com/

$155/yr. for $1M of coverage. I have no idea what states he can write for, but he may be able to tell you how, or who, you could find for help in your state.

Rae

karateka Posted 16 Jun 2012 , 12:19pm
post #4 of 4

Absolutely, positively, get insurance. I have insurance through The Hartford.

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