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How Liability Insurance Helps Cottage Food Operations

This article was written by the Food Liability Insurance Program, one of the leading insurance providers for small food businesses, including many cottage food operations. Although some parts of this article may contrast with our opinion, we think it’s best to have a variety of perspectives when making an important decision.

The cottage food law makes it possible for food vendors, who sell their goods at farmers markets, festivals, or from home, to work from their own home kitchens. But in order to safely take advantage of this legislation, it is important for cottage food operators to protect themselves from liabilities such as injuries to third-parties, food contamination, allergic reaction, missing or damaged supplies, or damaged rented property.

One option that can protect cottage food operators from being left alone with these liabilities is liability insurance. Insurance can offer cottage food vendors the comfort of knowing that if a lawsuit is brought against them, they won’t be left alone — they’ll have their insurance policy to protect them.

In order for your insurance to really support your business, you need a policy that is both affordable and comprehensive. As you look for insurance, be sure that it includes the coverage that you need such as general and product liability insurance. It’s also essential to make sure that the insurance provider is credible and licensed to sell in your state.

You have a few options when it comes to finding the perfect liability insurance for you and your business. You can purchase from an insurance program that was designed especially for food vendors. This can be a convenient and probably more affordable option if the policy offered includes all of the coverage that you need.

Another option is to contact an insurance agent and ask them if they could find you a provider and a policy that would properly cover your business. The advantage of this route is that you will probably find a policy that is perfect for you. The disadvantage is that waiting for a quote and having a policy written for you will probably be a much more expensive option.

It is possible that your homeowners insurance or your renter’s insurance may extend to the liabilities of your home-based business, but it most likely won’t. You can always contact your homeowners insurance agent to find out if it would be possible to extend your homeowners coverage to cover your business liabilities.

There are other steps besides insurance that you can take to protect yourself from liability. Of course, it’s important to take appropriate precautions when preparing and labeling your goods. Be sure that you include allergy information on your labels.

You should also consider making your business into an LLC. This won’t completely protect you from liabilities, but it will help protect you from being held personally responsible for liabilities incurred by your business.

Beginning a cottage food business is an exciting move, and if you take appropriate steps to protect yourself and your business from liabilities, you can move forward with confidence without worrying about unexpected costs bogging down your business and your future.

For more details about insurance for Cottage Food Operations you can go to FLI Program’s Cottage Food Law page.

Article provided by: The FLI Program Team

The Food Liability Insurance Program (FLIP) offers general & product liability insurance for food vendors at farmers markets & festivals, for street food vendors and mobile food vendors, for distributors of fruits, vegetables, meats, dairy etc. Annual Policies starting at $299 a year that can be purchased online at

The program is designed and managed by Veracity Insurance Solutions, LLC an expert and leader in the commercial liability industry with over 30 years of experience.