The Two Types of Coverage Every Baker Needs

Many bakers assume that general liability insurance is enough. It is not. As a food business, you need a specific type of coverage that general liability alone does not provide.

General Liability Insurance

General liability covers bodily injury and property damage claims that happen at your business location or in the course of your business activities. For example: someone slips and falls at your market table. Or you accidentally damage a customer’s property during a delivery.

Important: general liability does not automatically cover claims arising from your products after the customer takes them home.

Product Liability Insurance

Product liability covers claims that your product caused harm — an allergic reaction, foodborne illness, or injury from a defective product. This is the coverage that matters most for bakers.

Scenario: a customer buys your cookies and has a serious allergic reaction, even though you listed all ingredients correctly. Their medical bills are $10,000. Without product liability coverage, that claim comes to you personally. With it, your insurer handles it.

You need both. General liability + product liability. Most policies for food businesses include both.

FLIP — The Top Recommendation for Cottage Food Bakers

FLIP (Food Liability Insurance Program) — fliprogram.com/home-based-bakery

FLIP is built specifically for cottage food operators and home bakers. It is the most commonly recommended option in this space for three reasons:

• Cost: ~$299/year (under $50k revenue) | ~$399/year (over $50k). That is under $25/month.
• Coverage: General liability + product liability in one policy. Farmers markets and events included. Online sales included.
• Instant COI: You can generate a Certificate of Insurance immediately from their online portal. When a market asks for proof of insurance, you have it in minutes.
• Unlimited additional insureds: You can add any number of farmers markets or events to your policy at no extra cost.

Other Options Worth Knowing

• Thimble (thimble.com) — offers per-event coverage, which is useful if you’re just starting and only doing one or two markets a year. More expensive per-event than FLIP annually, but lower upfront cost.
• Insureon (insureon.com) — an online comparison marketplace that gets you quotes from multiple carriers at once. Good for comparison shopping.
• Next Insurance (nextinsurance.com) — general business insurance that includes food businesses; ~$420/year for a solo baker.

Questions to Ask Any Provider Before Buying

• Does this include product liability — not just general liability?
• Am I covered for farmers markets and pop-up events?
• What is the per-occurrence limit? (Most markets require $1M minimum)
• Are allergic reaction claims covered?
• Can I get a Certificate of Insurance immediately?
• Am I covered for online orders and shipped products?