I'm considering becoming licensed (with an LLC), and was thinking about insurance risks associated with a home-based business.

Aside from insuring personal property such as pans, ingredients, etc., what other types of insurance do you consider necessary?

Since I wouldn't have any customers on-premise (all cakes would be delivered), and I would be working with non-perishables, it's hard to justify the cost of carrying a high liability limit, but I'm wondering if there are things I'm just not thinking about.

I wouldn't want to skimp on insurance, but I also wouldn't want to waste money buying insurance beyond what's reasonably needed for such a small home-based cake business.

Advise and opinions from other home-based cakers would be greatly appreciated.

I have 2 million in business liability insurance from Zurich... because at any time someone could choke on a decoration from one of your cakes or claim that your cake was "bad" (even if it's not) and sue you...

so that's why you do need insurance...

not to cover your things really as much as to protect you from lawsuits.

YOur liability insurance isn't to cover incident that just happen on your property. It's to cover you for anything that anybody might want to sue you for. Many venues require proof of at least $1million liability coverage (and your agent will have to issue a certificate of insurance to the venue; a copy of your policy face sheet won't cover the venue) and many are starting to require $2million.

Talk to your agent. There's a reason they are licensed and have to pass a test to understand the many details of this style of contract law. They will know what you need and will find the best company to get it from.

Thank you ladies, I appreciate your insight.

I have 2 mil, through state farm, It costs $450 yr, but I have several homes insured with them and several rental homes insured also, and 4 cars and a boat, so rates may differ if just getting that insurance.

I have general liability for 2million as well and am paying $250 a year through my insurance. I am small right now since i just started. They told me the same that you need to cover yourself for what is going out of your house and into someone else's mouth more or less. The more your gross sales or exposure the higher the insurance you should have. Definately worth it if you want to get into some venues that won't accept you if you don't have it. Hope this helps.

indydebi would you mind sharing who your insurance co. is? tia

and does anyone have a quote from s cal? wondering if I can get it as cheaply as aforementioned

I checked with my insurance agent, and she indicated I could add an incidental business exposure rider for just $30 per year. It would extend my current homeowners limits (and 1 Mil liability) to cover my small business also. Not bad at all!

Thanks again for all of the info and advice.

If you are a home based the best option is adding it to your Homeowners policy, very cheap, I would however increase my limits of liability to 1mill, there are other endorsements that you can add to your homeowners policy that would cover all of your equipment, However, if you are going to need a certificate of insurance for somone then you will not need to go this route. You will need to purchase a General Libility bolicy and possibly a Business owners Policy, It really depends on the state you live. I am a Insurance in NC and can only speak for this state. Hope this helps