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Do You Need Insurance to Sell Bakery Goods from Home? Tips for Starting Your Home Bakery Business

By Maria Hickey on November 8th, 2023

If your passion is baking and you dream of turning your hobby into a home-based business, you may be wondering whether you need insurance to sell baked goods from home or not.

The answer is yes – bakery insurance is a crucial consideration when starting any small business, including a home bakery. While regulations vary, most areas require some form of food liability insurance before you can begin legally selling your baked goods.

Understanding insurance requirements and securing the right coverage will protect both your business and your customers. Here are some tips on starting your home bakery the right way.

Research Your Local Laws

The rules around selling home-baked goods differ across localities, so it’s important to research the specific regulations in your area. In some places, you may be able to operate a home bakery under “cottage food” laws that allow the sale of certain low-risk food products from home kitchens without a licence.

However, most authorities limit what you can produce at home and require any “high-risk” items like cream pies or cheesecakes to be made in a commercial or licensed home kitchen. If you plan to sell at markets or online, look into the requirements for these sales channels as well.

Evaluate Your Insurance Needs

Insuring your home bakery is about protecting yourself, your family, and your customers. Exactly what kinds of insurance you require will depend on your location, business activities, and risk profile. Common policies for home bakers include:

Public Liability Insurance

This is one of the most important coverages for a home bakery. Public liability insurance helps cover costs if a customer gets injured or sick from consuming your products. It protects you if someone slips and falls in your home bakery or claims your baked goods caused harm. The costs of fighting legal claims and settlements can be substantial without liability coverage.

Product Liability Insurance

Similar to general liability, this policy directly covers the costs associated with any injuries or damages caused by defects in your food products. If, for example, an allergen in your baked goods triggers a customer reaction or hospital visit, product liability insurance helps pay for their medical treatment and protects you from litigation. It provides peace of mind that a baking mistake won’t lead to financial ruin.

Business Interruption Insurance

This protects against loss of income if your home bakery is impacted by a covered event like a fire or storm damage. Business interruption insurance helps replace income lost while you are unable to operate normally due to disaster or accident. For home bakeries relying on daily sales, this coverage can be a lifeline to keep the business afloat.

Employers’ Liability Insurance

If you plan to hire employees as your home bakery grows, employers’ liability insurance is highly recommended. This covers you in case an employee gets injured on the job and tries to hold you responsible. Common claims covered include wage disputes, discrimination, wrongful termination, and workplace safety incidents.

Consulting with an experienced insurance provider is the best way to understand your coverage needs and risks. Securing appropriate policies shows you operate a professional home bakery that prioritises safety and responsibility.

Build Your Home Kitchen

Baking gourmet goods from your home kitchen is part of the appeal of starting a home bakery. However, most authorities require your kitchen to meet higher standards than a typical household cooking area to qualify for food production.

Some common requirements for approved home kitchens include separating hand washing and dishwashing facilities, commercial grade appliances and adequate food prep surfaces,

restrictions on pets and small children during baking, and sanitation standards and licensing inspections.

Be prepared to invest in upgrading your kitchen. Speciality insurance can also be purchased to cover accidents or damage that may occur in your home work space.

Protect Your Investment with Bakery Insurance

With proper planning, licensing, and insurance, launching a home bakery can enable you to turn your love of baking into a thriving business. At Brisco Business, we offer tailored policies that cover all the major risks facing your home-based baking operation.

Our experienced team makes securing the coverage you need simple and painless. Contact us today to learn more about our bakery insurance policies.

Maria Hickey

For more than 20 years, Maria has worked in the insurance sector and has extensive underwriting and customer service expertise. Maria is an experienced Senior Underwriter with a particular specialism for shop, office and surgery related insurance.

All articles by Maria Hickey

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