Wholesale and Retail Bakery, Equipment and Business Interruption

A Victorian bakery came to us as it relocated to new premises. The business ran in two directions - a retail shopfront where walk-in customers buy directly, and wholesale distribution to grocery retailers across the state. There were eight employees and turnover sat around $1.1 million.

The building was insured through the body corporate, so no building cover was needed. What the business needed was a pack built around its operations: $20 million public liability, $700,000 of contents, business interruption, and fire and flood cover for the equipment. The kitchen ran a serious amount of plant - commercial baking plant and refrigeration.

We mapped the operation and the equipment list, then took a properly structured business pack to market.

• We approached eight markets for a pack covering liability, contents and business interruption.
• We pushed on the equipment cover, since the client specifically wanted fire and flood protection for the equipment that keeps the bakery running.
• We confirmed the operational detail - the retail and wholesale split, minor fit-out works, and the absence of EPS in the build - so underwriters were comfortable with the risk.

A bakery lives and dies by its equipment and its ability to keep producing, so the contents and business interruption sections were where the work went.

We approached eight markets; several did not have appetite for the food-manufacturing exposure. Flood cover on the equipment also narrowed the options, since not every insurer offers it.

Sizing the business interruption and contents sections correctly mattered too. If the oven or the proofers go down, a bakery cannot trade, so the cover had to reflect both the value of the plant and the income at stake while it is being repaired or replaced.

We placed the business pack through Zurich, with the contents and business interruption sections the bakery needed.

The bakery moved into its new premises with cover that protects the equipment it depends on and the income it would lose if production stopped.

This case shows what a business pack is for. For a manufacturer, getting the contents and business interruption sections right is the difference between a policy that ticks a box and one that actually keeps the business going after a loss.