Makerspaces insurance – cost and types of policies

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

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With the protection provided by liability insurance and all the other kinds 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 Makerspaces enterprise, you must consider how much financial liability you are taking on.

If your Makerspaces 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 consequences of their actions. 

Makerspaces Insurance

In this article, we are giving very general guidelines for growing businesses to explain 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 Makerspaces business?

What this means, for any Makerspaces business owner, is that if some person 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 Makerspaces 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 Montana, there are specific monetary levels that limit the amount a court can award in any case against the state.

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

When you are running your Makerspaces operations, you can’t deny responsibility for the outcomes of your actions.

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

What does Makerspaces insurance protect you from?

For your Makerspaces 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 Makerspaces business owner should remember when negotiating the insurance needed.

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

Liability insurance

General liability insurance

Any Makerspaces business is dealing directly with other people, and that means you generally have the danger that some accident can happen to them personally or else something of theirs can be spoiled.

In such a case, they can sue you for compensation.

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

It protects your Makerspaces business from the claims themselves and also to any resulting court costs and legal fees of the lawsuits.

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

The usual level of general liability insurance for your Makerspaces business would be with a upper limit 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 Makerspaces insurance operations.

Professional liability insurance for your Makerspaces business

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

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

Most small Makerspaces 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 Makerspaces insurance section below for average prices of professional liability insurance for your Makerspaces 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 recommendation 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 damages caused by products claimed to be defective.

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

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

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

Commercial insurance

Commercial vehicle insurance for your Makerspaces business

Be careful! – practically all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the car 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 proper 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 van is involved in a collision.

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

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

Tools and Equipment insurance

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

The tools 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 wipe-out your whole business in one stroke.

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

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

Commercial Property insurance

Any Makerspaces business that owns or rents space in a building needs a commercial property insurance policy.

If you own the property, you may already have a substantial capital investment, as well as a big liability if there’s a mortgage.

Your physical building location should carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against man-made damages like theft and vandalism.

If your Makerspaces business deals in areas of high risk, like Texas or North Carolina, 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 Makerspaces business premises, there is a need for more extra cover than in warmer climes.

Although 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 Makerspaces insurance section below to give some indication of the average prices per million dollars of property insurance for your Makerspaces business.

Temporary insurance by month, week or day for your Makerspaces business

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

Using short-term insurance makes good sense. Business insurance by the month, day, or week – temporary insurance for Makerspaces – 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 identical risk cover.

The essential feature of short-term insurance is that you pay for 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 higher 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 Makerspaces 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 integrates commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

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

It is often the right choice for small and medium-sized Makerspaces 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 cover.

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

The typical business that is eligible for a BOP policy must have fewer than one hundred employees, and maximum five million dollars in annual revenue.

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

Workers Compensation insurance for your Makerspaces business employees

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

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

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

Failure to meet a state’s laws 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 allow coverage from the government-run monopoly state funds.

In these states, you may not get your workers compensation obligations from private insurance providers.

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

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every Makerspaces insurance requirement is unique, there are enough examples of standard quotes from insurance companies for us to give rough 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 gathered for the main types of insurance your Makerspaces businesses needs.

Types of insurance Price range
General liability insurance $638 – $976
Commercial vehicle insurance $1953 – $2667
Commercial insurance $1175 – $2296
Public liability insurance $344 – $693
Product liability insurance $244 – $898
Equipment insurance $304 – $1072

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

We have reckoned these figures for small independent Makerspaces businesses.

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

The location and size and type of your Makerspaces 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 searching for insurance companies near where your business is located.

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

FAQ

What is small business insurance for Makerspaces operations?

This is an umbrella term used to describe common insurance policies designed to protect Makerspaces business owners from risks like bodily injury, property damage, claims of negligence.

Does my Makerspaces business have to have insurance?

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

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

What does a small Makerspaces business insurance policy cover?

Liability insurance provides insurance 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 Makerspaces insurance.

How much will Makerspaces 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 consult with professional insurance agents and brokers, or insurance company representatives.

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