How to arrange specialist bakery insurance

Getting the right insurance is a vital step to protect your new bakery, and it needs to be in place before you start trading. You need a specialist policy that covers the specific risks of a food business, from a customer having an allergic reaction to your expensive oven breaking down. The absolute essentials you must have are Public and Product Liability. If you hire anyone, even on a casual basis, you are also legally required to have Employers’ Liability insurance.

The Key Types of Bakery Insurance

Understanding what each type of cover does will help you build the right policy for your business. Think of it as picking the essential ingredients for your protection.

• Public Liability Insurance: This covers you if a member of the public is injured or their property is damaged because of your business. For example, if a customer slips on a wet floor in your shop or trips over a delivery crate you left on the pavement.
• Product Liability Insurance: This is crucial for any business selling food. It protects you if someone becomes ill, is injured, or has an allergic reaction from a product you sold. This cover is essential for defending claims of food poisoning or injury caused by a foreign object found in a bake.
• Employers’ Liability Insurance: If you employ any staff, you must have this by law. It covers claims made by an employee who suffers an injury or illness as a result of working for you, such as getting burned on an oven or injuring their back lifting heavy flour sacks. You can be fined heavily for not having it.
• Contents & Equipment Insurance: This protects the vital tools of your trade. For a bakery, this includes high-value items like commercial deck ovens, spiral mixers, provers, and refrigeration units. This policy can cover the cost of repairing or replacing them if they are stolen, damaged, or destroyed by an event like a fire or flood.

Other Cover to Consider

• Business Interruption: This covers your loss of income if you are forced to temporarily close your bakery due to an insured event, like a fire. It can help pay the bills and wages while you get back on your feet.
• Stock Insurance: This covers the cost of replacing your ingredients and finished products if they are spoiled or destroyed, for example, due to a fridge failure or a fire.

How to Arrange Your Insurance

1. Gather Your Information: Before looking for quotes, have key details ready. This includes the value of your equipment and stock, your estimated annual turnover, and the number of staff you employ.
2. Compare Quotes from Specialists: Don't just pick the first or cheapest option. Use a reputable insurance broker who specialises in the food and drink industry or a business insurance comparison website. A specialist broker can provide tailored advice to ensure you don't have any gaps in your cover.
3. Read the Policy Details: Once you have a quote you’re happy with, read the policy documents carefully before you buy. Check the policy excess (the amount you have to pay towards a claim) and make sure you understand any exclusions.

Top Tip: Be completely honest with your insurer about your business activities. If you start offering delivery services or hosting workshops later on, you must inform them to ensure your cover remains valid.