Tell Me What I Need To Know About Insurance!
Business By sunnyrunner Updated 15 Apr 2008 , 12:41pm by jenlg
Who do you insure through? What kind do you have? How much does it cost? What else do I need to know? Thanks!
I am glad you posted this question. I need the same answers. Hope someone can help us both 
First check with your regular insurance agent. If he represents a number of companies (independent agent and not a company agent, like State Farm), then he can shop around with his various companies and get best rates for you. He can also advise you on what you need. This is all assuming is licensed to sell commercial insurance and not just personal insurance (and most of them are, since comm'l is where the money is!)
Gen'l Liability Insurance is usually what most venues ask for when you bring cake/food into their site. When that happens, you contact your agent to have a certificate of liability insurance faxed/emailed to the venue that lists the venue as an "Additional Insured" on your policy. There should not be a charge for this ... that's what GL coverage does.
Auto insurance is going to give you sticker shock. But if you are involved in an accident during a delivery and your insurance company finds out you are using your personal vehicle for a business without having business insurance, they could deny the claim. You contracted with them for personal use of the vehicle and you are paying personal rates ... not comm'l rates. With a comm'l vehicle there is higher risk, ergo higher rates.
Give ya a 'for instance' ..... when we had all 3 vehicles on our personal policy, it was around $900 a year. I moved 2 of the vehicles to a comm'l policy and it was $2400 a year just for the two vehicles.
Comm'l auto policies differ in who is covered, too. If I loan my personal car to my neighbor and she wrecks it, the incident is covered because she was driving with my permission. On my comm'l policy, I have to list every person who may drive my biz vehicles or there is no coverage if there is an accident while they are driving. I have 3 non-family members listed on my policy ... my 3 top people who work with me ... because they drive my company cars during caterings. But I can't ask my son to back my van out of the driveway because he's not listed on the policy (because of his age, it would cost me thru the roof!).
You don't say if you're a home baker or a shop owner, but if you're a home baker, check with your agent and find out how your homeowners coverage is set up to cover business equipment, like your cake pans, decorating tools, kopy-kat projector, etc. You might need to get a separate policy to cover those things.
Gosh, that should get you started! 
feel free to pop back with any specific questions ... we sure have plenty of experts on here who can help fill in any holes!
I work in commercial insurance and I'm a bit surprised at the idea that adding an additional insured is cost free.
There are very few policies which do not have a usual charge to add an additional insured. Most policies have a minimum fee of between $30 and $50 (often the higher) for adding any additional insured. This is simply because the company is now actually extending insurance to this other party and would have to also defend this party if someone filed suit.
Now, there are a very few types of policies which are not always easy to qualify for which do have some additional insureds offered for free.
ziggytarheel, everytime I go into a new facility that requires a Certificate of Liablity insurance that covers that location, my agent issues it and there is no charge. When I worked for CIGNA insurance for 15 years, we did not bill for add'l insd certificates. (and I saw insurance files that had hundreds of Add'l Certs).
Maybe we are thinking of two different things? I'm not adding anyone as a Named Insured ... this is an Add'l Insured ..... it extends my liability to also cover the facility if there is an issued that causes the bride/client to sue me AND the facility due to an error on my part for a one-day event.
Maybe it's a difference in state rules and laws or just the difference in companies? All I know for sure is that in my years of comm'l insurance work and in dealing with my own agent, I've never seen anyone charge for this.
I just called State Farm about this last week. Since I do such a small amount of business I would be paying $27 a month ($324 for the whole year). I plan on calling an agent and having them shop around for the best price though. I really don't do that much business since I'm still in school and a mom to 4 little ones, however, I want to cover my butt just in case.
ziggytarheel, everytime I go into a new facility that requires a Certificate of Liablity insurance that covers that location, my agent issues it and there is no charge. When I worked for CIGNA insurance for 15 years, we did not bill for add'l insd certificates. (and I saw insurance files that had hundreds of Add'l Certs).
Maybe we are thinking of two different things? I'm not adding anyone as a Named Insured ... this is an Add'l Insured ..... it extends my liability to also cover the facility if there is an issued that causes the bride/client to sue me AND the facility due to an error on my part for a one-day event.
Maybe it's a difference in state rules and laws or just the difference in companies? All I know for sure is that in my years of comm'l insurance work and in dealing with my own agent, I've never seen anyone charge for this.
I deal in certificates most work days. Believe me, it can be VERY expensive in some lines of work to add additional insureds, depending on the cost of the job our insured is doing and his line of work. Most additional insureds have a flat fee. That fee is often $50, but if a completed operations endorsement is also issued, the flat fee is often another $50 for that. In those cases, the insurance company has liability for years to come for the additional insured.
I've found that other companies often have even higher charges for most additional insureds, starting at $100 and going up from there. There can be huge liability issues involved where the insurance company is extending a million or more dollars in coverage to the additional insured, so there is a need for a charge. Not to mention the tons of work that sometimes these issues create.
There are a few products that have additional insureds at no extra charge in certain situations. I think your business qualified for that. Do you have a BOP (Business Owner's Policy)? Those tend to be the easiest in these situations. But you have to have several things in your favor to qualify for that. They also tend to offer the best coverage for the least money.
Often, customers negotiate the price of the AI into their contract with the party requesting the AI. Other times, they are able to get the other party to drop their request to be an AI.
If you look at it even in the situation of these venues asking to be Additional Insureds, in case of a problem, the venue is now also the insurance companies client. They must now go to just as much trouble for them in case of litigation.
If you are an inhome business i have this to offer...
both Hartford and State Farm said they woul dnot insure my inhome business. I am going with Travelers. It will cost me $500 a year for 1mil liability. That covers up t0 $2400 equipment, if someone sues me and if someone falls at my house and sues me.
HTH Julia
not sure about cakes and such, since I'm not selling them yet, but I know that when we got homeowner's insurance for this house, I asked about my business stuff, since I did a lot of craft shows, e-bay sales, etc, and wanted to branch out into private lessons in my home. My homeowner's covers a certain amount for property/supplies, and there's an additional charge for the general liability. But all in all, it wasn't that much. Now, that's for crafts, not for food, but still... worth talking to your homeowner's insurance first, if you bake from home.
I'll bet you're right in that the type of industry has a big bearing on it. I sure can see, for example, the risk involved in a construction company vs. the risk for a flower shop.
I haven't gotten into the insurance and license part of the cake thing yet...but I will say this. My fiance and I had a contracting company and when we filled for liability insurance the cost was low. But--when adding on additional insured -- the cost was outrageous!! It was like an extra 100.00 per addit.
I believe it really depends on the state regulations and the nature of business. Yes things can happen with cakes....but obviously construction has a bigger risk. Cost varies with everything.
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