Choosing insurance for your creative business
Many crafters aren't aware that they need insurance, and often don't know what type of insurance they should be looking for even if they do realise that they should be insured. Below you can find out 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. 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:
Product liability – 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 – 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.
Tip – Many craft fairs won’t let you have a stall unless you can show them your public liability insurance certificate.
Tradesman Insurance - 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 here or here.
Professional indemnity – 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.
Employer’s Liability - 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/insurance/
Craft Cover - http://craftcover.com
Tradesmen Saver - http://www.tradesmansaver.co.uk/dressmakers-insurance
Combined Market Traders and Insurance Association - http://cmtia.co.uk/
For insurance for artists check out the useful list of providers here: http://www.publicartonline.org.uk/resources/practicaladvice/adviceartists/insurance.php
IMPORTANT – All insurance policies have exclusions so make sure you have a good look through to understand what you are and aren’t covered for. For instance most policies won’t cover claims that arise as a result of your negligence, or your failure to comply with health and safety or product safety laws. 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 small print. When in doubt ask before you buy. On that note don't forget to notify your home insurer if you start to run a business from home or it could invalidate your policy.