Hobby Shop insurance – cost and types of policies

Whenever you budget the expenses of your business, Hobby Shop insurance must be included in the list because you can’t always know exactly what can happen in the future.

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

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

If your Hobby Shop business runs without proper insurance, you are taking an enormous chance not just of losing some money but of a total wipe-out.

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

Hobby Shop Insurance

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

The question is, can you afford to NOT have insurance for your Hobby Shop business?

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

Your Hobby Shop business is not protected by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like Texas, there are specific monetary levels that limit the amount a judge 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 claimant more than they have sued for.

When you are running your Hobby Shop operations, you can’t avoid responsibility for the outcomes of your actions.

Even more importantly, unless you have spent beforehand the money necessary to have your business running as an LLC, all of that liability belongs to you alone.

What does Hobby Shop insurance protect you from?

For your Hobby Shop business, the most important types of insurance are designed to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some legal kinds of insurance that various states require.

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

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

Liability insurance

General liability insurance

Any Hobby Shop business is dealing directly with customers, and that means you always have the danger that some accident can happen to them bodily or else something of theirs can be damaged.

In such a case, they can require compensation.

General liability insurance policy for your Hobby Shop business insures you against claims coming from injury to customers or damage to their property.

It protects your Hobby Shop business from the claims themselves and in addition to any resulting 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 insist on proper liability insurance.

The average level of general liability insurance for your Hobby Shop business would be with a cap of $1 million for a single event 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 Hobby Shop insurance operations.

Professional liability insurance for your Hobby Shop business

In the event where a buyer alleges some negligence, errors, or omissions in how you conducted your Hobby Shop business for them, you can quickly be involved in a law suit.

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

Almost all small Hobby Shop business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

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

Product liability insurance

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

You need to be aware of the particular laws of product liability in your own state.

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

To cover yourself against any possible lawsuit, you need Product liability insurance for Hobby Shop

Only you can determine exactly how much insurance you need.

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

Commercial insurance

Commercial vehicle insurance for your Hobby Shop business

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

The right 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 insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is insured if your truck 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 calculated on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your Hobby Shop business needs unique and costly equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The gear 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 destroy your whole business in one stroke.

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

It is hard to advise how much equipment insurance you need – it’s really dependent on how much you have invested in your Hobby Shop business’ equipment.

Commercial Property insurance

Any Hobby Shop business that owns or rents space in a building should have a commercial property insurance policy.

If you own the building, you may already have a substantial capital investment, along with a big liability if there’s a mortgage.

Any physical building location must carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against deliberate damages like theft and vandalism.

If your Hobby Shop business deals in areas of high risk, like Florida or Georgia, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where intense cold snaps can cause damage to outer coverings of Hobby Shop business premises, there is a need for more additional cover than in warmer climes.

Whereas the level of cover depends mainly 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 Hobby Shop insurance section below to give some idea of the average prices per million dollars of property insurance for your Hobby Shop business.

Temporary insurance by month, week or day for your Hobby Shop business

Is your Hobby Shop business working part-time or casually, or is the level of business seasonal?

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

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

The essential feature of short-term insurance is that you purchase the cover for a defined period – a designated 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 larger business activity, get the existing cover improved.

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

Business Owners Policy BOP for your Hobby Shop business

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

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

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

It is frequently the right choice for small and medium-sized Hobby Shop businesses, such as yours.

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

BOPs do not cover your professional liability or commercial vehicle policies.

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

The normal business that is allowed to take a BOP policy must have fewer than one hundred employees, and not more than five million dollars in annual turnover.

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

Workers Compensation insurance for your Hobby Shop business employees

In many states, it is mandatory to have workers compensation insurance when your Hobby Shop business has one or more employees.

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

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

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

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

In these states, you cannot take out your workers compensation obligations from private insurance corporations.

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

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

Average costs of these types of insurance

Although every Hobby Shop insurance level is unique, there are enough examples of standard quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

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

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

Types of insurance Price range
Equipment insurance $358 – $1441
Commercial vehicle insurance $1572 – $2627
Product liability insurance $286 – $574
Public liability insurance $360 – $732
General liability insurance $559 – $1084
Commercial insurance $1018 – $2798

Cost of insurance for your Hobby Shop operations depends on many different factors.

We have reckoned these figures for small freelance Hobby Shop businesses.

In larger states like California, premiums are generally about 20%-30% higher than national averages, whereas in smaller states like New Mexico, they can be about 20%-30% less.

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

You should talk to professional insurance agents and brokers, or insurance company representatives.

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

Another good source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for Hobby Shop operations?

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

Does my Hobby Shop business have to have insurance?

Some of the types of insurance are not mandatory for you to run 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 Hobby Shop business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a client 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 Hobby Shop insurance.

How much will Hobby Shop business insurance cost?

In addition to the size of the business, some 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.

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