Insurance for a trunk show at my house?

Hello Harriete,
A friend has hosted a sale in her apartment for myself and another friend so that the three of us could invite family and acquaintances to share new work and possibly sell some as well.  Our last sale was put together before the holiday season and was surprisingly well attended.  We judged it a success.  We decided to plan for a Valentine's Day sale when we ran into a potential problem.

"Par Lobbe" (brooches) © 2009
composite and epoxy resin, fabricated
copper, paint, dyed cotton cord,
Artist: Jullian Moore
8" x 4" x 2.75" (largest brooch)

Her insurance company wants her to buy an expanded policy, but she believes they are eager to get more money from her. Her rental insurance has all the basic liability coverage--if a stranger or guest were injured in her home or slipped on ice outside, that would be covered.  Also, the landlord has a policy on the home.

We thought of this in the same vein as floating markets, private restaurant clubs, and home galleries that are a current trend because of the poor economy.  Are all of these establishments buying separate policies for private, low-key events?  I had really thought we'd stumbled into something great, and I'd hate for this to be ruined by bureaucratic b.s. but I suppose I shouldn't be surprised if that's the case.

Thank you for all of the hard work you do for all of us!
Jillian Moore

This is a financially loaded question so I went directly to the expert on insurance, Craig Nutt, the Director of Programs at CERF (Craft Emergency Relief Fund).  He was also a past speaker for SNAG's  Professional Development Seminar with his Insurance Show. (I was the applause lady for his program as you can see in the photo below.) I knew Craig would have the answer to Jullian's questions.

Here is Craig's reply:                "CERF is about to release a report on the business survey we conducted with 6 national craft organizations including SNAG.  One of the things that came through like a freight train was the fact that a great many artists mistakenly believe that their homeowner's insurance provides some coverage for their business activity.  We estimate that about 57% of all respondents to the survey are in this category.

A very small number of those surveyed had actually obtained coverage for their home-based businesses through a special endorsement ("rider") on their homeowner's insurance policy. (Many homeowner policies have an allowance for a home office of about $2500, intended to cover a computer, desk, file cabinets … stuff associated with a home office.) 

Some artists think that they can fly under the radar and avoid insurance issues.  But insurance companies do not care if you have a business license, pay your sales tax, or comply with any of the laws businesses are supposed to obey.  They have a simple test: do you receive money for goods or services, or are you offering goods or services for sale.  If so, you are not covered.  That means no insurance on your tools, supplies, inventory, and in fact, on the building in which your business is conducted.  Also, very important to the person holding the trunk show or hosting a studio tour, no liability insurance!  This means if someone slips on the steps coming to your trunk show, the liability insurance that would cover a casual visitor under normal circumstances is no good.  That is because you are offering goods for sale.

To get a quote on business insurance, artists need to go to companies that specialize in that type of insurance.  Forget about the Allstates, Geikos, etc.  Sure, some agents may not find time for you, because the commissions are not big, but most agents I have met take their calling seriously and are willing to talk to people, regardless of how much money they stand to make.  Ask other artists who have well-run businesses who their agents are.

CERF has information on business insurance at this location on the CERF website. This includes names of companies and organizations that have business insurance plans for artists. Fractured Atlas, an artist service organization, offers a number of targeted plans and is working on a plan for craft artists.

CERF also offers a guidebook on business insurance for artists by clicking here.

 

 

 

Also, CERF will soon be consolidating its preparedness and recovery information at:  http://studioprotector.org.   To the left,  you can see the Studio Protector wall guide which every artist should have on the studio wall (and begin putting it into practice). The site has more in-depth information on topics covered in the wall guide.  They are both useful alone but are meant to function together.

Thanks for your support of CERF, and for all you do to promote good business practices to artists!  All my best,

Craig Nutt, Director of Programs
Craft Emergency Relief Fund

Craig's key point is that none of the typical homeowner or renter's insurance policies cover any liabilities during entrepreneurial events such as trunk shows or home sales. Of course, you can choose to not have insurance and take the risk yourself.  That's up to you, but it would be better to investigate the alternatives for business insurance that are available.   

An alternative might be to have a purely social gathering and display your work with no sales.  Then if anyone wants to purchase an item, tell them that any sale would have to be arranged at a later time and different location.    

I hope this answers your question about insurance. Check out the CERF website for more information. 

Harriete

This post was updated on January 8, 2022, to provide current links.