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According to the Craft Council’s latest Market for Craft report, the value of UK craft sales grew from £883 million in 2006 to more than £3 billion in 2019, with the number of craft buyers rising from just 17% of the population to 73% over the same period.
That’s great news for tens of thousands of skilled crafters, artisans and creators, but with so much at stake, no matter how small your operation, it pays to be insured.
Even lovingly crafted products have the potential to hurt a customer or damage their property. And then on top of that, you’ve got to consider the vulnerability of your stock, equipment, and business premises to fire, floods and theft.
That’s why, whether you’re a ceramicist, a cross-stitcher or a carpenter, you should consider taking out a craft insurance policy that will cover you for claims made in the event of damage caused by, or to, your products.
What are arts and crafts businesses?
Whether you are selling handmade soaps on Etsy or visiting fairs and markets up and down the country with your pottery collection, there are a range of businesses that now fall under the arts and crafts banner.
It could be your main form of income, or a passion turned into a side hustle. Regardless, it is worth considering craft insurance to make sure you and your business are protected.
» MORE: How to Open an Etsy Shop in 8 Steps
What is craft insurance?
A craft insurance policy isn’t a specific type of insurance, but rather a package that includes several policies.
This basket of policies could ensure you are covered and compensated for unforeseen events that may affect your crafting and business activities.
Public liability insurance for craft fairs
Perhaps you sell your crafts at markets and events, or maybe you run classes where you teach people how to make something.
Either way, you’re dealing with members of the public, which means you need to consider public liability insurance.
This type of cover kicks in if a member of the public is injured, or dies, or has their property damaged as a result of your business activities.
Say you own a physical store where a person falls and injures themselves, for example. If this is the case, you could be taken to court, and public liability insurance could help cover the cost of legal fees and any compensation claim made against you.
Product liability for crafters
Whether you are a manufacturer, supplier, or both, you may also be held liable for injuries or damage to property caused by your products, which is where product liability insurance comes in.
If your business sits anywhere in the supply chain or life cycle of a product – and if that product turns out to be faulty and injures someone – then you could be taken to court.
This includes goods which you give away for free – samples of a beauty product, for example.
Product liability insurance could protect you in such an eventuality by covering your legal fees and compensation costs.
Stock cover for crafters
For any business, loss, theft or damage to stock or products can be devastating – even more so when you’ve personally put blood, sweat, and tears into handcrafting those products.
Likewise, the loss of the tools, equipment, and raw materials you rely on for your trade could spell disaster if you’re not adequately covered. Contents and stock cover may ensure you’re compensated if the worst happens.
» MORE: A guide to business liability insurance
Why do I need craft insurance?
Whether you do or don’t need insurance for your craft business largely depends on your situation.
If you employ anyone, you are required by law to have up to £5 million of employer’s liability insurance cover. The only exception is if your employee is a family member or based abroad.
If you do not have staff, whether you need craft insurance will depend on your business circumstances. If you’re worried your craft business might crumble under the weight of a successful claim against it, or the financial cost of lost or stolen stock or equipment, a comprehensive craft insurance policy could be a good idea.
Although there is no legal requirement to have insurance if you’re selling online, you should still strongly consider taking out a policy to protect your business.
What if a customer claimed compensation because they were injured by a product you sold them? Or what if your valuable stock was stolen or damaged?
Additionally, if you sell your products at craft fairs, many organisers will demand proof that you have product liability insurance and public liability insurance before they allow you to set up a stall and sell on their premises. In this case, while craft insurance may not be a legal requirement, it’s hard to see how you’d be able to do business without it.
What does craft insurance cover?
Craft insurance packages can cover you for claims made against your business due to accidents or injuries caused by your crafts, and for loss or theft of, or damage to, your stock and business contents.
The exact level of cover will depend on which insurance products you have chosen to include or not include. You can often customise a craft insurance package to match your specific needs.
What is usually included in craft insurance?
Craft insurance may include the following:
Of course, this list is not exhaustive, so it will be worth choosing more or less plans based on your own business needs.
What isn’t usually included in craft insurance?
You may have the option to add different types of cover to your policy, though they won’t usually be included as standard.
Goods in transit insurance is useful for when your craft products are out for delivery or being transported from and to craft fairs.
And especially if most of your business is online, cyber cover can provide compensation if a hack, data breach or systems failure threatens your business operation.
If you don’t have product liability cover, then you may want to consider legal expenses insurance to cover you for any legal proceedings relating to a defective product.
And finally, consider the benefits of business interruption insurance, which can compensate you if a disaster temporarily stalls operations.
How much does craft insurance cost?
The cost of your craft insurance policy will be dictated by several factors, including:
- how long you’ve been in operation
- how many employees you have
- the scale of your operation
- whether or not you export your crafts and where to
- how valuable your crafts are
- how risky your crafts are to customers
» MORE: Business Insurance
How to choose the best craft insurance policy for you
When taking out a craft insurance policy, you’ll need to ensure the level of cover will protect your business against any unforeseen events you may face.
This means conducting an assessment of the risk posed to the public by your products as well as the risks to your business and any employees.
Craft insurance FAQs
When it comes to small business insurance, the only legal requirement is employer’s liability insurance, and that’s only if you employ any non-family members based in the UK.
Crafters may want to consider both public liability insurance and product liability insurance. The first could help protect you from claims by members of the public for injury or death and damage to property caused by your business activities, while the latter can protect you from legal costs and claims for compensation if your goods cause injury, illness or property damage.
You may also want to consider contents cover to compensate you for loss, damage or theft of your business stock, equipment, fixtures and fitting.
Public liability insurance and product liability insurance are separate forms of insurance but these can often be bundled together into one package.
Most craft fairs or markets will require proof of craft stall insurance in the form of public liability insurance and product liability cover up to a certain level before you can sell products.
» MORE: Do I need business insurance?
No, on most online craft or ecommerce marketplaces it isn’t mandatory to have insurance in order to sell your products. However, it may be worth considering product liability insurance to provide your business with cover in the event that one of your products causes injury, illness or damage to property.
No, like many online craft marketplaces, Etsy doesn’t require sellers to have insurance.
No, you don’t need insurance to make and sell soap. However, due to the use of allergens and corrosive chemicals, you should definitely consider taking out public liability cover and product liability insurance. These are separate types of policy, but can often be taken out together to provide adequate cover.
You don’t need insurance to sell homemade candles. However, customers can still be injured or their property can be damaged by your candles, so public liability insurance and product liability insurance may make sense if you would otherwise not be able to afford the financial costs associated with a claim.
» MORE: How To Start A Candle Business
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