Cottage Food Law Insurance
Get A+ rated insurance for your cottage food business in 10 minutes or less with FLIP’s easy online application.
Cottage Food Insurance Benefits
Cottage food law requires insurance for home-based food businesses. Learn about the advantages of coverage options through Food Liability Insurance Program (FLIP).
Completely Online
Get your quote, tailor your coverage, and purchase your policy all from the comfort of your home faster than you can say “homemade cinnamon rolls.”
Product and Equipment Protection
Protect your business from expensive food poisoning claims and even protect your priceless stove where you make your delicious homemade jams and jellies.
Affordable and Personal
We keep it affordable with USA-based agents who don’t make commission. We keep it personal by giving you the power to increase your limits to give your custom cakes the coverage they need.
What Is Cottage Food Law Insurance?
Cottage food insurance covers people who make food in their homes and sell it to the general public. It may help you pay for third-party claims of injury or damages and meet contract requirements to sell at events or local shops.
Just like with any business, there is the potential for accidents to occur. General and product liability insurance can help protect you from the risks of serving food from your own home. You can also use tools and equipment coverage to insure the items you use to make your tasty treats.
Imagine if you bake a fresh batch of homemade chocolate chip cookies for a customer. Later you find out the cookies contained traces of peanuts and the customer had a severe allergic reaction. They sue you for unlabeled allergens and now you owe them several thousand dollars in medical bills and fees.
Without cottage food law insurance your small business could be facing financial ruin. However, with insurance, you can file a claim and FLIP can help mitigate or even eliminate what you pay out to the customer.
How Much Does Cottage Food Law Insurance Cost?
You can get your cottage food insurance policy starting at $25.92 per month, and we also offer an annual policy starting at $299 per year.
Our base cottage food law insurance policy covers up to $2,000,000 in general and product liability.
What Does Cottage Food Insurance Cover?
With cottage food insurance from FLIP, you can receive coverage for:
- General liability (third-party bodily injury and property damage)
- Product liability (food poisoning)
- Cyber liability (phishing scams, data breaches, etc.)
- Tools and equipment (aka “Inland Marine”)
- Professional liability (aka “errors and omissions”)
Do I Need Insurance to Sell Baked Goods From Home?
While you don’t legally need insurance to sell baked goods from home, you’ll likely be required to have insurance when selling your treats at events or other businesses because the owners don’t want to assume the liability of your products if an accident occurs.
You also cannot insure your business with your homeowners or renter’s insurance. These policies typically won’t cover you for any for-profit activities or claims.
With the average defense lawyer charging between $250–$350 per hour, and the average claim totaling thousands of dollars, a single accident could cripple your business financially. You need insurance to operate your business from home with peace of mind.
Let's Talk About Numbers for Cottage Food Law Insurance
Cottage Food Insurance Coverage Details
General Liability
Aggregate Limit: $2,000,000
General liability helps to protect your business from third-party bodily injury and property damage claims caused by your business operations. For example, if a customer came by your home to pick up an order and they slipped on water in your kitchen, this coverage could help pay for their injuries.
Product Liability
Aggregate Limit: $2,000,000
Product liability insurance can help you cover the cost of injuries or damages caused by the goods you sell. Unfortunately, food poisoning is a natural hazard for any food business. This type of coverage may lower or eliminate the costs associated with food poisoning claims—as well as other standard product liability claims.
Cyber Liability
Aggregate Limit: $100,000
Cyber liability insurance helps your business recover from cyber attacks, such as data breaches or phishing scams. Someone may hack into the electronic payment system you use or use malware to steal customer data from your computer. This coverage helps you retrieve lost or stolen data and refund stolen business funds.
Damage to Premises Rented
Aggregate Limit: $300,000
Damage to premises rented can help protect your business from the cost of repairs for damages done to the space you rent for your business, such as a commercial kitchen or commissary. These damages could include an accidental fire started in the kitchen space you rent, or scuff marks on the floor of a farmers market venue left by your booth.
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Coverage Details Limits
General Liability Aggregate Limit
$2,000,000
Products – Completed Operations Aggregate Limit
$2,000,000
Personal and Advertising Injury Limit
$1,000,000
General Each Occurrence Limit
$1,000,000
Damage to Premises Rented to You Limit (Any One Premises)
$300,000
Liability Deductible
NO DEDUCTIBLE
Business Personal Property / Inland Marine Limit (Any One Article / Aggregate)
$5,000/$10,000
Business Personal Property / Inland Marine Limit (Per Occurrence) – Deductible
$250
Medical Expense Limit
$5,000
FAQs About Cottage Food Insurance
What Is a Cottage Food Business?
A cottage food business is essentially a home-based cooking or baking business. What sets it apart from other similar ventures is that the food you sell is made or prepared in your primary residence.
What Is Cottage Food Law?
Cottage food law helps to regulate bakers and business owners who make and sell food from their homes.
Laws typically vary by state but often include registering your business, getting a license, and earning your food handler’s permit.
Depending on where you live, there may also be restrictions as to what kind of food you are allowed to sell from home, or whether or not you need to pass a home inspection to legally operate your business.
What Are the Insurance Requirements for Starting a Cottage Food Business?
In order to protect your home-based business from claims, you will need general liability and product liability coverage.
General liability insurance helps guard against third-party injury or property damage. Product liability insurance is important because it can help financially protect you from the repercussions of foodborne illness.
You can also add tools and equipment, so if your baking equipment is damaged in a flood or stolen in a burglary, insurance can help repair or replace the equipment. We offer several different limits depending on your business needs.
We recommend purchasing a cottage food law insurance policy before starting your business so you are protected the moment you start selling your product.
What Are the Risks of Not Having Insurance for My Cottage Food Business?
Without cottage food law insurance, you will be shouldering the cost of claims all on your own. This could mean paying for medical bills, legal fees, repair costs, etc., all completely out of pocket.
Here are some examples of what FLIP’s cottage food business insurance could help protect you from:
- Paying for medical costs from a customer who fell ill with food poisoning from the food they purchased from you.
- Repairing damaged equipment from a flooded kitchen.
- Losing customers because you’re not a licensed and insured business.
- Sacrificing revenue due to your online ordering system experiencing a cyber security attack.
Get a quote today and start protecting your business!
Why Should I Choose FLIP for Cottage Food Law Insurance?
FLIP policyholders receive the following benefits:
- A+ rated coverage by AM Best
- 24/7 access to certificates of insurance, policy documents, and additional insureds through the user dashboard
- The knowledge of our expert insurance agents
- A cheap policy premium because our agents don’t make a commission
Can I Include an Additional Insured With My Cottage Food Liability Insurance Policy?
Yes! Additional insureds are unlimited and free with your FLIP policy.
To add an additional insured, simply log in to your user dashboard and add your additional insured’s information.
