Home Food Business Insurance

After the COVID-19 lockdowns, home food businesses seemed to start popping up everywhere. Selling food from home was seen as a safe and profitable way for people to sustain themselves. And now that the world is opening back up, many people are choosing to keep that profitability and continue on with their home food business to continue to share their culinary creations with the world!

It's a fantastic trend, however, there are some important caveats that every new home-based business has to be aware of. First, one of the most important questions that every entrepreneur should ask is, do I need insurance to sell baked goods from home, for which the answer is almost always a resounding yes. 

Home food business insurance and small business insurance are two cost-effective ways of protecting you in the event of the unexpected. And the unexpected, unfortunately, is often something you should expect. For example, say you bake something and despite precautions, a customer had an allergic reaction to what you made and sued you. First, you will need a lawyer and then, if you are found culpable or liable, you will need to pay for medical expenses, work loss compensation, and potentially even more pain and suffering compensation. All that can not only close your home-based business before you get really started, but it may even leave you filing for bankruptcy. All because of one small mistake.

The good news is that this is where food insurance for small business set-ups comes into play. Insurance for home-based food business protects the baker or chef from common liabilities like injuries to third-party, allergic reactions, food contamination, damaged rental property, and missing or damaged supplies. 

Note, that while food vendor insurance should be a must, it can be hard to get specialized insurance for selling food. That's because a  lot of insurance companies still have some frustrating roadblocks they require from food vendors. The good news is that there are exciting alternatives available today; alternatives that every home vendor should be aware of. 

Insurance For Selling Food Online

Do you need insurance to sell food online? YES.

If you make and sell your own food then you will need insurance for selling food online.

If you make and sell your own food and want to sell it offline, you will still need some type of insurance. There’s insurance for selling produce; insurance for selling meat; and insurance for selling everything in between.

Note that there are not too many specialty types of cottage food insurance companies — although there are some exciting niche home-based food business insurance companies popping up like FLIP — so instead, what most online food sellers look for is general liability insurance. 

General liability insurance is a must-have for every business, but especially for those businesses that have risks inherent to the nature of their business. The cottage food industry is one such industry. But wherever possible, entrepreneurs should also look beyond this basic type of insurance and get some more industry-specific insurance to cover more specific situations.

The first step to see what type of cottage food insurance is right for you is to check your local laws. Every jurisdiction should outline food safety protocols and include food insurance meaning and requisites for selling home-created food in that area. For example, Canadian law requires specialized food vendor insurance Canada for every type of food vendor. 

After you determine what type of insurance is required in your area, the next step is completing any required courses or licensing in order to apply for that insurance. For example, food safety insurance will typically require the applicant to undergo a food safety course. You are also likely to need to undergo a food preparation course before obtaining insurance for food preparation

Food Business Insurance Cost

A cottage food operator should expect to pay a total food business insurance cost of between $300 and $1,300 each year. Where you fall in that range will depend upon two things:

• Your location
• The range of your operations

For example, if you are a one-person food cart, selling hot dogs and baked goods on Main Street in a small Texas city, your costs are going to be minimal. That's because this is a less complicated operation and a food vendor cart will have a very minimal food trailer insurance cost. A business owner's policy (BOP) is a perfect type of insurance for this type of operation as it combines property and general liability coverage. The lowest food vendor insurance cost you might expect for a BOP is $40 to $50 per month. 

But if you opt to sell your baked goods solely online, then while the answer to do I need insurance to sell food from home is yes, you won't need much. Online food sellers may need just basic general liability insurance, which will be around $30 per month. 

What if you're just getting started with selling food out on the town and aren't sure what you should get as part of a permanent food insurance cost? Then consider the advantages of a one day food vendor insurance. As the name suggests, a one day food vendor insurance is applicable for one day or sometimes for a full weekend. This type of insurance is perfect if you are experimenting with selling your homemade goods at a convention, fair, or other pop-up locations but aren't sure yet what type of permanent street food insurance policy is right for you. 

FLIP Insurance

As mentioned above, there aren't a lot of insurance policies specific to home-based food businesses and even fewer insurance companies catering to the industry. Rather, most entrepreneurs who have wanted to protect themselves have had to mix and match from other types of insurance plans instead of getting something from niche food insurance companies. That has changed with exciting new companies like FLIP. 

FLIP Insurance, an acronym name standing for Food Liability Insurance Program, has been an incredible asset to the cottage food industry. Now representing nearly 50,000 home-based businesses across all 50 states, FLIP has become a leader in the home cottage business insurance industry. This company has specialized in creating and offering robust, targeted, and affordable insurance companies to all types of businesses and startups that revolve around homemade food. 

What makes FLIP so great? Just consider a few of the following ways in which this type of homemade food insurance makes things easy:

• FLIP farmers market insurance makes it easy for users to structure their own coverage. Rather than buying a more expensive package that might include a lot of coverage you don't need, FLIP offers targeted information so you get exactly what you need at affordable rates. Vendors can add on only those premiums that fit their needs, such as trailer endorsements and coverage. 
• FLIP insurance boasts free additional insured. Many flea markets and similar events now require food vendors to add the market organization itself to the vendor's insurance policy. This is for an added level of protection but can be cost-prohibitive to many small-time food vendors. FLIP understands this and has made it free to add such additional insured to their policies. 
• Comprehensive FLIP insurance food truck. Food trucks are fantastic methods of sharing one's homemade food. Unfortunately, they can also require a whole host of insurance needs. Insurance to protect workers, property, commercial driving, and so much more. FLIP insurance makes all of this easy with one affordable policy. 

Of course, these are also just a few of the ways in which FLIP insurance caters to those in the cottage industry. You will want to contact them directly to learn more and to see in specific what types of insurance policies they can offer for your own unique home food business. 

Home Based Bakery Insurance

A home based bakery is one such type of business that will want to speak directly with a niche industry provider like FLIP. That's because home-based bakeries typically have a lot of issues that they will need to be wary of. There are expensive pieces of equipment involved, many nut and dairy allergies to consider, likely employees to cover, and much more. 

With all of the concerns of the home-based bakery, it is understandable that home based bakery insurance is complex and the bakery insurance cost may vary depending upon your needs and specific level of risk. When buying home baker insurance Singapore or the United States, risk is going to be one of the primary things insurers evaluate. This level of risk will depend upon your location, size of crew, type of foods you store and make, and how much you want as your coverage limits. Who you make foods for can also change baker insurance requirements and costs. For example, pet bakery insurance will be significantly less expensive than insurance for selling baked goods for humans because of the different ways the civil system treats pets versus humans. 

In general, however, if you are looking for insurance for selling baked goods, you will want a liability policy that covers the following at minimum:

• Bodily injury. This will protect you in the event someone has an allergic reaction to a product and chooses to hold your bakery liable.
• Third-party property damage. If you bake goods for someone else's event and then damage someone's property while delivering those goods, this policy will cover those damages.
• Medical coverage. If someone is accidentally injured while you or an employee is out selling goods, this policy will financially protect you. 
• Errors and emissions. Many people understand that mistakes and delays happen. Unfortunately, there are some people who will sue should something like their baked good order arrive late -- particularly when that happens at an event. Errors & omissions insurance policies will protect you should they accuse you of negligence. 

Additional Resources

Commercial Kitchen In Home | Cottage Baking | Cottage Cook Software | Cottage Cooking | Cottage Food Community | Food Business From Home | Food Business From Home Ideas | Home Baking Business | Home Kitchen Bakery

‍