Insurance

So what is it?
Who need’s it?
What type do you need?

The three key questions above are common on the forums, most often the question is related to Public Liability Insurance prior to a Craft Fair.

With this post I’ll try and cover as much as I can, but I’m not an Insurance Broker (although I used to sell life cover, it was many years ago, and things have changed)

So lets start with what is it?

To put it simply, if there is a risk, there is insurance to cover against the risk (somewhere).
Basically, if you have the risk of loss, be it stock, life or limb, you pay a premium to someone who is gambling that the risk does not occur, so that they get to keep you money for nothing, but if something goes wrong, they will pay to put it right *.

So what can I insure? Well everything where there is a risk of loss. So by law we have to insure our cars (third party insurance is the only compulsory part, fire and theft are added to make you feel better about paying). In that way if we injure someone, we have insurance to pay them compensation.

Car Insurance
So what do you need, lets start with the car, as I’ve mentioned it above, you drive down to your local supplier to pick up some raw material (be it wool, paint, wood, jewellery findings), or are driving to a craft fair where you will have a stall. You are using your private car for business, and need to check that your vehicle insurance covers you to do that, (I have know of a case where someone was coming home from a craft fair and their car caught fire due to a leaky pipe, She lost £1,400 worth of stock, and because it was classed as business use, the insurance did not pay her for the contents, even though it was a fully comp policy, if she had been shopping and had the same value of good in the car, they would have happily paid as it was a private trip).

Key Person Insurance (Recommended)
If you do your business full time like myself, then I think this is a must, if anything should happen to me, either disability or death, what happens to the income of my wife and son (who may have to nurse me for years).

Premises Insurance (Recommended)
Because I rent a studio, any one of my neighbour’s work spaces could go up in fire, and I would loose everything, from stock, equipment, raw materials.
Check with your landlord what cover they have, and if you a covered on it for anything, (they must by law tell you what cover they have and if you are included).
If you work from home, again check your policy, many policies will be either voided if you work from home, or exclude a large percentage of any settlement in the result of a claim.

Contents Cover (Recommended)
I have as part of my rented property insurance separate sections of cover
Contents; insures my stock at cost price without any addition for profit (this also covers the stock in the event of a break-in.
Plant & Equipment ; my cover is for replace as new, but is also available on an indemnity basis where wear and tear is taken into account when settling the claim.

Goods in Transit (Very Recommended)
This not only covers me when I’m going to or from craft fairs, but consignment by consignment when I’m sending stock via a carrier to a gallery.

Money (cash loss) insurance (Recommended)
Here the example, I’ve been at a craft fair all day, and during the day some little Oik has been watching who does well, and who doesn’t and he want some money for booze or drugs, He stops me and threatens me with a knife if I don’t give him my money, well he can have it, I’m insured, I have a record of my takings, and I’ll call the police (I also have a list of the serial numbers written in my diary, which list’s my sales, and is kept well away from the cash when I’m in transit). It also covers my petty cash in my studio, my stamps etc. So I’m also happy when I’m taking cash to the bank etc.

Trade Credit Insurance (Personally Recommended if you do Sale or Return)
I have stock out around the country with Galleries, most of it on Credit (sale or return), so what happens if a gallery goes belly up 200 miles away. I’ve lost say £400 worth of stock (average cost price of stock, not RRP), No, Why? Because this is what this insurance covers against, when you work out how many thousands of pound worth of stock it covers, its well worth having.

Business Interruption Insurance (Optional)
Does what it says on the label, pays out if you can’t operate your business, Check with the broker what exactly it covers and how much you get.

Public liability Insurance (Highly Recommended)
Most Craft fairs require you to have your own, make sure it covers legal fees, cost and expense such as representation at any hearings.

Product liability Insurance (Highly Recommended)
If you make (how else would you find this blog), sell or repair anything, this covers you in the result your are being held liable for damage or injury arising from defects in their design or manufacture, even if you have not been negligent.

Professional Indemnity Insurance (Optional)
This is compulsory in some professions, but if you’re making things, it may be worth considering.

Where to go for more info

Start with Business link http://www.businesslink.gov.uk/bdotg/action/layer?r.s=sl&r.lc=en&topicId=1075196424
Also consider http://www.abi.org.uk/MemberSearchResults.aspx?searchQuery=

Find a local broker here http://www.biba.org.uk/ConsumerHome.aspx

To find details about online comparison site try http://www.which.co.uk/advice/best-price-comparison-sites/index.jsp

Personal feelings
Woody uses a small business policy that has been tailored to meet my requirements, I pay extra for my extras, and would always recommend shopping around for whats best for you

You may also like to try one of these (placing the detail of the following is not a recommendation, merely giving some useful links

http://www.craftinsurance.co.uk/index.htm
http://www.nmtf.co.uk/
www.a-n.co.uk or http://www.a-n.co.uk/research/article/574229