The Risks of Running a Bakery: How to Stay Safe and Profitable

| September 21, 2023

Running a bakery is a rewarding experience, but it's also a challenging one. Bakery owners must constantly deliver exceptional goods while maintaining profitability. This can be difficult, especially when considering the many risks associated with running a bakery, such as property damage, premises liability, equipment breakdowns, crime, spoilage, and more.

Here is an overview of some of the most common risks facing bakery owners:

  • Property damage: Bakeries face a high risk of property damage due to the presence of ignition sources such as stoves, ovens, and fryers. Fire caused by malfunctioning electrical equipment or carelessness can spread quickly between fuel sources, putting your property and any equipment, materials, or supplies at risk.
  • Business interruption: Just one brief business interruption can be incredibly costly for a bakery, leading to serious reputational damages or long-term closures. Common interruptions for bakeries can include equipment failure, relocation, fires, and natural disasters.
  • Premises liability: Premises liability exposures at bakeries can directly affect customer safety and, when injuries occur at your business, you could be held responsible. Accidents related to slips, trips, and falls are a common source of concern.
  • Crime: Bakeries face a moderate crime risk due to the presence of cash on the premises. However, thieves (including your employees) do not need direct access to cash to steal from you. Equipment, supplies, and securities are all potential targets for wrongdoers.
  • Equipment breakdowns: Bakeries rely on equipment such as stoves, ovens, and fryers to complete work. Equipment breakdowns can lead to significant business interruptions and costly repairs or replacements.
  • Commercial automobile exposures: Bakeries face commercial automobile exposures when making deliveries or traveling to pick up supplies. Driver fatigue, hazardous weather conditions, and distractions can lead to accidents.
  • Product liability: Product liability is a major concern for bakery owners. Food poisoning, the presence of foreign objects, and other factors can potentially harm a customer, resulting in a lawsuit and costly settlement.
  • Spoilage: Bakeries store large quantities of food that relies on equipment such as refrigerators to stay fresh. Spoilage exposures are a considerable concern, as equipment malfunction can lead to costly losses of supplies and revenue.
  • Workers' compensation: Bakeries have a number of hazards that could lead to an employee being injured on the job, leading to a workers' compensation claim. Normal, everyday tasks can lead to accidents, such as burns from ovens and fryers, cuts from knives or bread slicers, and falls on wet and slippery floors.

Proper risk management practices can reduce certain exposures, but no system is 100% effective in ensuring an incident-free workplace. 

Contact us today to learn more about how we can help you protect your bakery with tailored insurance solutions and risk management strategies.