Craft Stores Insurance – Cost and Types Of Policies

Whenever you budget the expenses of your business, craft stores insurance must be near the top of the list because you can’t always know exactly what is going to happen in the future.

With the protection provided by general insurance and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unwanted happens.

Like any business owner, for your craft stores enterprise, you must consider how much financial liability you are taking on.

If your craft stores business runs without proper insurance, you are taking a giant chance not just of losing some money but of a complete wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the consequences of their actions. 

In this article, we are giving very general guidelines for startup businesses to outline what the main kinds of insurance that you need are, and where possible, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your craft stores business?

What this means, for any craft stores business owner, is that if some company claims that your actions caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your craft stores business is not sheltered by laws in the same way as states are, where laws can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount an adjudicator can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a plaintiff more than they have sort.

When you are running your craft stores operations, you can’t deny responsibility for the consequences of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as a limited liability company, all of that liability belongs to you alone.

What does craft stores insurance protect you from?

For your craft stores business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

Also there are some official kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any craft stores business owner should know when negotiating the insurance needed.

The main headings of insurance for your craft stores businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any craft stores business is dealing directly with other people, and that means you usually have the danger that some accident can happen to them themselves or else something of theirs can be damaged.

In such a case, they can demand compensation.

General liability insurance policy for your craft stores business protects you against claims coming from injury to customers or damage to their property.

It protects your craft stores business from the claims themselves and also to any follow-on court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts demand proper liability insurance.

The usual level of general liability insurance for your craft stores business would be with a upper limit of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your craft stores insurance operations.

Professional liability insurance for your craft stores business

In the event where a customer alleges some negligence, errors, or omissions in how you conducted your craft stores business for them, you can quickly be involved in a court case.

Even if the lawsuit against you is decided in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Most small craft stores business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of craft stores insurance section below for average prices of professional liability insurance for your craft stores operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that clients may claim that the results didn’t meet your description of function, or that your guidance was basically incorrect.

You need to understand the specific laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held liable for injuries caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for craft stores

Only you can estimate exactly how much insurance you must have.

Best advice is to consult with experienced insurance agents, brokers or company representatives for support.

Commercial insurance

Commercial vehicle insurance for your craft stores business

Take care! – practically all policies for private vehicle insurance do not cover any event like theft or accidental damage when the vehicle is being used for business purposes.

The best way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a designated commercial vehicle insurance package.

Commercial van policies cover the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is guaranteed if your van is involved in a crash.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The required value of the insurance is worked-out for the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your craft stores business needs specialized and dedicated equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

As well, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy whatever needed to keep your craft stores business running.

It is impossible to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your craft stores business’ equipment.

Commercial Property insurance

Any craft stores business that owns or rents space in a building must have a commercial property insurance policy.

If you own the property, you probably have a substantial capital investment, in addition to a big liability if there’s a mortgage.

Every physical building location needs to carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your craft stores business operates in areas of high risk, like California or North Carolina, extra coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where extreme cold snaps can cause damage to outer coverings of craft stores business premises, there is a need for more extra cover than in warmer climes.

Because the level of cover depends entirely on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of craft stores insurance section below to give some indication of the average prices per million dollars of property insurance for your craft stores business.

Temporary insurance by month, week or day for your craft stores business

Is your craft stores business working part-time or casually, or is the level of business fluctuating?

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for craft stores – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having less premiums but still having the same risk cover.

The key feature of short-term insurance is that you buy the cover for a defined period – a specific date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover increased.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your craft stores business

You have the option to combine most of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will cover you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized craft stores businesses, such as yours.

There are two limits that will determine whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle risks.

Also, the size of your business will determine whether you are allowed to take out BOP cover.

The usual business that is allowed to take a BOP policy must have no more than one hundred employees, and not more than five million dollars in annual revenue.

As well, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your craft stores business employees

In most states, it is mandatory to have workers compensation insurance when your craft stores business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits provide for medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only permit coverage from the government-run monopoly state funds.

In these states, you can’t take out your workers compensation obligations from private insurance providers.

Workers compensation rates are calculated based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every craft stores insurance level is unique, there are enough examples of usual quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your craft stores businesses needs.

Cost of insurance for your craft stores operations depends on many different factors.

We have estimated these figures for small self-employed craft stores businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, while in smaller states like Utah, they usually are about 20%-30% less.

The location and size and type of your craft stores business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for craft stores operations?

This is a wide term used to describe basic insurance policies designed to protect craft stores business owners from risks like bodily injury, property damage, claims of negligence.

Does my craft stores business have to have insurance?

Some of the kinds of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small craft stores business insurance policy cover?

Liability insurance provides insurance against lawsuits or claims filed by a third-party for bodily injury, property damage, or negligence.

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for craft stores insurance.

How much will craft stores business insurance cost?

In addition to the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for craft stores, in the search box below, and follow the relevant links.

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