Things to Consider & Mistakes to Avoid

Step 3: Things to Consider

While coverage and coverage limits are crucial factors when choosing an insurance policy, our checklist includes other important factors to consider, as well as common mistakes to avoid.

Price: Always look for the least expensive policy that still includes all the coverage you need (see grid above). It’s not a bargain when something goes wrong, and you discover that you’re not fully covered!

Property coverage: If you have business property, make sure your policy includes enough property/inland marine coverage. This is one way insurance companies keep prices down. Without it, you have no protection if your inventory, supplies or equipment are damaged or stolen. The HSCG General and Product Liability Policy includes Property Coverage of $5,000 (this can be increased for an additional fee).

All 50 states: Are you covered across the country? A craft show across state lines or an opportunity to sell at an event might come up. You don’t want to find out too late that your policy only covers certain states.

Revenue cap: Some insurance companies won’t insure your business over a certain amount of revenue. Find a policy that will grow with your business.

Cost to add additional insured: You may need to include another party to your policy, like an event or a landlord. Will you get charged to add additional insureds? The best option is a policy that allows additional insureds, free of charge.

Carrier grade: Reputation is important when it comes to insurance. Carriers with an “A” grade typically provide the best experience.

Review the details: Always take the time to review your policy details, and don’t be afraid to ask for clarification. Just as you would take the time to explain your product and process, your insurance carrier should do the same for your policy.

Homeowner’s policy: Your homeowner’s insurance likely does not provide product liability coverage for your business, even if you make your products at home. It may cover general liability, depending on your policy’s home-based business coverage. Also, some homeowner’s insurance policies do not allow home-based business; it’s important to read your policy or talk to your agent to determine whether you can run a business from home without losing coverage.

Farmer’s markets: Some markets offer coverage to market vendors; check the policy carefully. These policies are typically limited to general liablity, and only at the market.

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