Every business needs insurance to protect its interests. Some businesses, though, need specific insurance plans to cover their specific and unique circumstances.

One of those types of businesses are bakeries. These businesses not only have the same risks as other businesses, but they have unique ones that are related to the preparation and serving of food.

That’s why having the proper baker’s insurance is important for any business in this industry. Whether you own a bakery that only manufacturers and sells products wholesale, a bakery that has a retail storefront or you operate out of your own home, you need proper insurance to keep you protected.

Unfortunately, there is no one insurance package that you can purchase “off the shelf” to cover every aspect of your bakery. Instead, you’ll need to select the specific products that are best for you. 

Below is a description of some of the insurance coverages that are best for most bakeries.

General Liability

All businesses should have general liability insurance. This type of product helps to cover any claim that is related to property damage or bodily injury. If someone suffers an injury while frequenting your bakery, this is the type of insurance that would help you.

Similarly, if one of your employees damages a customer’s property as they are making a delivery, general liability insurance will have you covered. This coverage helps you to recover costs associated with damage or injuries sustained.

Commercial Property

Commerce property plans provide coverage for the building your bakery is in as well as the equipment that is stored within. This type of insurance is good whether you rent or own the building, or even if you operate the business out of your home.

If your space suffers damage from a fire, for instance, commercial property insurance would help you repair the building as well as repair and/or replace any of your equipment. This could include your ovens and stoves, mixers, ingredients and anything else related to your inventory.

Workers’ Compensation

While a bakery may not pose the same risk of injury to workers as a construction company, there are still some inherent risks to your workers. Employees could burn themselves when handling food and getting it in and out of a hot oven. They could slip and fall when transporting heavy bags of flour. Or, they could injure themselves on big mixers.

These are just a few of the examples of how workers could get injured while on the job in a bakery. Workers’ compensation insurance will provide your workers with protection in case they suffer an injury or illness while on the job.

This would help them pay for any medical costs related to this injury or illness, and also compensate them for lost wages.

Auto Insurance

If your bakery business delivers products — whether directly to customers or to other businesses for resale — then it will be necessary for you to have commercial auto insurance. This will help to protect both your vehicles and your employees while they’re driving for work. 

This is especially important when employees are driving company-owned vehicles to make deliveries. Just like personal auto insurance, commercial auto insurance helps to cover the cost of any repairs to property and medical expenses related to injuries suffered by your employee and/or others.

Product Liability

Bakeries take on some liability related to their products, since people could become sick or injured as a result of the items you sell. For instance, if your products become contaminated by bacteria that makes its way into your food, people could become sick.

In cases where the sickness becomes widespread and/or serious, bakeries could be faced with significant lawsuits. Product liability insurance will help protect bakeries in case this ever happens. 


Another product-related insurance plan is spoilage coverage. Food is obviously very susceptible to damage or spoiling depending on the environment. Freezers and refrigerators are often necessary to protect your ingredients before you bake and your products after you bake.

If your building loses electricity for a long period of time, your food and ingredients could spoil, forcing you to throw them away. If this happens, it could be very expensive to replace all your items to ensure your business can function properly.

Spoilage insurance will cover you in the event that something like this happens, helping to provide compensation for the items that you need to replace. Spoilage coverage might also provide coverage should your products be damaged or spoil while they’re out for delivery.

Loss of Income

Loss of income insurance will provide coverage in case your bakery’s bottom line is seriously affected by a stop in operations. If a fire damages your building, for example, your bakery will not only have to cover the costs of repairing the building, but while it’s getting repaired, you could lose a significant amount of income.

During this time when your operations have to be suspended, you likely will not only lose income, but you’ll be forced to pay for ongoing expenses. If you don’t have money coming in, though, this could be a serious challenge. 

Loss of income insurance can provide protection and compensation in situations like this, allowing you to meet your ongoing debt obligations, pay your employees and fund other items that will help your business stay afloat as the building is getting repaired.

Work with an Insurance Company You Can Trust

While all businesses should have some form of commercial insurance, there are some industries, such as bakeries, that require some more specific coverage for their unique aspects.

Above are some of the main types of insurance plans you should consider if you operate a bakery. It’s always a good idea to work with an insurance company you can trust so their agents can walk you through the optimal plans you need to protect your business.

In Michigan, Signature Insurance has been helping business customers find the best insurance for their operations for years. Contact us today to find out which insurance products would cover your bakery best.