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Home Baking Insurance Considerations

August 12, 2020

Setting up a home baking business can be very rewarding. It’s a chance to draw on your talent and passion for baking, to delight your clients with delicious creations and make an independent living as your own boss. Perhaps that, along with the lower overheads compared with a specialist bakery premises, is why there has been a boom in home baking business start-ups in recent years.1

Regulations for Home Baking Business

That said, there is a lot more to starting your own home baking business than simply making cakes. There will be equipment to buy, product ranges to research and develop, and a range of regulations to adhere to.

For instance, anyone starting a new home baking business, or taking over an established one, must register the business with their local authority as well as understanding and implementing food safety and hygiene standards in preparation for local authority inspectors. You can find more information on those requirements here.

Home Baking Insurance: Protect Your New Venture

As with any start-up, it is important you think about home baking insurance as part of your business plan. Remember it is there to protect your business and livelihood should something go wrong.

The exact types and level of home baking business insurance you need will depend on the specific nature of your business and the risks it faces, but some of the most common home baking insurance covers include:

Public and product liability insurance for home bakers

You’ll be preparing food for the public so you’re responsible for ensuring it is safe to eat. That means adhering to health and safety standards, but things can still go wrong and these insurance covers will protect you should that happen. For example, if a customer was injured while on your premises or fell ill after eating your products, these insurances would cover you against a claim for compensation.

Employers liability insurance for home baking businesses

If you plan to employ people, this insurance cover is required by law. It is there to help with legal costs and compensation if a member of staff is injured or falls ill at work and makes a claim against you.

Home bakery business buildings and contents insurance

Even though you will be operating from home, don’t assume that your home insurance will cover you if the building was affected by a serious incident like fire, your vital equipment was stolen, or your stock was spoiled – for instance due to a refrigeration breakdown. Check whether you need to take out separate business buildings and contents insurance, to ensure your business activities do not invalidate your home insurance and that your business can recover if the worst should happen.

Goods in transit cover for home bakers

If you plan to deliver customer orders, or have them delivered by a courier for instance, this insurance will protect you from financial losses if an order is lost or damaged in transit.

Home bakers’ business vehicle insurance

If you are planning to carry out deliveries yourself, you also need to think about how you plan to insure your vehicle. Business vehicle insurance is for those vehicles owned through the business but you can also consider using your personal vehicle by adding ‘business use’ and ‘carriage of goods’ to your existing motor insurance.


Depending on the nature of your home baking business, you might also want to consider covers such as business interruption to cover lost income during a crisis, computer equipment insurance and, particularly in the current climate, cover for human infection diseases.

A more detailed list of the insurance you might need for your home bakery business is available here.

Making Your Home Baking Business COVID-19 Secure

At present, there is also a requirement to adhere to government COVID-19 Secure guidelines, to both protect any employees you might have and to ensure you can serve customers safely.

These guidelines, in essence, relate to maintaining social distancing at work, during deliveries, and when customers come to collect orders, but also to issues like minimising the risk of surface transmission during collection and delivery.  Detailed guidelines around customer collection and delivery are available here, and include:

  • Avoid taking orders in person on the premises. Instead, encourage customers to order online or by phone.
  • Provide customers with specific, staggered collection times to ensure you only deal with one customer at a time.
  • Pack your cakes in disposable, lidded containers, which should not be returned by consumers for reuse.
  • Establish a dedicated, low-risk area for collections, which should be well away from the kitchen area and at a distance from other members of staff.
  • When dealing with collections keep a sensible distance from customers, avoid passing cake boxes from hand to hand, wash your hands after every handover, and sanitise your collection area throughout the day.

Get Your Home Baking Business off to a Flying Start: Call on Local Goodwill

The good news is, if you’re thinking about starting a home baking business now, your timing might be ideal. Research carried out recently found that more than half of consumers (53%) planned to support local food businesses after lockdown by spending more.2

So, by capitalising on that goodwill, you have a chance to get your home baking business off to a flying start. That will mean promoting your business effectively, for instance posting product images and menus online and via social media, but also reassuring potential customers that you are taking steps to manage the risks from COVID-19.

It is also worth thinking about how you can work with other local independent businesses ‒ from party shops to pubs and other venues – to cross promote your services, as well as using discounts and refer-a-friend promotions to build up a customer base in the early days.



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