How to Get the Best Insurance Rates for Your Craft Business

The best insurance for craft business owners is crucial to protect your handmade business from the unexpected. Whether you sell online, in-person at craft fairs and shows, or operate a small retail space, having the right insurance can provide peace of mind.

As a crafter, you put time, effort, and money into your creations and business – so make sure you protect your hard work.

This article will explore the unique insurance needs of arts and crafts entrepreneurs. We’ll look at the types of policies and coverage options you should consider, tips for getting affordable rates, and how to choose the best insurance partner for your needs.

With the right liability and property insurance, you can focus on your passion for making and creating, knowing you’ve taken steps to cover your business from potential issues down the road.

Keep reading to learn what crafters need to think about to find the best insurance for their craft business.

Key Takeaways

Types of Insurance Craft Businesses Should Consider

When starting or running a craft business, it’s crucial to understand the different types of insurance available to protect your company. The right policies provide a safety net in case the unexpected occurs. This section outlines key insurance options crafters should consider to cover different risks:

1. General Liability Insurance

This is one of the most important insurance policies for any small business. General liability insurance helps cover costs if your business is sued for:

• Bodily injury
• Property damage
• Personal injury
• Advertising injury

Many common exposures faced by crafters and artisans would fall under a general liability policy. For example, if a customer trips and falls at your booth at a craft fair, or claims your product damaged their property, this insurance would cover legal defense costs and damages (up to the policy limits).

General liability coverage is especially crucial for handmade businesses that:

• Sell at fairs, shows, and markets
• Offer classes or workshops
• Have a physical storefront
• Sell wholesale/on consignment

Typical starting limits are $1 million per occurrence and $2 million aggregate. Higher risk businesses may need more coverage. Compare quotes from multiple insurance companies to find the best rate.

2. Product Liability Insurance

For crafters selling handmade goods, product liability insurance is highly recommended. This type of policy protects your business if a customer claims injury or property damage caused by your products.

For example, if someone claims:

• A toy you crafted injured their child
• A lotion you formulated caused a rash
• A chair you built broke and caused an injury

Product liability insurance would cover the legal costs to defend you, and pay damages up to your policy limits. Without it, you’re personally responsible for these expenses.

The costs can vary based on your product risk and sales volume. Expect starting rates around $600 per year for $1 million in coverage.

3. Professional Liability Insurance

Professional liability insurance, also called errors and omissions (E&O) insurance, covers claims alleging your business made a mistake resulting in financial harm.

This policy is most relevant for crafters who provide services like:

• Consulting
• Training
• Design work

For example, if a client alleges your consulting advice caused them to lose money, professional liability insurance helps pay legal fees and any settlement costs.

Depending on your profession, coverage often starts around $1 million annually. Compare costs from providers like Hiscox and The Hartford.

4. Commercial Property Insurance

Commercial property insurance covers your business against losses and damage to your physical assets. It commonly protects:

• Your building (if you own it)
• Leasehold improvements
• Inventory
• Equipment
• Furnishings
• Computers/hardware

This policy can be critical for craft businesses with:

• A home studio
• Retail space or workshop venues
• Valuable equipment like kilns
• Significant inventory of raw materials or finished products

Property insurance covers events like fire, theft, vandalism, and natural disasters up to your chosen limits. Expect minimum premiums starting around $1,000 per year.

5. Business Owner’s Policy (BOP)

A business owner’s policy (BOP) combines general liability, property and business income insurance into one bundled policy. It’s an efficient way for small businesses to get essential coverage.

Benefits of a BOP include:

• Streamlined underwriting process
• Coverage tailored for small/home business needs
• Wider range of perils covered
• Potential for cost savings

Downsides are less flexibility to choose limits and add-on coverages. Weigh the pros and cons when getting quotes.

6. Workers’ Compensation

Workers’ compensation insurance covers medical and lost wage expenses if an employee is injured on the job.

Most states legally require this policy once you hire W-2 employees. Fines for non-compliance are steep.

• Costs range from $500 to $10,000+ annually depending on payroll, industry risk, and location.
• Some states waive requirements for sole proprietors/partnerships without employees.

Check your state laws to see if you need coverage.

This overview covers the major small business policies crafters should consider. I hope it provides useful context to understand your core insurance needs and risks. Please let me know if you have any other questions!

Why Insurance Matters for Crafters and Artisans

Getting the right insurance for your craft business is extremely important to protect your hard work and livelihood. Here are key reasons every artisan, maker, or crafter should consider insurance:

1. It Safeguards Your Assets

Without insurance, all of the business assets you’ve worked so hard to accumulate are vulnerable. Whether it’s thousands of dollars of equipment, inventory, displays, or your home workspace, you’re personally on the hook for replacing stolen or damaged property without coverage.

Commercial property insurance and business owner’s policies provide affordable protection that could save you from financial ruin after an incident. Don’t leave your business vulnerable when coverage is readily available.

2. It Covers Legal Expenses and Settlements

Even if you run an absolutely perfect business, you can still face lawsuits and legal actions from unhappy or injured customers. The typical business owner will encounter dozens of potential liability risks each year.

General liability insurance covers the substantial legal bills and possible settlement costs if you ever get sued for property damage, bodily injury, or other covered claims.

Without this protection, you risk paying hundreds of thousands in legal fees out of pocket. Don’t take that chance.

3. It Protects Your Personal Assets

Here’s a scary truth: Unless your business is set up as a separate legal entity like an LLC, you are personally liable for all of its debts and liabilities. That means a major lawsuit could bankrupt you and put your house, car, and savings accounts at risk without proper coverage.

Business insurance helps shield your personal assets from any judgments or losses tied to your craft business activities. Don’t put your family’s financial security in jeopardy by going uninsured.

4. It Gives You Peace of Mind

Knowing you have outstanding insurance takes a huge worry off your shoulders. You can confidently sell your products, teach classes, or craft for clients knowing you will be covered financially in the unlikely event of a loss or lawsuit.

Great insurance provides the peace of mind all entrepreneurs and small business owners deserve. Don’t lose sleep because you failed to protect yourself.

5. It Allows You to Focus on Your Passion

As an artisan or crafter, you got into business because you love designing, making, teaching, and creating. Insurance allows you to focus your time and energy on those passions instead of stressing about risks.

Let a great insurance provider like Next or Hiscox handle protection so you can keep doing what you love.

6. It May Be Required by Law

States require nearly all employers to carry workers’ compensation insurance to cover job-related employee injuries. Failing to comply can result in huge fines from $25,000 up to $250,000.

Don’t put your business at risk for non-compliance. Make sure you understand your state’s requirements.

7. It Helps You Win Contracts and Opportunities

More and more vendors, show managers, and partners will require you to add them as “additional insureds” on your policy to work with them. This proves you carry adequate coverage.

Having outstanding insurance makes it easy to take advantage of these opportunities. Make sure you have the right policies to showcase clients and vendors.

8. It’s a Wise Investment

Quality business insurance provides invaluable protection at affordable rates for most crafters starting around a few hundred dollars annually. That’s a small price to pay for shielding your livelihood.

Don’t put cost before properly protecting your passion. Get quotes to secure the right policies at great value today.

I hope this breakdown clearly shows the importance of insurance and motivates you to get outstanding coverage. Please let me know if you have any other questions!

Smart Ways to Get Budget-Friendly Insurance

Finding cost-effective insurance for your craft business is possible with the right strategy. Follow these expert tips to keep your premiums low:

1. Compare Quotes From Multiple Providers

Prices for the same coverage can vary dramatically between insurance companies. That’s why it pays to get quotes from several providers before choosing a policy.

Good companies to check rates with include:

• Next Insurance
• The Hartford
• Hiscox
• State Farm
• Progressive

Look for at least a 10-20% spread between high and low bids. Go with the best deal.

2. Ask About Discounts

Many providers offer premium discounts for things like:

• Years in business
• Membership in a craft association
• Completing safety training
• No claims history
• Paying premiums upfront

So be sure to inquire about discounts when getting quotes. It’s an easy way to lower costs.

3. Raise Your Deductible

Opting for a higher deductible (the amount you pay before insurance kicks in) reduces the premium you pay.

For example, raising your deductible from $500 to $1,000 could lower your premium by 15-30%. Just be sure you can afford the higher out-of-pocket amount in the event of a claim.

4. Limit Your Risk Exposure

Your premiums are based on the type and amount of risk an insurer takes on. Limiting potential risks lowers your costs.

For example:

• Carry lower product inventory to reduce property risk
• Avoid offering services to limit professional liability
• Have clear contracts and warnings to reduce claims

5. Insure Only What You Need

Don’t pay for extra coverage you don’t actually need. For example, a home-based crafter may not need:

• Commercial auto insurance
• Workers’ comp
• High liability limits

Carefully evaluate your risks to avoid buying unneeded policies.

6. Bundle Multiple Policies

Buying two or more insurance policies from the same provider can unlock bundling discounts of up to 20%.

Consider combining your:

• General liability and commercial property
• Homeowners and business insurance
• Auto insurance and business policy

7. Use a Captive Agent

An independent “captive” insurance agent who works with multiple providers can help you find the best value across many carriers. Avoid agents tied to just one company.

8. Pay Annually, Not Monthly

Most insurers charge extra fees/interest for monthly payment plans. Paying your full premium annually avoids these costs to save 10-15%.

9. Claim Discounts Promptly

Many insurers reduce premiums for consistently claim-free policy periods. Be sure to ask for and apply any “no claim” discounts after renewal periods without any claims.

10. Raise Deductibles Over Time

As your business matures, you can afford higher deductibles. Gradually increase them every 2-3 years to maintain low premium costs.

I hope these tips help you secure the essential insurance coverage you need at budget-friendly rates. Let me know if you have any other questions!

Special Insurance Considerations for Craft Fairs and Shows

Selling your handmade creations at arts, crafts, and vendor fairs involves unique insurance needs. Follow these tips to make sure you’re covered:

1. Look for Events Requiring Insurance

Many fairs and shows now require vendors to carry and provide proof of insurance naming the event as “additional insured”.

For example, they may require $1 million in general liability coverage and ask for a certificate of insurance. Read the application carefully – you may need to get coverage just to qualify.

2. Understand Coverage Gap Risks

Standard general liability policies only provide coverage when you’re open for business. At craft shows, that introduces risk:

Setup and Tear Down

You typically won’t be covered for any incidents during setup and tear down before/after show hours. For example, damages from dropping a heavy display on another vendor’s booth.

Off-Hours Theft

If your booth is burglarized overnight, your insurer may deny the claim since you weren’t “open” for business.

Parking Lot Liability

Any incidents in the parking lot may also fall outside standard policy coverage time-frames.

3. Consider Event Insurance

To fill coverage gaps, many crafters get standalone special event insurance for craft shows. These are short-term policies that cover a specific fair or festival.

Benefits include:

• Broader time-frames – Coverage for setup through breakdown
• Property protection – Theft/damage for off-hour incidents
• Parking areas included – Liability for parking lots and adjacent spaces

Event policies are affordable, often just $100-$300 for a 1-3 day show. Compare options from Next and The Event Helper.

4. Review Homeowner’s or Renter’s Policy

Some homeowner’s insurance policies provide limited coverage for “business activities” conducted by the policyholder. This may offer an alternative option for craft fair protection.

However, limits are often low (e.g. $2,000-$5,000) and many exclusions apply. Read your policy carefully to see if it could work as an option.

5. Learn Fair Vendor Requirements

If getting insurance seems overly burdensome, some options include:

• Sell without insurance – Apply to fairs that don’t require vendor coverage
• Rent booth space – Some fairs include insurance for booth renters
• Join associations – Memberships may include insurance benefits

Review all the vendor requirements before applying to each fair.

The right insurance provides peace of mind when showcasing your wares. Evaluate event policies, homeowner’s coverage, and fair rules to determine the best solution. Let me know if you need help assessing your craft fair risks and insurance options.

Conclusion – The Best Insurance for Craft Businesses in 2023

Securing proper insurance is essential for protecting your craft business . In summary:

• Evaluate your risks and insurance needs for your specific business model and activities. Common policies like general liability, product liability and property insurance provide core protection.
• Shop multiple providers to find the most affordable premiums. Ask about bundling discounts and no-claims incentives.
• For craft fairs and shows, secure special event insurance to fill gaps in standard policies. Or review homeowner’s coverage for potential backup protection.
• Work with an independent insurance agent to get tailored recommendations and the best value.
• Don’t wait – get quotes and secure adequate coverage now to safeguard your business. The right insurance allows you to focus on your passion of creating and making, not worrying about risks.

With smart planning, every crafter can find cost-effective solutions to protect their hard work and secure their future. Wishing you great success!

FAQs About Craft Business Insurance

What are the main types of insurance I need?

The core policies most crafters and artisans should consider are:

• General liability – To cover claims of injury/property damage
• Product liability – For protection against issues caused by your products
• Property – To cover damage to your business assets and equipment
• Business owner’s policy – For combined liability and property coverage

How much does insurance cost for a small craft business?

Expect to pay a few hundred dollars annually at a minimum. Budget $500-$2,000+ based on your coverage limits, assets, sales, and risks. Compare quotes to find the best rate.

Where can I get insurance as a crafter?

Top insurance companies include:

• Next Insurance
• Hiscox
• The Hartford
• State Farm

What does craft fair insurance cover?

Special event policies for fairs provide broader coverage for setup/teardown, off-hour theft, parking areas, and damage claims. Home insurance may offer limited backup coverage too.

How can I get more affordable premiums?

Tips to save on insurance include bundling policies, raising deductibles, limiting risks, comparing quotes, claiming discounts, and paying annually.

Who sells insurance for handmade businesses?

Companies like Next, Hiscox, and The Hartford cater specifically to the needs of crafters, artisans, and other home/micro-business owners.

Let me know if you have any other questions!