As a baker, running your business comes with many challenges and opportunities. One of those challenges is managing your equipment including ovens, mixers, or fridges; just to name a few of the more important ones. Without your equipment working in good order, your business stops operating. Imagine not being able to bake your loaves of bread, or make your cookies, cakes, pastries, and other specialty goodies. That’s why it’s critically important to consider insurance for bakeries and equipment breakdown insurance to protect your business.

Equipment breakdown insurance is an essential risk management tool for all bakeries. This type of insurance for bakeries can cover the cost of repairing or replacing equipment that breaks down. Bakery Insurance can also be extended to cover spoilage of stock, which is crucial if you store refrigerated/frozen meat and other products for pies, pastries, and other baked goods; or if you bake in large quantities with costly ingredients.

Insurance for bakeries

What Does Bakery Equipment Breakdown Insurance Cover?

Equipment breakdown insurance can cover sudden and accidental breakdowns of nearly all of the equipment bakers use on a daily basis. This can include the following:

• Ovens,
• Mixers,
• Freezers,
• Refrigerators,
• Computers,
• Air conditioners,
• Cooktops and Cookware;
• Dough dividers, mixtures, and moulders.

In addition, one of the most important additional insurance cover options for a baker’s consideration is spoilage of stock, which will affect most bakeries regardless of size.

What Doesn’t Bakery Equipment Breakdown Insurance Cover?

Like all insurance policies, there will be aspects to consider where coverage will not be available, and some of the typical exclusions will include:

• General wear and tear,
• Failure to perform normal maintenance,
• Theft;
• Acts of God including lightning, storm, flood, earthquake, and volcanic eruptions.

How Does Equipment Breakdown Insurance Work?

Equipment breakdown insurance works by reimbursing you for the cost of repairing or replacing your broken equipment.

• Replacing: If a piece of expensive equipment breaks down completely and needs to be replaced, having an insurance policy to cover those costs is important to any small business.
• Repairing: But what if the equipment just needs to be fixed? This would also be covered by insurance and can help your bakery with cash flow and avoid unwelcome surprises.

If it ever comes time to make a claim, like with all insurance policies, there will be certain pieces of information the insurer will require, including (but not limited to) proof of the damage, a repair invoice, or a receipt for a new piece of equipment/replacement food stock.

Cover for Spoilt Stock

The addition of spoilage of stock cover can also help reduce anxiety when, for example, a fridge breaks down and ruins your refrigerated items. This bakery insurance coverage ensures you are adequately compensated to replace the damaged stock.

Brief example – you are a small to medium sized bakery and rely heavily on your commercial fridge to store food items. Overnight, your fridge fails, and the next day you must throw out thousands of dollars’ worth of spoiled items. Having the right equipment breakdown insurance policy in place would assist as it would pay for repairs to the fridge and would also reimburse you for the cost of the spoiled items. 

But what about Business Interruption?

It can be the case that when a key piece of machinery breaks down, it’s more than just a simple fix-it job. Quite often, as a result of machinery breakdown, your profits may be adversely affected as well as the ability to meet payroll. There might also be additional operational costs during the repair or replacement of the machinery. The good news, some machinery breakdown insurance will extend to include business interruption, although the extra cover will typically attract a higher premium. Your specialist insurance adviser will be able to assess the available options, and not all insurers will be the same.

Reducing Risk For Your Bakery

Whilst equipment breakdown insurance is a fantastic way to address one of the challenges in running a bakery; it is also essential to implement a few basic risk management strategies to keep your operation running smoothly:

• Follow a regular cleaning schedule,
• Regularly inspect and maintain equipment and machinery,
• If possible, keep spare parts on hand,
• Ensure the manufacturer instructions are adhered to;
• Check all electronic wiring is in good working order and has sufficient capacity for the equipment used.

How Do I Get Bakery Insurance?

If you’re a baker, then you know how vitally important your equipment is – it’s the difference between trading or not.

KBI has partnered with The National Baking Industry Association to provide tailored and discounted insurance for bakeries.

To get a customised insurance quote tailored for bakeries, click here.