Insurance for your Craft Business is often a mute topic but one that needs to be addressed and dealt with very early on for anyone wanting to take their hobby into a business or setting up their own Craft Business.
As stated already previously and repeatedly by myself and many others both crafters and business owners – if you exchange money for your services or products – this is no longer a hobby but a business transaction – you might not like to hear that but its fact and therefore by definition of now being a business transaction you need to operate fully and be compliant with the law – UK and EU as well.
I hear this often said to me – many crafters aren’t aware that they need insurance – yes you do !!
Is your car and your house insured – lets ask the question as well – is your phone insured – are you insured ie Life Insurance etc etc – well then why would you think that the business and craft work that you are wanting to run as a business would not need insured as well.
What might be the case is that often people don’t know what type of insurance they should be looking for even if they do realise that they should be insured.
I have set out below the types of insurance you should be considering if you run a craft business, and details of where you can purchase them.
It may seem tempting to keep costs down by not being insured, especially when you are only making a very small profit on your business. However, if for instance someone was injured by one of your products or tripped on part of your craft stall at a market you could be looking at thousands in damages, or if you are teaching or tutoring and someone is hurt in your session/lesson you might not feel the same way.
So for the sake of what often comes to less than £100 a year you can get peace of mind.
There are 5 main types of insurance that people running a craft related business need to consider:
If you supply products then you are responsible for any injury to a person, or damage to their property, which may occur as a result of the use of your product. Product liability insurance can meet the cost of any claims that arise.
Public liability covers any injury or property damage that occurs to a member of the public in connection to your business. If for instance you teach sewing and someone in your class sustains an injury, or someone trips over some goods you laid out at a craft market this is the insurance you need. It can also be used to defend any claim made against you as well as for compensating any injured party. Basically this covers you – selling at craft events/fairs, sell at parties, teach a face to face class, want to attend a craft event that requires proof of insurance.
Tip – Many craft fairs won’t let you have a stall unless you can show them your public liability insurance certificate.
You can often find that if you don’t have traditional retail premises that tradesman’s insurance may be a better fit for your business. This can provide cover for your tools, your premises and any potential liability that may arise. You can find specific tradesman insurance for dressmakers – see details below.
If you give advice as part of your business (if you are a business consultant or a craft teacher) or offer a service (like social media management) you need professional indemnity insurance to protect you from any claims of professional negligence. This covers you from any claims of professional negligence, covers you against client financial loss and covers most of any claims made – this is often one especially in the Crafting Business world people do not cover or leave out. If you run classes of any sort you need to cover and if you do personal tutoring most definitely.
If you employ anyone to help you with your business then you need to have employer’s liability insurance. This protects you from any claim from employees who say there were injured or became ill as a result of their work whilst in your employment. This insurance is compulsory in the UK and you must have a minimum coverage of 5 million pounds.
If however you are a family business, and not a limited company you may be exempt from this requirement. For more information please look at the Employers’ Liability (Compulsory Insurance) Act 1969, it came be viewed online here: http://www.legislation.gov.uk/.
Other insurance you may also want to consider is accident & sickness insurance (to help you pay the mortgage etc if you are unable to work), vehicle insurance if you use a business vehicle and cancellation insurance for shows and events so you don’t end up out of pocket if they don’t go ahead for any reason.
To get quotes for craft insurance try the businesses below:
GM Imber & Sons – http://www.gmisl.co.uk/
Simply Business – http://www.simplybusiness.co.uk
Craft Cover – http://craftcover.com
Tradesmen Saver – http://www.tradesmansaver.co.uk/dressmakers-insurance
Combined Market Traders and Insurance Association – http://cmtia.co.uk/
Craft Insurance / Ian Wallace – http://craftinsurance.co.uk/
Market Traders – http://www.markettradersinsurance.co.uk
Artists Network – www.a-n.co.uk/AIR – this insurance is part of a membership set up with company
Intasure – http://www.intasureforbusiness.com/
For insurance for artists check out the useful list of providers here:http://www.publicartonline.org.uk/resources/practicaladvice/adviceartists/insurance.php
Please do note though – all insurance policies can have exclusions so make sure you have a good look through to understand what you are and what you are not covered for.
Ie. Most policies will not cover claims that arise as a result of your negligence, or your failure to comply with health and safety or product safety laws – Toys being sold that are not CE Marked, Labeling now complying with UK or EU legislation – Candle makers and Soap Makers take note.
You may also have to show where you have completed a Risk Assessment form for each and every event you have attended, your stall, your products and so forth – so just make sure you understand all that is in the fine print as well as what you think you are being insured for.
Also some of the policies may only cover selling at events and shows and not online or trading from commercial premises not from home – so double check the fine print. Be also aware of how selling from home or running your business from home will have on your home and contents insurance as well. Have you even notified your home insurer that you are running a business from home or thinking of starting a business from home and make sure it does not or would not invalidate your policy.
Along that same note – be aware of your car insurance – if you are using your car for business purposes you need to make sure that there also you have your insurance documentation stating that you can use if for travel for work purposes and inform your provider – again sadly if you do not and you have an accident and claim etc you can actually invalidate your claim if not being used for the purposes insured for.
This may well incur some extra costs on your policies but to be honest, some of the extra costs are so small and minor but necessary and again you can factor lots of the costs into your overheads and pricing structure.
But basically before you buy or purchase any insurance, if in doubt, ask before you buy.
Do`t be afraid or wary of insurance and being insured – I will say it like this – there is no such thing as being a little bit insured – you either are or you are not.
Its like being pregnant – you can not be a bit pregnant – you either are, or you are not.
And for me its the same with insurance – there are many others you can look into once you are up and running and feel want to get further insurance for.
Accident and Sickness Insurance – if you are unable to work this can replace lost earnings, usually up to 65% for a maximum of 12 consecutive months.
Income Protection Insurance – very similar to above, except it can also cover earnings all the way up until planned retirement.
Cancellation Insurance – this is one that some Crafters and Businesses cover as it covers any financial loss from cancellation of shows or events.
Unfortunately we live in a litigation society – whether we think its right or not you will need to make sure you have legal cover for any eventuality there is out there – to be honest if you Risk Assess running a Craft Business as part of your Market planning and involve it within your Business Plan you will see immediately where and what Insurance you need and why.
Insurance is a no brainer for me – so make it a no brainer for you as well.
Do not take the risk – just get covered – seriously Real Craft Businesses do.