Insurance and Your Craft Business
Did you know that your homeowner's insurance won't cover theft or loss
for your craft business? When your craft is a hobby, it is covered,
but the instant you take the step into turning your craft into a business,
you will no longer be covered.
In some cases, by running a business in your home and not informing
your insurance company can also cause your regular homeowner's insurance
to become invalid, meaning if your house burns to the ground, your insurance
company would not have to pay on the claim.
You should first contact your insurance company. Often they have riders
that can be added to your homeowner's insurance that will cover your
craft business.
You should cover all supplies, tools, equipment, and inventory of
completed items.Think about everything you use for your business. Do
you use your computer, printer and fax machine for your craft business?
Be sure to include those too. You should ask about how your insurance
will cover inventory fluctuations. In November, your inventory will
likely be much higher than it would be in the first week of January,
if you do a lot of holiday craft shows. With this kind of coverage,
your monthly insurance rate will change, and you will have to report
on inventory changes to your insurance company each month.
Like with all businesses, rates can widely vary. If the insurance
coverage quote seems high from your regular insurance company, it would
pay to shop around. Some companies even cater to those who run home
and small businesses. Your savings can be significant just by making
a few phone inquiries to competing insurance companies. Getquotez is the fastest most convenient way to get
free auto and home insurance quotes! Try it risk free today!
Important Insurance Issues
(By Susan West - Courtesy of www.sunshineglassworks.com)
- Some shows may require liability insurance. Check with the promoter of the
shows and with your insurance agent. Before shopping for insurance, put some
thought into what you want/need to know. Insurance coverage can be for
liability or liability and property. Regular homeowner's insurance in most
cases will not cover any inventory, materials, equipment, etc. that you use for
your business. You need to consider what you want covered.
Do you want coverage for:
- Finished work, raw materials, tools, equipment, work in progress
- At home/studio, at craft/trade shows, in transit
- Loss/damage from fire, flood, storms, theft, vandalism, etc.
- Product liability, bodily injury, property damage, personal injury, advertising
- At main place of business, landlords (craftmalls/shops,etc.), show promoters -
do you wish to have them named as additional insureds?
Be sure that your product is:
- Insurable
- Complying with state and federal health and labeling laws
- Has the proper disclaimers built into your labels
The best thing to remember is to do your research into the necessary issues
with your town and state. Good luck with your business!
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