Which Artists Need Specialized Insurance?

by Donald Clark

Courtesy of Handmade Business

What is event liability insurance, and as an exhibiting artist why do I need it? Will a general liability policy cover me while exhibiting at art and craft shows? There are so many choices and options out there, and I just don't know how to determine what is right for me. - Mark Simms

We all know how confusing insurance issues can be--I certainly do. That's why the same insurance agent has been handling my professional and personal insurance for decades. I urge you to find a local insurance representative and bring your business procedures to him or her and work with them to determine the best coverage for your business. You'll also want to provide information about any non-business insurance you may have. However, as with any situation where we're seeking advice, it's important to know the questions we need to ask.

Here are some of the things I do know. Homeowner's policies are just that, they're about the home and are written to protect the homeowner and their property. You need to be aware of the risks of operating an uninsured business in your home. I'm aware of damage to homes that was caused by a business accident and the loss wasn't covered. It's best to not assume your homeowner's policy will be of any help to you with any losses caused by your business.

In our litigious society liability insurance is a must. You'll want to let your agent know if you stage any events that bring people onto your property and into your studio. If you make a product that could in any way harm someone you'll want coverage to protect you and to provide for the care of the injured customer.

Offsite coverage can usually be added to most business policies. This should include coverage for your product in transit and on display, your booth, display materials, and liability. A number of larger shows request a certificate of insurance and may also require the producer of the show be added to your policy as a co-insured.

Another good resource I know of is the CERF+ website, where you can find information relating to insurance. After decades of providing emergency assistance to craftspeople, this organization has begun to focus on preparedness as a way of avoiding or preparing for emergencies. Take a look at www.craftemergency.org/get_ready_now/#insurance where you'll find a wealth of information.

The CERF+ staff has compiled a directory of insurance companies and the plans they offer that are specifically designed for craftspeople and artists. The listings include the basic offerings of each plan as well as any restrictions to enrollment. Many of the plans are available to makers regardless of media; others require membership in a media-driven organization. When I finished scrolling through the list it was clear to me there was something there for everyone. CERF+ isn't offering the insurance, just the information, and the connection which appears with each plan presented.

In addition, they have created the Studio Protector, a tool to guide preparedness for any emergency. It is filled with insurance information; consider adding it to your studio library.

Two urgent to-dos, read the next answer to this month's questions, and draft your spreadsheets before you contact an insurance agent. Make sure these spreadsheets, and any other business information, are backed up and also stored in a safe offsite place.

My insurance agent told me to inventory everything related to my craft business. Do I really need to?

I've been advised from my business insurer to create an inventory list of my studio including tools, equipment, assets, and finished works. What is the best way to organize this list, and what information should I include? Also, are photos important? - Jeannette Treverton

You've been given sound advice; let's set up a plan to make sure you follow it. Your first attempt at this will be time consuming; you have to set up the system, dig through your tool chest, inventory larger equipment and your supply cabinet. It's also essential that you inventory the finished pieces still in your possession. Insurance issues will be just one of the ways you'll use the information you collect and enter.

I'd suggest you find a program you like, and build a spreadsheet to hold your files. Think about Excel. You can customize and build it to accommodate the facts you need. Excel is fairly straightforward, and files are relatively easy to build and use.

If you're not comfortable or interested in doing the build part, no doubt there is someone in your area who can do this for you. Just make sure you have a role in the process and that you know how to maintain the spreadsheet once it's constructed.

In the section for equipment you'll want to create a column for the cost and date of purchase for each piece. You might want to include an image of any major equipment in your studio. A good reason to choose Excel is that the program allows the addition of images.

You also will want to include entries for the materials you use. Create columns that allow entry of quantities on hand, the cost per unit, and the date of the last purchase.

The entries for finished work should include columns for size, materials, date, title, and where it's stored. It is essential to add images to the entries for each of your finished pieces.

Once you have this spreadsheet going, it will be helpful to you in many ways. The information you gather will be useful for tax purposes in addition to insuring your property. For instance, you can use the section that deals with materials to manage what you have in stock and help you decide when it's time to order new materials. Equipment can usually be depreciated on taxes, and that's why you need to know purchase costs and the date each item was purchased.

The information that documents the inventory of finished work will be helpful in a number of ways too. It's helpful to look back at what we've done when we're planning new work. Your spreadsheet will let you do this without pulling out each piece. A shop, gallery, or collector may ask to see available work. You can pull images and descriptive information from this spreadsheet and e-mail it to them easily and quickly. A speedy response to these requests is often a deciding factor for getting into an exhibit or making a sale.

Creative people need to be in the studio and sometimes are reluctant to go to the office and face the paperwork. You'll have to get over this, and commit some time to maintain this spreadsheet; if you built it yourself this will be relatively easy.

We have all heard that time is money--in this case time in the office will save or even make you money. As a reminder, be sure this important information and other business-related data is backed up and stored in a safe offsite place.