Editor’s note: This article was originally published on November 19, 2013 and was updated on September 10, 2015.
Getting Small Business Insurance Just Right: Lessons From St. Jacob’s Farmer's Market.
If you have ever lived in or traveled to the Kitchener/Waterloo area, you have probably visited the iconic St. Jacob’s Farmer’s Market and the beautiful surrounding town. On Labour Day 2013, the central building of the Market burned down, leaving vendors in the lurch, mostly because they didn’t have proper insurance coverage. Most of the vendors had liability coverage, which they were required to have by the Market, but nothing that would cover their equipment, loss of business, or inventory. We’ll take a look at what you can do to avoid this fate with your business.
1. Talk it Out In Person With a Professional
Business insurance isn’t the kind of service you want to purchase online or even over the phone. You need to take the time to sit down with an insurance broker who is genuinely interested in getting to know your business. Often, they’ll come up with things that you need coverage for that you didn’t even think about. Make sure you’re talking to a broker who specializes in business insurance, as they’ll know more important details than a broker who specializes in home or life insurance.
You need to take the time to sit down with an insurance broker who is genuinely interested in getting to know your business.
2. You’re Never Too Small For Business Insurance
You may think that because you’re running a small business selling cupcakes or a network marketing company selling items like cookware or cosmetics that you don’t need insurance for your business items. Most micro-business owners think that their home insurance will cover any loss of inventory if it is destroyed at their home. While this may be the case with some home insurance, frequently it is only available as an extra rider, and that extra rider may not cover items like the loss or theft of your inventory at a market, liability for holding sales sessions in another person’s home, and so on. See #1 – talk to a business insurance professional for the full story.
3. Keep Your Broker in The Loop
Glenn Panert, Co-Director of the Conestoga College Business Insurance Program, had a personal interest in the Market; his daughter had a cupcake business there. But he admitted in a news piece that they didn’t update their broker with the fact that they had purchased a new piece of equipment that subsequently wasn’t covered after the fire. The key here is to update your broker with each new equipment purchase. One good way to do this is to set a reminder for yourself once every few months in your appointment calendar to talk to your broker; Google Calendar is a great free tool to use for this.
Set a reminder for yourself once every few months in your appointment calendar to talk to your broker
4. Don’t Forget Business Interruption Insurance
Even if you have a very small business, chances are good that it makes you an income that would be missed if your business was interrupted due to illness, loss of equipment, or loss of inventory. If it’s only a small amount monthly, a Business Interruption rider should be available to you at a low cost.
5. Get Traveling Coverage for Inventory and Liability
If you’re selling your wares at trade shows, gift shows, farmer’s markets, or any other spot, you’ll want to look into traveling coverage for your inventory. Some business insurance will only cover inventory if the loss occurs on your premises, such as a home office. Chances are good you’ll already have liability coverage as a requirement of being a vendor at some of these venues, but if you don’t, it’s worth considering as well, especially if you’ll be doing sales presentations in another person’s home. Their home insurance may not cover the liability if you damage something on their property, which could leave you holding the bag.
Got questions about insurance for your small business?