Home "Business" hobby due to COVID, need to create business or buy insurance?

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My wife started a hobby of baking. A friend really liked it and so she was like “Hey, can you bake me this cake and I’ll pay you $30”. Next thing we know, friends of friends are now asking for “favor” or ordering. Some baked goods consist of custard, cream and sometimes meat.

I’m very pessimistic and I know that baked goods is very simple and it should be rare to see this kind of problem but I thought what if someone who we don’t really know fraudulently sue us and claim that they got food poisoning or something. We have a decent net worth and I know one huge mistake could be a disaster. Does my wife needs to register her baking as business and maybe start LLC? Although we don’t want to be so serious and pay for those fees. Does she need to buy any liability insurance?

I’m very noob on this topic so I appreciate any ideas or guidance. Thank you!

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If you want to get serious about this it, then I would no doubt register baking as a business and open an llc. Otherwise, you have risks to be easily deceived. Although, on the other hand, if everything is licensed for you, you will have new strings that you can be pulled with. It all depends on how serious you want to get into the bakery business. In general, it is better to turn to specialists on such issues, such as Antony Batty. They will definitely tell you what is the best and most profitable thing to do in this situation. In addition, they can help you grow your business further, of course, if needed.