Farmers’ markets and holiday craft shows across Canada allow local vendors to sell all their goods in one place. However, lots of behind-the-scenes work goes on to make these events possible. This is especially true for vendors who have to organize booth details with the host, set up merchandise displays and, most importantly, promote the event.
Factors that determine the type of insurance coverage vendors require
Insurance coverage is essential to protect the vendors selling at these events. It helps protect small businesses from financial losses if their products get damaged or stolen. However, because of the scale of these events, vendors often need to purchase their own insurance coverage. As a business owner, you might wonder what type of insurance you need. It’s time to explore what vendors need to know about insurance.
Although vendor insurance can be used as an umbrella term for the insurance policies businesses use at craft shows, a broker or insurance company will have questions. The purpose is to determine which insurance policy is suitable for your small business. Here are aspects that insurance providers take into account when a craft show vendor decides to purchase insurance:
Type of product being sold
What are you selling? The type of product a business sells will determine the amount and type of risks they are vulnerable to. Evaluating risk levels is essential for insurance providers because it helps determine the type of insurance coverage required.
Quantity of product
How much are you selling? The amount of product a business owner is selling at a craft show will determine the risk factor. For example, a vendor who brings 200 necklaces to sell at a booth may require more coverage than a vendor who sells 100 scarves at a booth. The quantity determines the overall value of the product being sold and the amount of product that needs to be insured. An insurance broker or company will decide the type of coverage available based on inventory.
Duration of involvement
How long will you be involved in the craft show? The majority of craft vendors are involved in craft shows for a specific amount of time, such as the holiday season or multiple day-long events. An insurance broker or company needs to know how long craft vendors will be participating in the show and the product being sold. If a business decides to extend its insurance policy, its broker and insurance company should know.
If selling at multiple locations
Are you selling your products at multiple events? It’s not uncommon for vendors to sell their products at multiple craft shows. You can do this, but your insurance broker or company has to know because it prevents further risks of theft and property damage. In some cases, additional coverage may be required for additional locations and events.
How products get to the venue
How are you getting your products to the venue? If you’re bringing your products to the event in a vehicle, business insurance for the vehicle may be needed. It protects you as a business owner from financial losses if property damage occurs on the way to the venue. If you are using more than one vehicle, review fleet insurance requirements before heading to the event. Contact a BrokerLink broker to get a business auto insurance quote.
Amount of cash on hand
How much money will you have with you? The majority of small businesses selling handmade products at craft shows encourage cash payments. Insurance coverage will protect business owners from unique risks, such as theft. Some insurance policies provide coverage for comprehensive dishonesty, disappearance, and destruction of money and securities. Contacting a BrokerLink broker allows business owners to protect on-hand cash.
Venue insurance limit
What is the venue’s insurance limit? Craft shows usually request business owners to have a specific amount of insurance coverage and proof of insurance to be a vendor. Contacting the venue you are going to sell at beforehand can be helpful in determining the type of coverage you need. From there, you can confirm with your BrokerLink broker that you have sufficient coverage. Additionally, it’s important to consider business general liability insurance. It protects craft vendors from significant financial loss, such as a lawsuit from someone tripping and falling on an extension cord.
Types of insurance coverage required for craft show vendors
Not having adequate coverage can increase your insurance premiums in the future. Those selling at craft shows need a couple of types of insurance to protect themselves from the unique risks presented by selling at these events. It’s wise to purchase coverage because craft fairs require a certain level of risk management. Let’s review the best types of insurance coverage for craft show vendors:
General liability insurance
General liability insurance is helpful because it protects small businesses from potential lawsuits. Common ones include third-party liability claims such as property damage, bodily injury, and personal and advertising injury. For more information, review our third-party liability insurance guide.
Business equipment insurance
Having proof of insurance is essential, especially business equipment insurance. If you rent or borrow equipment for your booth, such as tablets, laptops, or projectors, this type of insurance coverage will allow you to compensate the owner if any damage occurs.
Commercial property insurance
Event organizers often rent out spaces and ask craft vendors for proof of insurance. However, commercial property insurance is still essential to have. Otherwise, you might be held responsible for any damages caused during the duration of your event.
Product liability insurance
Another type of vendor insurance coverage you should have as a seller is product liability insurance. It will protect against the risks of bodily injury or property damage that could happen after selling a product, such as an allergic reaction to soap or getting burned by a candle.
Contact BrokerLink today!
Craft fairs are great opportunities for small businesses to sell their handmade products. This type of event requires much planning— proof of insurance is essential. It’s your duty as a policyholder to ensure you have the business insurance coverage required by the venue to avoid general liability claims and potential losses.
For business owners who have questions about their current insurance or insurance they need for craft shows, contact a local BrokerLink broker. We guide business owners through the process and find the best business insurance.
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