By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policyfor more information.

Industry Insights

Words of wisdom from our business insurance experts.

Cookie Business Insurance: Costs, Coverage, and Quoting Process

4 min read
April 19, 2023
Cookie Business Insurance: Costs, Coverage, and Quoting Process

Insurance is an integral part of all business plans. Making sure you are well protected and covered from risks associated with your specific industry is very important to ensure the longevity of your business. If you have a stellar cookie recipe that you’d like to make a business out of or have an established cookie business, knowing the key points on insurance for your business is a great way to stay ahead of any challenges you may face. 

Like other insurance processes, cookie insurance requires a quoting process based on coverage options. The associated costs for cookie insurance will depend on the depth of your coverage. In this article, we’ll go over everything you need to know about cookie insurance so you can make an educated decision as to what is best for your entrepreneurial endeavors. Let’s dive in. 

Who Needs Cookie Insurance?

Whether you are a baker, shop owner, or baked goods retailer, your business could benefit from insurance. There are risks associated with all entrepreneurial endeavors and the cookie business is not an exception. Finding the right insurance for you depends on which level of cookie business you operate on. Let’s take a look at the various levels of the cookie industry from those who make delicious treats to those who sell them to customers. 

Cookie Manufacturers

Cookie manufacturers are the bakers of tasty morsels. They lay the groundwork and make the product that will eventually make its way into the customer’s hands. Whether you are a small business that operates primarily from home or a larger-scale producer with commercial kitchens or even factory lines, insurance can protect you from certain risks associated with the work you do. 

Cookie manufacturers have a few different options to consider when it comes to protecting their business with the appropriate insurance. These include workers' compensation, general liability, cyber liability insurance, business owner policies, and commercial auto insurance. We’ll dive into the specifics of these types of policies and what they mean for cookie manufacturers later in this article. 

Cookie Distributors

Cookie distributors act as the middleman between manufacturers and retailers. While distributors may not make cookies or sell them directly to consumers, they do face unique risks for the business that they do. The proper insurance coverage can help to protect them from common risks that businesses at this level face. This includes protecting inventory, workers, and property used to store and distribute cookies until they reach the retailers. 

Many distributors also incorporate the transportation of goods into their business model which comes with its specific set of risks and issues that may occur. Finding the correct plan to insure your cookie distributor business is key to protecting all your hard work so that you can focus on getting everything down with a prosperous business. 

Cookie Retailers

Cookie retailers deal directly with customers to sell delicious baked treats. Retailers tend to work with the cookie distributor rather than the bakers themselves. Since most retailers will sell more than one brand of cookie and operate with a storefront. There are specific risks that apply to them and not to distributors or manufacturers. 

Whether you have an in-person store or an online storefront, the proper cookie insurance can allow you to rest easy knowing that you are covered. Many circumstances can cause a financial burden to cookie retailers if they are not covered under the appropriate plan. Knowing what your level of business needs is key to protecting your business and giving you the peace of mind to focus on growing a thriving business. 

How Much Does Cookie Insurance Cost?

Cookie insurance business cost varies widely on a few different factors including:

  • Size of operation
  • Claim history

It will also depend on the type of cookie business you run. Insurance can cost less than $100/month for small-scale manufacturers or over $1,000 for larger-scale distributors. It all depends on the specifications of the cookie business you operate. 

Here's a quick overview of the key coverages and costs of insurance:

  • Product Liability: $1,000 annually
  • Commercial Property: $2,000 annually
  • Workers Compensation: $4,000 annually

What Risks Do Manufacturers, Distributors, and Retailers Of Cookies Face?

The risks faced by businesses depend largely on the type of work and services they provide. A baker who is manufacturing cookies will undoubtedly face a very different set of risks than a business that focuses primarily on distributing or selling the cookies. The main three levels of the cookie industry include manufacturers, distributors, and retailers. Let’s take a look at the types of risk each type of business faces so that you are educated on the best type of insurance for your entrepreneurial endeavors. 

Cookie Manufacturers

Those who are baking the cookies are the ones that are getting their hands dirty with hard work to make delicious treats for consumers. This means they face a unique set of risks. Some common risks faced by cookie manufacturers include:

  • Injuries in the kitchen like burns or cuts. 
  • Damage to commercial property or customer property
  • Employee medical expenses
  • Lawsuits from injured employees
  • Libel and slander lawsuits
  • Disability benefits
  • Accidents involving delivery vehicles
  • Damage to delivery vehicles including theft, vandalism, or weather damage
  • Fraud from cyber attacks
  • Data breach costs
  • Cyber extortion payments

As you can see, a business with a main priority of baking cookies can face a slew of risks that can cause significant financial damage if the business has to pay out of pocket. Choosing the right insurance coverage plans for your cookie manufacturing business can make all the difference in the longevity and financial stability of your cookie business. 

Cookie Distributors

Cookie distributors need proper insurance to ensure that the workflow is not disrupted and that operations flow smoothly regardless of the various risks they face. There is some overlap with cookie manufacturers when it comes to protection from cyber attacks as well as workers' compensation but it is advantageous to know the risks distributors face to make sure they have ample coverage where it is needed. Here are a few of the risks that cookie distributors face:

  • Injuries to employees who are storing packing and delivering cookies
  • Damage to delivery vehicles transporting cookies from manufacturers to storage or from storage to retailers
  • Damage to customer properties during deliveries
  • Damage to commercial property 
  • Medical bills for injured employees
  • Full coverage of delivery vehicles to protect the vehicle itself as well as coverage for mishaps or accidents that the vehicle may be at fault for
  • Cyber protection against data breach, fraud, and cyber extortion payments from distributor websites

As you can see, the work carried out by cookie distributors revolves heavily around the process of storing and transporting cookies. This includes the workers performing the labor as well as the vehicles used in the process. Having ample insurance for the tools of the cookie distributor trade will ensure that the business is protected against the common risks it faces. 

Cookie Retailers

Cookie retailers can be online or in-person. Regardless of whether they operate with a storefront or a website, cookie retailers require insurance to protect the business. Depending on the size and scope of your cookie retail shop, you’ll need customized insurance to fit the needs of your business. Here are a few common risks faced by cookie retailers:

  • Customer slip and falls in storefronts
  • Employee accidents and injuries 
  • Cyber Protection for online cookie retailers against data breach, fraud, and extortion payments
  • Damage to a storefront property
  • Lawsuits related to products sold
  • Injured employee lawsuits
  • Disability benefits
  • Damage to store vehicles from theft, vandalism, or weather damage 
  • Accidents involving store vehicles

Cookie retailers need to think about coverage for the website, employees, and customers involved in their business. This means significant coverage for cookie retailers to ensure they are well protected against the risks they face. 

What Types Of Insurance Do They Need?

While the specific type of insurance will vary based on whether the cookie business is a manufacturer, distributor, or retailer, they all generally require the same basic types of insurance. These include:

General Liability

This type of insurance covers the basic risks of operating a business whether you are making, distributing, or selling the cookies to the customers. This includes risks like injuries, accidents, damage to property, and libel and slander lawsuits. Learn more about General Liability Insurance here (click here).

Product Liability & Recall

This covers issues related to your product if a customer is sick, injured, or sues due to the product. It also covers recall situations and the costs associated with a product recall. Learn more about Product Liability and Recall Insurance here (click here).

Commercial Property

This covers the physical property your business owns or rents. Things like cooking equipment, inventory, computers, equipment and other items used in the business. Learn more about Commercial Property Insurance here (click here).

Workers Compensation

This insurance covers the needs of employees in case of accident or disability. Most states legally require businesses to have some form of workers' compensation for their employees. This coverage protects businesses against costs associated with medical expenses, disability benefits, and employee lawsuits over injuries. Learn more about Workers Compensation Insurance here (click here).

Commercial Auto Coverage

This insurance is integral to businesses using commercial vehicles, especially those who are delivering goods to customers, storage, or shops. Good commercial auto coverage will cover businesses in the event of damage to vehicles, accidents, or damage to commercial or customer property. Learn more about Automobile Insurance here (click here).

Cyber Liability

If your cookie business uses a website or online storefront, cyber liability insurance is vital. It will protect businesses against costs associated with fraud, data breaches, and cyber extortion payments. Learn more about Cyber Insurance here (click here).

Business Owner’s Policy

This type of insurance bundles commercial property insurance and general liability. This type of policy covers businesses at a cost-effective price which makes it very appealing to many different types of businesses. Learn more about Business Owners Insurance here (click here).

What Is The Process Of Getting A Quote?

The process will vary based on the type of insurance you choose to get for your cookie business. However, these are the common steps you’ll need to take to get a quote:

  1. Speak with a Fullsteam advisor and provide underwriting data
  2. Wait 24-48 hours for Fullsteam to negotiate quotes
  3. Review proposals and finalize coverage

Once you complete these steps you can purchase your cookie insurance and continue to grow your business with the peace of mind that you are protected against the risks your entrepreneurial endeavors face. 

Get in touch with your dedicated insurance advisor today and learn more about how we can protect your business.

Tyler Crawford
by Tyler Crawford
Email AuthorLinkedIn Profile
Talk to a risk
management specialist
schedule consultation