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Common Exposures for Bakeries

Posted by Kelli Young on Sep 25, 2019

Bakeries are wonderful businesses to own because they make people happy. Everyone loves the taste and smell of fresh bread or warm muffins, cakes and pastries.

However, running a bakery can be demanding, and it’s a constant challenge for owners to deliver exceptional goods while maintaining profitability. These challenges are magnified when you consider the need to balance risks related to property damage, premises liability, equipment breakdowns, crime and spoilage exposures. The list below provides an overview of these risks and more—helping you identify potential blind spots in your risk management and insurance programs.

  • Property exposures are significant for bakeries due to the presence of ignition sources such as stoves, ovens, fryers and other cooking equipment, as well as flammable materials such as boxes and napkins. Fire caused by malfunctioning electrical equipment or carelessness can spread quickly between fuel sources, putting your property and any equipment, materials or supplies at risk.
  • Continuity is critical in business, and there are few things more important than continuous revenue and cash flow, particularly for small to mid sized organizations. Just one brief business interruption can be incredibly costly for an organization, often leading to serious reputational damages or long-term closures. Common interruptions for bakeries can include equipment failure, relocation, fires and natural disasters.
  • Premises liability exposures at bakeries can directly affect customer safety and, when injuries occur at your business, you could be held responsible. Accidents related to slips, trips and falls are a common source of concern. Something as simple as an uneven surface or a liquid spill can lead to costly insurance claims following an accident.
  • Due to the presence of cash on the premises, bakeries face a moderate crime risk. However, thieves (including your employees) do not need direct access to cash to steal from you. Equipment, supplies and securities are all potential targets for wrongdoers.
  • When making deliveries or traveling to pick up supplies, bakeries face commercial automobile risks. Driver fatigue, hazardous weather conditions and distractions can lead to accidents. And, just one accident can be extremely costly, as expenses related to vehicle repairs and bodily injuries can add up quickly. What’s more, if you allow employees to use their own vehicles for work, standard auto policies are often not enough.
  • Despite the best efforts to keep food safe, product liability is a major concern for bakery owners. Food poisoning, the presence of foreign objects and other factors can potentially harm a customer, resulting in a lawsuit and costly settlement. Even a frivolous lawsuit can cost a significant amount of time, money and resources. Product liability coverage can help cover these costs in the event of a lawsuit.
  • Because bakeries store large quantities of food that relies on equipment such as refrigerators to stay fresh, spoilage exposures are a considerable concern for bakeries. In the event of equipment malfunction, food and ingredients may spoil, potentially costing thousands of dollars in lost supplies and revenue. Spoilage insurance can help cover the cost of any food lost as a result of spoilage and equipment breakdown insurance will help cover the cost of repairing or replacing equipment due to the unexpected breakdown.
  • Bakeries have a number of hazards that could lead to an employee being injured on the job, leading to a workers’ compensation claim. Normal, everyday tasks can lead to accidents and, in turn, increased costs for your business. Working with ovens and fryers can result in burns; using knives or bread slicers can cause cuts; and floors can become wet and slippery, leading to falls. Even simple tasks like repeatedly lifting boxes or bags of supplies can lead to musculoskeletal injuries.


While the proper risk management practices can reduce certain exposures, no system is 100% effective in ensuring an incident-free workplace. As a result, it’s all the more crucial to work with a qualified insurance advisor to not only assess your exposures, but secure the appropriate coverage as well. To learn more, contact Hill & Hamilton Insurance today.


Category: Business Insurance (3), Baker (3), Bakery (3)