In a recent post on Cut to the Trace, we discussed a concerning trend where makers believe they have product liability insurance through their homeowner’s insurance, but likely do not. This leaves makers open to potentially crippling financial loss and we strongly encourage you to read our take on the situation here.
In this article, we’re going to talk about another misunderstood, but necessary coverage; property damage coverage.
What is Property Damage Coverage?
Property damage coverage, often referred to as Inland Marine Insurance, is coverage that protects you against loss of items essential to your business. This means items like tools and equipment, supplies and things that you would use to make your products or display them.
Property damage coverage does not cover things like buildings or structures; you would need a separate policy for that.
We constantly hear makers saying things like “oh I don’t need property coverage, because my homeowner’s insurance already covers my home”. The name of the coverage makes it tricky, but we’d like to be as clear as possible: property damage coverage is likely not included in your homeowner’s insurance. In fact, most of the major insurance companies we reached out to don’t offer it to makers at all.
Property Damage Coverage & Homeowner’s Insurance
We reached out to several well-known insurance provers, national companies like State Farm, Nationwide, CoverWallet and Next.
With each of these companies, we were told essentially the same thing: no coverage is available for those who make their own products. In one case, one of the insurance companies said that coverage would be unavailable simply due to the fact that the potential insured was making products by hand, which equated to a “greater liability”.
These are big companies that many people use for their insurance needs, and while these companies provide great coverage for other situations, it’s very unlikely that they will cover you in a maker capacity.
Who Offers Property Damage Coverage?
Veracity Insurance Solutions offers property damage coverage to current Members of the HSCG. You can purchase the standard coverage, which includes $5,000 in property damage coverage, or add more coverage for an additional cost. Currently, Veracity offers coverage through the HSCG at $5,000, $10,000, $20,000 or $30,000 limits, but you can always contact Veracity directly if you need more.
RLI is another insurance company for makers that offers property damage coverage up to $5,000. RLI is a low-cost choice for those who don’t have a lot of sales, as the policy has an income cap of $5,000 and does not currently cover candles.
Indie Beauty Network offers property damage coverage to their members for an additional fee. Prices start at $110 per year depending on the amount of coverage – they offer up to $30,000. Like the HSCG, IBN’s policies are brokered by Veracity Insurance Solutions and underwritten by Great American.
Do You Really Need Coverage?
We also hear a lot of “I don’t need property damage coverage, I don’t really have a lot of equipment”. It may not seem like you have a lot, but consider this.
With the policies offered by Veracity Insurance Solutions through the HSCG, you have the option to purchase a policy with or without property damage coverage. The difference in price between the two base policies is about $105, and that $105 gets you $5,000 in property damage coverage (it’s incrementally more if you need more property damage coverage).
Look around at your soap, cosmetic and/or candle making equipment. Can you replace it for $105 if something happens to it? Obviously we want to believe that nothing will happen to the things we’ve worked so hard to purchase, but that doesn’t mean you shouldn’t prepare for it.
When you think about it in terms of protecting your equipment against the unexpected, purchasing protection is a wise investment.
The Bottom Line on Property Damage Coverage
The long and short is, if you don’t already have property damage coverage, you should. The last thing you should have to worry about is how you’ll replace your hard-earned equipment in a pinch. Protect yourself with property damage coverage so you can focus on what’s important: building your brand!