Business Insurance for Scrapbooking Businesses

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Business insurance is designed to protect a business owner's financial assets and is an essential investment for a scrapbooking business.

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About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.

COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A SCRAPBOOKING BUSINESS

Example 1: A visitor to your business is on her way into your restroom when she slips and falls on a wet floor. She decides to sue your business for her broken arm. Your general liability insurance policy will pay for your legal defense fees, including the cost of hiring an attorney.

Example 2: Another scrapbooking business has filed a lawsuit against your business for libel. You are uncertain why they think that you libeled them, but you do know that you need a lawyer sooner rather than later. The general liability insurance policy you have will pay for your legal defense costs if you face libel accusations.

Example 3: While you are away from your office, your cat spills a cup of coffee on the photos and memorabilia of a client. By the time you get back, the coffee has ruined the client’s property. Your general liability insurance policy covers damage to customer property. You can file a claim to get help paying for the damages.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

Cost of General Liability Insurance

On average, scrapbooking businesses in America spend between $300 - $600 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner's policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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Other Types of Coverage scrapbooking businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all scrapbooking businesses should obtain:

Product Liability Insurance

You want your scrapbook products to make your customers happy, but you know that there is always a chance that you'll make mistakes. Someone could sue you over your products regardless of your intentions. A product liability policy will pay for your legal defense costs in such a situation. It will cover the cost of hiring an attorney and the cost of a settlement if one is necessary.

Commercial Property Insurance

You have invested a lot in scrapbooking equipment, materials, supplies, and other things that make it possible to run your business. If you were to lose your property in an unexpected event like a fire you might struggle to get more property in a timely manner. Commercial property insurance can make getting replacements faster and easier. It will help pay for the property you lose in covered events.

Types of Coverage Some scrapbooking businesses May Need

In addition to the policies outlined above, there are a few other types of coverage your scrapbooking business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Workers’ Compensation Insurance

If you have employees who help you with your scrapbooking business, most states will require you to carry workers’ compensation insurance. A policy will pay for medical care for work-related injuries for your employees. It will also help cover the wages they lose while they are out of work to heal.

Commercial Umbrella Insurance

An umbrella policy picks up where a general liability insurance policy leaves off. If you exceed the limits of your general liability insurance policy, such as if you were to lose a big lawsuit, the umbrella policy would kick in and start paying the remaining damages. It would continue to pay until it reaches its limits.

Additional Steps to Protect Your Business

Although it's easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business' financial losses after an incident occurs, but it's much better to avoid losses altogether.

 

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business' internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.

Frequently Asked Questions

What is included in a business owner’s policy?

A typical business owner's policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company's needs.

What is the difference between business insurance and general liability insurance?

"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it's best to be proactive when it comes to protecting your assets. After all, you can't buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.