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If you think that you don’t need insurance for your handmade products because it’s just a hobby – you could be mistaken. If you sell products, having some level of insurance will help protect you, and your customers.

20 July 2018

Are You Covered? Insuring Your Handmade Business and Products

Are you a bit crafty? Have the panache for making beautiful things? Decided to sell them on Madeit, Etsy, local markets, online, take it global or to family and friends? One thing you may have forgotten, ignored, or deemed unimportant, is insurance!

Having public and products insurance protects the public from something your product or you might do to harm them (accidently of course). For example, if you make a food product and it makes a lot of people sick due to you not refrigerating it correctly, someone might put a claim in against you. Your insurer will defend a claim or perhaps even pay out on the claim for you.

If you think that you don’t need insurance for your handmade products because it’s just a hobby – you could be mistaken. If you sell products, having some level of insurance will help protect you, and your customers.

Insurers are especially concerned when products are for children, babies or the frail. An insurer will also be concerned and ask you a lot of questions about your products if the products are intended either to go on the skin or to be ingested.

They will question the dyes used, in case they cause reactions. They make sure food products and cosmetics are of Australian standards. They look for objects that may dislodge and cause a choking hazard.

Are you covered? A hand reaching out towards a handmade baby mobile with stuffed birds

Insurances You May Need

LIABILITY

Liability is first and foremost as this usually also includes product cover. This covers you if your product or you do something that injures another person. Your beautifully handmade body butter, due to you getting the recipe wrong, may burn someone’s skin. You have a potential claim right there. It’s a misconception that if you just sell online, you won’t need public liability insurance, you will as it also covers product liability.

Are you covered? A woman’s eyes peering out from behind a bed sheet

Do you do markets? Most market organisers will require you to have public liability to attend. Some markets offer that you can buy public liability cover for the day. Just remember this cover is for things like, if your table cloth trips up someone and injures them; it’s not covering your products and the liability they should have on them. Market liability is usually just whilst the market is on.

BUSINESS COVER

Your home-grown business has grown! If you keep stock at home, many home insurance covers do not cover any business activities or stock. Your stock or the equipment you use to make your products will need to be insured under a business policy to have them correctly insured.

Are you covered? A woman’s hands pouring essential oil

If your business has now expanded to have its own premises, you may be liable for insuring the building, landlord’s liability, glass and loss of rent as part of your lease. Read your lease! Ask your solicitor and insurance broker.

OTHER COVERS UNDER A BUSINESS POLICY

Insurance for money, theft, glass, equipment and breakdown. If you have fridges and freezers you rely on, cover for equipment breakdown is a good idea. You can even insure the loss of the stock, if they breakdown.

Government Compulsory Insurances

GOING TO EMPLOY STAFF?

It’s a legal obligation to have Workers Compensation Insurance if you have staff. Some states have the same rates regardless of the insurers, and in some states the prices vary. Seek out professional advice.

Are you covered? A group of arms in a fist bump over a cluttered desk.

Minimise Your Risks

You can also reduce your risk with good policies and procedures. Does your product meet the relevant Australian Standards? Have you had it looked at by a third party? Keep good documents on suppliers, where your raw materials come from.

Feeling a bit lost? Finding it all too confusing? Remember insurance brokers are here to help YOU. Brokers don't charge for quotes or the advice and recommendations they give you. You will have the best policies for your business and you. You can have different payment options and you will have us to help when it comes to making claims. You can be put in touch with other professionals to help you in business such as an accountant, solicitor and bookkeepers.

Remember “Having the right insurance is no accident”.



Words by:
Insurance Broker, Melissa
Insurance Broker & Allsure Co-Director,

Melissa Donaldson

Melissa is an insurance broker and Co-Director of her family’s business, Allsure Insurance Agencies International Pty Ltd. Allsure give you access to Australia’s biggest insurers, with the kind of personalised advice and service only a family business can provide. Your business is their business. Give Melissa a call on 0437 887 312 to see how she can help you, or check out the Allsure website.

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