As a handmade business artist, you spend so much time perfecting your art, enjoying the creative process and experimenting with new products. Let's be honest, the business side of things can be a bit - meh. I don't blame you.
Google is swarming with so much conflicting information. Especially when the information you find may not be tailored to your specific niche and business.
I'm here to debunk this confusing insurance fiasco so you can confidently insure your handmade business.
Insurance essentials for your handmade business
Did you know? You need to let your home & contents Insurer know if you are running your handmade business from home?
Many home and contents Insurers have restrictions for manufacturing/running any type of business from home. So, it is important that you advise them immediately or you could void your cover all together.
This also goes for any other line of insurance you have where advising them of the business is relevant, so you may need to run it past them all.
What is Public Liability Insurance and why do handmade businesses need it?
By now, while running your creative business, you would have heard of Public Liability Insurance. This is one of two types of insurance you will need as a minimum.
Excuse the Insurance lingo but, Public Liability Insurance is designed to protect you against Personal Injury and Property Damage arising from your business/hobby activities.
You are probably thinking "how would my gorgeous little business cause personal injury or property damage?"
Well, the risk of this occurring in front of your eyes happens in your daily operations. Here are a few instances that you would need to call upon your Public Liability Insurance:
- Someone comes to collect their purchase at your home or shop. However, it is dusk and they trip up your front stairs falling forward and chipping their tooth. They are holding you responsible for their personal injuries.
- While dropping orders off at the post office, you place some parcels on the ground while writing up the next envelope. Someone walks past and trips over your parcels causing personal injury.
- You're setting up your market stall early one Sunday morning. The gazebo you're setting up collapses on one side damaging the products set up in the market stall next to you.
On another note, every market across Australia will require you to have your own insurance if you want to trade at their market. When you purchase your policy, you will receive a Certificate of Currency. This confirms that you are insured.
What is Products Liability Insurance and why do handmade businesses need it?
The other minimum insurance you require is Products Liability Insurance.
This type of insurance is designed to protect you against Personal Injury and Property Damage arising from the products you sell. Anyone who is manufacturing/making any items for sale should have Products Liability Insurance in place.
While a majority of artists believe their products are low risk, unfortunately we know all too well that "things" happen regardless of what product you are making.
Here are a few instances that you would need to call upon your Products Liability Insurance:
- Your perfectly formulated body butter that is your best seller has unfortunately given your customer a bad skin reaction. They're holding you liable. While this is a handmade product, this business would require a Soap or Cosmetics Makers Insurance policy.
- You've sold your beautiful macrame plant holder and your customer hangs it in their lounge room over their lush white carpet. However, one morning the macrame breaks causing the plant and all the soil to stain the carpet causing Property Damage.
- The colour of the divine personalised leather phone cases you make have rubbed off on a customers brand new dress staining the material.
What else to look for in your Handmade Insurance policy
As a Handmade business, the way you operate is unique to your industry.
You may spend half of your week creating beautiful products, while Friday's are reserved for working on your online store and selling on social media. Meanwhile, your customers will find you at the local weekend markets operating from a market stall. In between all this, your business is exposed to many risks.
When choosing your Handmade Insurance, check that it includes Public & Products liability insurance that allows you to sell online and at the markets.
3 benefits of taking out handmade business insurance
While some insurance benefits can be obvious, there are others that may not immediately come to mind.
1. Insuring your business opens doors for more work and stockist opportunities.
Yep, whether you're selling your products at a market or stocking in your local home decor shop, they will want proof that you hold the right insurance cover.
2. It protects not only your business but your livelihood
Whatever niche or industry you operate in, every business comes with its unique risks, there is always something. Many small business owners that believe their business is relatively low risk are often under the assumption that because of this, if a claim was made against them, they could afford to pay it.
However, trust me when I say that unfortunately, even a small claim could not only put you out of business but jeopardise your livelihood.
3. It backs your brand as a professional and reputable business
If you want your business to be seen as what it is and not just a hobby, holding the appropriate insurance cover will back your brand as being professional and reputable. It instills confidence in not just your customers, but in every stakeholder wanting to do business with you.
AUZi Insurance have recently launched their Handmade Insurance policy that has been tailored to the unique nature of Aussie handmade businesses. The cover is a combination of Public and Products Liability Insurance. You can get a free instant quote or browse the supported activities for this policy by going to https://auzi.co/handmade.
AUZi Insurance Creative Director