State Farm does indeed sell a policy targeted at very small bakeries and home bakeries. Mine just increased to $275 per year.
I worked at a brokerage, myself, and State Farm does have a fairly competitive business program. They definitely made my company have to think outside the box for what we could offer that wasn't apples for apples.
It's nice to see some specialty programs popping up for home businesses. It's risky from an insurance stand point because although the risks themselves are low, so are the premiums. One major loss can ruin your ratio of loss to profit when premiums get so low. It'll be interesting (to a nerd like me) to see how that continues to pan out.