The cookie and cracker manufacturing industry includes a variety of food processing companies that make cookies, crackers, ice cream cones, and certain other bakery products.
Nearly 400 establishments in the U.S.—from large, multinational companies like Kellogg’s to smaller manufacturers who market more specialized products—are responsible for a combined annual revenue of around $12 billion.
While the larger companies might focus on mass-appeal cookies and crackers, some smaller operations focus on in specialty products like allergen- and gluten-free products, high-end or “indulgence” products, or products that contain unusual or unique ingredients.
Find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
Why Do I Need Cookie and Cracker Manufacturing Insurance?
Cookie and cracker manufacturers produce everything from basic saltine and oyster crackers to various cookies, taco shells, toaster pastries, ice cream cones, and more.
No matter what type of cookie or cracker you make, most manufacturers use a similar process to produce edible goodies for mass consumption.
Cookie and cracker making begins like baking in your own kitchen, but on a much larger scale. Sugar, shortening, and oil are mixed with other ingredients to form dough.
But instead of using a stand mixer to make a few dozen goodies, cookie manufacturers use large industrial mixers that can process up to 2,000 pounds of dough per batch!
Next, the dough is cut, shaped, baked, decorated, and packaged using a variety of industrial machines like hoppers, rotary cutting machines, ovens, stenciling machines, and packaging machines.
At every step, risks are present that can destroy your property, contaminate your product, and cost you millions of dollars or lead to bankruptcy.
Imagine the impact of spoilage, supply shortages, equipment breakdowns, and recalls on your ability to operate, earn revenue, and pay your bills. And if something like a tornado or fire destroyed your plant, how would you rebuild and continue to operate?
You also need protection from the costs of lawsuits if someone sues you, as well as the excessive costs if you experience a product recall.
Cookie and cracker manufacturing insurance is your first line of defense in these situations. It can:
- Help you pay for repairing or replacing damaged property.
- Help you cover expenses during a temporary closure.
- Help you pay for defense costs and damages if you are sued.
Lawsuits and Recalls Are a Serious Threat
Cookie and cracker manufacturers are particularly vulnerable to lawsuits related to products that are contaminated or determined to be harmful in some way.
What’s more, if a product is contaminated, mislabeled, or determined to be unsafe, it may have to be recalled—a costly and damaging process that may haunt your company for years.
In recent years, cookie and cracker manufacturers have come under fire for the use of trans fats, accusations of marketing unhealthy products to children, and mislabeling (e.g., a product contains an allergen like tree nuts that is not indicated on the label).
Insurance can protect cookie and cracker manufacturers from these kinds of claims, especially if they are sued. A few insurance policies can be the difference between recovering financially after a lawsuit or product recall, and being forced to close to your doors.
- Commercial general liability insurance. This is necessary for occasions when your business is careless and causes bodily injury or property damage. It provides coverage if someone is injured on your premises, as well as for claims of advertising or copyright infringement, libel, slander, and false advertising. It would respond to claims of mislabeling (e.g., a “gluten free” product actually contains gluten), making false health claims (e.g., “low fat cookies can help you lose weight”), or when a person is injured at or because of your business.
- Product liability insurance. Covers your financial responsibility for losses or injuries to a user, buyer, or bystander caused by a defect or malfunction of your product. If you are sued because tainted cookies make someone sick, you may be required to pay for medical costs, compensatory damages, economic damages, attorney fees, court costs, and more.
- Product recall insurance. Covers the costs associated with a product recall. If a product is contaminated and must be removed from the market, your product recall insurance will cover product removal and disposal costs, loss of profit, product replacement, and public relations and communications costs.
Property Insurance Protects Your Buildings and Equipment
Commercial property insurance. Helps protect your manufacturing facilities (buildings) and their contents, (e.g., office equipment, hoppers, cutting machines, ovens) in the event of fire, weather events, theft, vandalism, and other covered perils.
In addition, you may need various other types of property coverage:
- Business interruption coverage, or business income coverage. Protects your earnings if your business is unable to operate because fire, hail, wind, equipment breakdown, etc. If you are forced to close your doors for a while in order to make repairs, it pays for rent, employee salaries, lost income, relocation fees, and more.
- Utility interruption coverage. Reimburses you for costs related to breakdowns in utility services (water, electrical) that force you to temporarily stop production.
- Equipment breakdown coverage. Helps you repair or replace damaged machinery that is essential to keeping your production line working.
- Cargo and goods-in-transit coverage. This includes ocean marine coverage and inland marine coverage, and protects your products as they are transported from place to place.
- Spoilage coverage. Offers financial protection for the costs of goods that spoil on-site.
- Additional flood, windstorm, or earthquake coverage. This may be necessary to protect your business property, depending n your location.
Other Important Coverage for Cookie and Cracker Manufacturers
Your obligation to protect your customers, suppliers, and the general public does not end with basic property and liability insurance. Talk to your agent about additional coverage that you are likely to need to fully cover your risks.
- Environmental practices or pollution liability coverage. Protects your company from the costs associated with damage caused by improperly disposing of hazardous waste or causing environmental harm.
- Commercial auto coverage. This is necessary if your business owns and operates any vehicles. It covers your vehicle fleet and drivers in the event of an accident or other vehicle damage that occurs as you transport your product from place to place.
- Excess liability coverage, or commercial umbrella coverage. Provides liability protection above and beyond the liability coverage included in a commercial general liability and business auto policy. A commercial umbrella policy would pay when your other liability coverage has been exhausted.
Protect Your Employees With Workers’ Compensation Insurance
Cookie and cracker manufacturers rely on fast-moving, complex machinery that must be operated with great skill and care. In addition to teaching employees how to safely operate machinery and always follow safety procedures, you must provide workers’ compensation insurance.
Workers’ compensation insurance protects you and your employees from the costs of workplace injuries and illnesses. It pays for medical bills and lost wages if someone is injured on the job, regardless of who is at fault.
How Much Does Ice Cream and Frozen Treat Manufacturing Insurance Cost?
The cost of cookie and cracker manufacturing insurance depends on several factors, including the size of your business and the types of policies you need to cover your unique risks.
Some other variables that can impact the cost of business insurance include:
- Number of employees
- Types of manufacturing equipment
- Size and location of your building
- Volume and geographical distribution of your products
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right cookie and cracker manufacturing insurance. They’ll walk you through some handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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