Short answer: Often not by law. State cottage food rules, such as those in Texas and Colorado, generally don't require home food sellers to carry liability insurance. Farmers markets, event venues and stores that carry your products often do, usually with the venue named as an additional insured. Homeowners policies generally exclude business liability, so a product liability or general liability policy fills the gap.
What the law says
Cottage food rules focus on permits, labeling, allowed foods and sales channels rather than insurance:
- The Texas Department of State Health Services' cottage food page covers food handler training, labeling and allowed foods, with no insurance requirement listed.
- Colorado's cottage foods producer checklist from CSU Extension encourages liability insurance but doesn't require it.
Rules differ by state, and some cities add requirements. Check your state health department's cottage food page.
Who actually requires insurance
- Farmers markets and craft fairs often require vendors to carry general liability and name the market or property owner as an additional insured.
- Coffee shops or stores that resell your goods may require product liability coverage and a certificate.
- Event venues and festivals commonly set minimum limits in vendor agreements.
University of California's cottage foods program recommends insurance to protect your personal assets.
Why homeowners insurance isn't enough
Homeowners liability coverage generally excludes claims arising from business activities. A customer who gets sick or has an allergic reaction from your product could bring a claim your homeowners policy won't cover. Business equipment and inventory are also limited.
What to look for
- [ ] General liability with products-completed operations, which covers bodily injury from food you sold
- [ ] Additional insured endorsements for markets and venues
- [ ] Event or per-market policies, if you only sell occasionally
- [ ] Business property coverage for mixers, ovens or a market tent
- [ ] Commercial auto, if you deliver regularly. See side-business insurance.
Bottom line
Read your market's vendor agreement first. Even where the law doesn't require it, a modest liability policy usually protects your savings. See bakery insurance.
Questions? Contact Alishahi Insurance or call (877) 711-4545. Vea bakery insurance.
Frequently asked questions
Is insurance required for cottage food in Texas?
Texas DSHS's cottage food rules don't list an insurance requirement, but markets and stores may require it.
Do farmers markets require vendor insurance?
Often yes, typically general liability naming the market as an additional insured.
Does homeowners insurance cover my cottage food business?
Generally not for business liability; product claims are usually excluded.
What policy covers someone getting sick from my food?
General liability with products-completed operations coverage.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.