Last Updated: February 23, 2024, 9:46 am by TRUiC Team

Chocolate Business Insurance

Getting insurance for your chocolate business is essential.

Chocolate businesses need to be protected against things like lawsuits related to employment disputes, product liability claims, and contractual breaches.

For example, your chocolate business could have a customer fall ill as a result of eating one of your chocolates, or you could fail to disclose that a batch of chocolates has nuts in it.

We’ll help you find the most personalized and affordable coverage for your unique business.

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for a Chocolate Business

General liability insurance is — generally speaking — one of the most important insurance policies for chocolate businesses. 

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

Chocolate businesses should consider acquiring additional coverage on top of general liability in order to bolster their protection. Some policies to think about include:

  • Workers’ compensation insurance
  • Product liability insurance
  • Commercial auto insurance
  • Commercial umbrella insurance

When deciding on which insurer to purchase your business coverage from, you’ll usually be presented with one of two types:

  • Traditional brick-and-mortar insurers — These are firms with physical stores, offices, and insurance agents, such as CNA and Nationwide.
  • Online insurers — On the other hand, these firms are run solely online, such as Next and Tivly. These are typically our recommendations as they offer similar quality insurance far more affordably thanks to their lower overheads.

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Cost of General Liability Insurance

On average, chocolate makers in America spend between $500 - $1,200 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for a chocolate business to other professional industries using the graph below.

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.

A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

Graph showing average price of general liability insurance prices per industry

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Find the Best Rate

Discover the best coverage at the lowest rate in our cheapest business insurance review.

Common Situations That General Liability Insurance May Cover for a Chocolate Business

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Example 1: While you're giving a demonstration on hand-dipped chocolates, an excited child breaks free from his parents grasp and sticks his hand into the chocolate tempering machine. He badly burns his forearm and breaks one of his fingers in the process. His parents are angry that the area wasn’t sectioned off properly and threaten to sue you for damages. General liability coverage will likely pay for his medical bills and any resulting legal fees.

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Example 2: Your cleaning crew has just finished mopping the floor in the restrooms when a customer slips and falls. There was no wet floor sign put down at that moment, and you know you could be found responsible for their injuries. With general liability insurance, you can cover their medical costs and any potential settlement.

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Example 3: During a tour of your facility, someone trips over an extension cord in the office area and falls into a large shelving unit, sustaining serious injuries. General liability insurance will likely cover their medical bills and your legal fees if a lawsuit results from the accident.

Other Types of Coverage Chocolate Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:

Workers’ Compensation Insurance

Most states require that business with part-time and/or full-time employees must carry workers’ compensation insurance. This insurance policy helps to cover medical costs if any of your employees become injured while on the job. Additionally, if they are unable to return to work for a period of time, your policy will provide disability benefits.

Product Liability Insurance

Any time that you create a product that will be consumed by the general public, you need to protect your business from the threat of a lawsuit. If a customer falls ill after ingesting one of your products or somehow sustains a serious injury, you could be sued for damages. With product liability coverage you can rest easy knowing your business will be protected in these types of situations.

Commercial Auto Insurance

Making deliveries may be an important part of your daily business operations. And whether or not you use a designated delivery truck or you rely on personal vehicles, you need to invest in a commercial auto insurance policy for maximum protection. Your personal car insurance will not cover your personal vehicle while you’re performing work duties.

Commercial Umbrella Insurance

It is possible for an accident or lawsuit to use up all of the available funds provided by your primary insurance policy limits. If this happens and you don’t have additional coverage, you could be left to pay the remaining expense on your own. Commercial umbrella insurance goes beyond your primary insurance limits to provide the funds you need to keep your business operating smoothly.

Additional Steps To Protect Your Business

Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.

Here are several things you can do to better protect your chocolate business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
  • Stay up to date with business licensing.
  • Maintain your corporate veil.

Chocolate Business Insurance FAQ

Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.

A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Yes. As a food-based entity, obtaining sufficient business insurance for your chocolate business before it opens its doors is an essential step to make sure your investment is protected.

Moreover, depending on the jurisdiction and your business’s unique situation, failing to properly insure your business can put it at risk of legal penalties.

Not necessarily. Certain exceptions may be written directly into your chocolate business insurance policy, and some perils may be entirely uninsurable.

Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.

An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.