Why do donut shops need insurance?
Your donut shop may be a fan favorite, but it still faces several risks. A customer could sue over food poisoning, or your delivery van could injure others in an accident. Donut shop business insurance provides the coverage you need to keep your business afloat.
Find the right coverage
Insureon helps donut shops find insurance quotes that match their unique insurance needs.
Get free expert advice and peace of mind knowing you have the right property and liability coverage for your small business.
What types of donut shop insurance do I need?
These policies cover the most common risks of owning and running a donut shop.
Business owner’s policy
A business owner's policy, or BOP, is a cost-effective way for donut shop and bakery owners to buy commercial property insurance and general liability coverage under one plan.
- Customer bodily injuries
- Damaged business property
- Business interruption incidents
Workers’ compensation insurance
Most states require workers' comp for donut shop businesses that have employees. It also protects sole proprietors from work-related medical bills that health insurance might deny.
- Employee medical expenses
- Disability benefits
- Legal costs from work injuries
General liability insurance
A general liability policy covers common third-party risks, including claims of food poisoning and customer property damage. It's required for most commercial leases.
- Slip-and-fall accidents
- Damaged customer property
- Libel and other advertising injuries
Commercial auto insurance
This policy covers financial losses from an accident involving your donut shop’s delivery van or other vehicle. Each state has its own requirements for auto liability insurance.
- Medical bills from an accident
- Property damage from an accident
- Vehicle theft and vandalism
Cyber insurance
Also known as cyber liability insurance, this policy helps donut shops recover from cyberattacks and data breaches. It's recommended for any business that stores customer information.
- Data breach notification costs
- Fraud monitoring services
- Cyber extortion payments
How much does donut shop insurance cost?
A small donut shop will pay less for commercial insurance than a larger company.
Factors that affect donut shop insurance cost include:
- Size and type of business
- Donut shop equipment (e.g., ovens)
- Business income
- Business location
- Types of insurance purchased
- Policy limits and deductibles
- Coverage options, such as an additional insured
How do I get donut shop insurance?
It's easy to get donut shop insurance if you have your company information on hand. Our application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application.
- Compare insurance quotes and choose a policy.
- Pay for your policy and download a certificate.
Insureon's licensed insurance agents work with top-rated U.S. providers to find the right insurance plan for your donut shop, whether you work independently or hire employees.
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FAQs about donut shop insurance
Review answers to frequently asked questions about food liability insurance and other policies for donut shops.
Will insurance cover my donut shop if it's forced to close temporarily?
Yes, if you're forced to close your donut shop due to a catastrophic event, business insurance can help cover costs until you're ready to reopen.
Business interruption insurance, sometimes called business income insurance, helps pay for day-to-day operating expenses, lost income, and even relocation if your small donut business is forced to shut down due to a covered property claim. This includes closures from fire, vandalism, windstorms, and burglaries.
In addition, equipment breakdown coverage protects against financial losses related to the sudden breakdown of a refrigerator, freezer, point-of-sale device, or other piece of equipment. However, it doesn't cover normal wear and tear.
Do donut shops need to have product liability insurance?
Even though it's generally not required by state law, you still need and should get a product liability policy.
Product liability insurance covers claims related to:
- Allergic reactions
- Food contamination
- Marketing defects, such as labeling errors or lack of warnings
Any business in the supply chain, from manufacturers to wholesalers for your donut shop, could be held responsible if a product causes harm. For example, if a customer gets sick after eating a donut or bagel at your shop, you could find yourself facing a lawsuit. Product liability insurance would then help pay for attorney's costs, court-ordered judgments, and other legal fees.
Product liability coverage is often included in your general liability policy.
Is food poisoning covered by insurance?
Yes, the product liability coverage in your general liability policy protects your small business from food poisoning claims due to undercooked or spoiled food.
Although general liability insurance covers food poisoning claims, it won't protect against the cost of replacing spoiled perishable goods. For that, look to food contamination and spoilage insurance. This coverage helps pay for loss of inventory if your refrigeration equipment unexpectedly breaks or is interrupted by a power outage.
You can add food contamination and spoilage insurance to your commercial property coverage or business owner's policy. To find out if this endorsement is right for your donut store, contact a licensed Insureon insurance agent.
What other types of insurance are recommended for donut shops?
In addition to the insurance policies mentioned above, small business owners of donut shops should consider the following types of coverage for complete protection:
- Commercial property insurance: Covers business property, such as fryers, blenders and mixers, stored at your storefront or business location. It protects against financial losses from fires, storms, and burglaries.
- Hired and non-owned auto insurance (HNOA): Your personal auto policy won't cover business-related driving, which is why donut shop owners need HNOA. This policy provides auto liability coverage for personal, leased, and rented vehicles used for work purposes.
- Commercial umbrella insurance: Umbrella coverage boosts the protection of your general liability, commercial auto, and employer's liability insurance, activating when the limit is reached on your donut store's underlying policy.
- Commercial crime insurance: Crime insurance protects both your donut shop and customers from financial losses caused by dishonest employees, such as stolen property, credit card fraud, and forgery. A fidelity bond is a common type of commercial crime coverage.