How Much Does Bakery Insurance Cost? 2025 Rates

In 2025, U.S. bakery businesses can expect to pay between $800 and $900 annually for comprehensive business insurance, averaging $65 to $75 per month. The primary cost drivers are location, type of bakery, business size & revenue, types of products sold and employee count.

How Much Does Bakery Business Insurance Cost?

The average bakery business in the U.S. pays between $65 and $75 per month for a full business insurance package. That breaks down to roughly $800 to $900 per year. However, this is just a ballpark range and actual costs can vary widely depending on your specific situation.

Every bakery is different, which means insurance costs can vary a lot. There’s no single price that fits everyone. A small home-based bakery with no employees will pay much less for insurance than a large bakery with a storefront, several ovens, and a team of workers.

Things like the kind of baked goods you make, your business hours, how much your equipment is worth, and where your bakery is located all affect how much you’ll pay for insurance.

For example, a bakery that uses deep fryers or large ovens may pay more for property insurance because of the higher fire risk, compared to a bakery that only makes simple items like cookies or bread with little equipment.

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Bakery type: (Home-based, retail, or wholesale operations come with different risks and coverage needs)
• Property size and value (affects commercial property coverage)
• Location: (Bakeries in high-crime or disaster-prone areas may pay more for property and liability coverage)
• Types of products sold: (Selling perishable, specialty, or custom items can increase liability and spoilage coverage costs)
• Past claims history (insurers charge more if you’ve filed claims)
• Property size and value: (Bigger or more valuable spaces and equipment increase commercial property insurance rates)
• Business interruption coverage and other add-ons

Knowing what affects your bakery’s insurance cost can help you choose the right coverage and plan for the real expenses of protecting your business.

Average Bakery Insurance Costs For Coverage Types

When it comes to protecting your bakery business insurance, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan. Here’s a closer look at the major coverages most bakeries need.

• General liability insurance: $35 per month
• Business owner’s policy: $65 per month
• Workers’ compensation insurance: $125 per month
• Commercial auto insurance: $165 per month
• Cyber insurance: $140 per month

General Liability Insurance

The average cost of a General Liability Insurance is about $35 per month for bakery business.

General liability covers third-party bodily injury, property damage, and advertising injuries. If a customer walks into your bakery and slips on a wet floor near the counter, breaking their arm, general liability insurance can help cover their medical bills and any legal costs if they decide to sue your business.

Typical policy limits are $1 million per occurrence and $2 million aggregate.

Factors that influence the cost include the bakery size, location, type of bakery, types of products sold and employee count.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $65 per month for bakeries.

A BOP bundles general liability insurance with commercial property insurance. It helps protect your bakery from customer injuries, property damage, and damage to your building, furniture, and baking equipment.

For example, if a fire breaks out in your bakery’s kitchen and damages your ovens, mixers, and walls, the BOP can help pay for the cost to repair or replace the damaged equipment and fix the building.

Typical policy limits are $1 million per occurrence and $2 million aggregate for liability, with separate property coverage limits based on the value insured.

Cost factors include value of your bakery property and equipment, location risks, business revenue, number of employees, and optional add-ons such as food spoilage, equipment breakdown, or business interruption coverage

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a bakery business is around $125 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. If a baker burns their hand while pulling trays from a hot oven, workers’ compensation insurance would help pay for their medical treatment and cover part of their lost income while they take time off to heal.

Each state sets rules for this coverage, but it usually includes medical bills and a portion of lost wages, often with no fixed maximum amount.

The cost of this insurance depends on things like the size of your bakery’s payroll, the kind of jobs your staff do (such as bakers, decorators, or delivery drivers), your history of past claims, and whether you have safety practices in place to prevent accidents.

Commercial Auto Insurance

The average cost of commercial auto insurance for bakeries that offer delivery or catering services is about $165 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage.For example, if your bakery uses a van to deliver cakes and a staff member accidentally hits another car while making a delivery, commercial auto insurance would help pay for the repair costs and any injuries or claims from the other driver.

The price of commercial auto insurance depends on a few things, like how much coverage you want, your past claims, how many vehicles your bakery uses and how much they’re worth, and the driving records of your delivery drivers.

Cyber Insurance

The average cost of cyber insurance for a bakery business is about $140 per month.

Cyber insurance helps your bakery bounce back after a cyberattack or data breach. It can cover the cost of letting customers know their data was exposed, providing fraud monitoring, and meeting legal requirements set by your state.

The cost of this insurance depends on how much customer data your bakery collects, like credit card details, and how many employees have access to that information.

What Factors Impact Your Bakery Business Insurance Costs?

Bakery business insurance premiums are carefully calculated by underwriters based on your business’s risk profile. From the food you serve to your location and claims history, several factors influence what you’ll pay for coverage.

Location

If your bakery is in a place where cybercrime is more common or the state has strict data protection laws, your insurance may cost more.

Type of Bakery

Bakeries that take online orders or payments through a website are more at risk for cyberattacks than small walk-in shops, so they may need more coverage.

Business Size & Revenue

The more money your bakery makes and the bigger your business, the more customer data you probably collect, this can increase the cost of insurance.

Employee Count

The more employees who can access your computer systems or customer data, the greater the chance of mistakes or scams, this can raise your insurance cost.

Claims History

If you’ve filed frequent insurance claims, underwriters will see you as higher risk, leading to higher rates. A clean claims record can qualify you for discounts.

Insurance Provider

Rates vary among insurers. Some specialize in hospitality risks and offer better pricing or more flexible options. Comparing quotes from multiple carriers can save you money.

How To Lower Your Bakery Business Insurance Costs

Running a bakery business can be tough, but your insurance bill doesn’t have to break the bank. While you can’t eliminate the need for coverage, you can take smart steps to reduce your premiums without sacrificing protection. Here are some practical ways to lower your bakery insurance costs:

1. Bundle Your Policies

One of the easiest ways to save is by bundling multiple policies. Most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation insurance, bundling the two through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

2. Ask About Discounts

Insurance companies often reward bakeries that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually. You might also qualify for lower rates if you pay your premium in full instead of in monthly installments.

3. Implement Safety Measures

Accidents can be costly for both your bakery and your insurance provider. However, taking steps to improve safety in your bakery can help lower your insurance costs over time. For example, installing non-slip flooring in wet areas, using wet floor signs during cleaning, keeping walkways clear of clutter to prevent tripping, and regularly checking kitchen equipment like ovens and mixers can all reduce the risk of accidents.

4. Create A Safe Working Environment

A strong safety program can help reduce your bakery’s workers’ compensation costs. For example, you can train your staff on safe food handling to prevent burns or foodborne illnesses, teach proper lifting techniques to avoid back injuries when moving heavy bags of flour, and make sure everyone knows fire safety procedures in case of a kitchen fire.

5. Adjust Your Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your bakery a safer, more resilient business.