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Sure, shoppers can go to other merchants for factory-made goods, but your customers come to you for crafts made with love and care. For them, that extra craftsmanship is worth the investment.
But as you attract customers, you’ll need to protect your business interests, too. That’s where handmade product insurance comes in. Thimble’s Crafters Insurance financially protects people who make and sell handmade products, and encompasses two kinds of liability coverage:
- General liability insurance
- Product liability insurance (part of general liability coverage)
Not sure why you need this type of coverage as you build your handmade products business? We’ll tell you everything you need to know in this handy guide.
What does handmade product insurance cover?
One thing you need to do when starting a craft business is obtaining business insurance, even if your business doesn’t have employees. As a crafter or maker, you could bear the brunt of financial consequences arising from claims of injury or damage that your handmade product caused after a customer takes it home.
Thimble’s Crafters Insurance arranges the investigation and legal defense of such claims, even when they are groundless or false, and can cover the settlement costs. Think of it this way: When you sew a handmade item, you use a thimble to protect yourself. Similarly, Thimble’s business insurance for handcrafted goods protects your pocketbook with the following areas of coverage:
- General liability insurance: This coverage protects policyholders from the monetary aftermath of claims due to third-party property damage, bodily injury, or personal and advertising injury.
- Product liability insurance: This is a coverage area under general liability insurance. Product liability coverage safeguards business owners from having to pay for claims stemming from the sale of handmade goods. These claims can arise from injuries, illness, or property damage. Providers can exclude product liability coverage from general liability coverage, but Thimble’s handmade product insurance includes it.
As you start your crafting business, keep in mind that insurance for handmade products only covers you for items that injure or cause damage to others once they leave your possession. It likely won’t cover damage to products after you sell them, the cost of recall of your products, or injury to your workers from products.
For that, you’ll need additional insurance such as worker’s compensation coverage, which protects you if one of your staffers or contractors is injured or gets sick at work, or products recall coverage, which will pay for the costs incurred if you have to recall your products.
Do you need business insurance to sell handmade crafts?
Arts and craft businesses need insurance to sell goods while being protected from the cost of legal woes. Thimble can help you find monthly and annual product liability coverage for the following kinds of craft businesses:
While you’re building up your crafting business, you don’t want to be hit with a lawsuit because of one of your handmade goods. If, for example, you make special soap and you incorrectly mix up your formula, a customer could sue you if your soap causes skin problems after use. That’s why you need product liability insurance, which includes financial protection against risk exposures due to:
- Production flaw: If your product injures a third party due to a hazardous defect created at least at some point during the manufacturing process, they could sue you.
- Design defect: if one of your products contains a dangerous deficiency and harms a third party, they could sue you. This could be especially concerning for your business because it means all of your products in the same batch could harm consumers.
- Defective instructions or warnings: if you fail to include the correct instructions explaining how to use the product safely or you don’t clearly warn consumers about potential dangers for using the product, a third party could sue you if they are injured.
Insurance is a handy tool for a handmade craft business
As you’re creating handmade products for your loyal customers, you need to make sure you’re protected from any risks that could disrupt your business.
Handmade product insurance, or product liability coverage, is especially important for safeguarding your business against third-party injury claims stemming from product defects, incorrect or inadequate warnings, and manufacturing defects.
Need insurance now? Click “Get a Quote” or download the Thimble app. We’ll ask you some questions and give you a quote. Once you buy your policy, we’ll send you your policy and proof of insurance straight to your inbox. Once you have all the insurance you need, you can focus on creating the handmade crafts you and your customers love.
Written on August 23, 2021 | Modified on: August 25, 2021
Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.