Business Insurance - A discussion for those of us that need to decide on coverage

[ChrisPerry]

Alright, I admit it, I'm self insured - aka, not insured

I know I should have insurance of some type...what type?
I've looked at about 6 different companies in the past 2 months and there are a lot of variations of what's covered and what's not and what it costs.

As a sole proprietor with no employees, no traveling outside the US, Ihave a studio in my home and do weddings and such on location I need an assortment of coverage...but what?

$1m is basic business liability is common. Fine, they all offer that (or more coverage for more money)
Equipment - I don't plan to use this unless all my equipment walks away or burns up, so to me it's not a high priority ($1000 deductible..my most expensive singe item is a 30D and if it got dropped i'd just buy one and avoid the risks that follow a claim such as non-renewal or higher rates)

To those of you in the biz for a few years, what else is acutally of value?
-workers comp -business interruption -e&o or similar (ppa and one other copmany off this) -theft or A/R issues -auto (i have car insurance, but not 'business' car insurance) -loss of income (due to ??) -EEO/HR issues

I plan to grow and may take on a partner in 2007 and if it works as planned buy a building and hire people...but that's a year off at least IMO.

Input?
Any good or bad companies out there?
I've spoken with allstate, erie, marsh, zurich, wedj.com (or whoever they use, i forget) and hill&usher and probably one or two others.

[ChrisPurves]

Originally Posted by ChrisPerry

Alright, I admit it, I'm self insured - aka, not insured

I know I should have insurance of some type...what type?

Hi Chris: I took a chance for awhile but bit the bullet this summer.
I am insured as a home based business on my home insurance. I shoot dog shows so only the processing is done at home. I told my agent that and was assured that this covers me.
I have

2 million liability
$ 35,000 equipment coverage but limited to $ 5000.00 per incident
$ 500 deductible for equipment - but it is no fault coverage
loss of business - I can't remember how much but it doesn't kick in right away there is some sort of deductible.

Cost of that coverage is $ 350.00 year because it is home based business.

My vehicle insurance is a small adder for business use. (about $ 75.00 year)

My main concern is the liability issue. When we set up at a dog show we have strobes on light stands and a 20ft backdrop so I'm wary of equipment falling or being tripped over or what have you.

I live in Canada so in the states I don't know what would be different but look at the home based aspect. I would think you qualify.

Cheers
Chris

[Ian_D_Griffiths]

Chris Perry,

I don't know how you can survive without at least Public Liability Insurance?

I pay £265 (US$490) a year for the PL section of my insurance, this gives me £5m (US$9m) coverage. I need this level because I do a lot of work at motor race tracks but that aside I often have to produce my certificate for inspection at many events even in hotels when attending dinner dances, City Council land, schools etc. Do you not have to show this?

For some local authorities we also have to have Risk Assessment Statements, any hazrds in or around our set up have to bear the correct EU markings and all mains equipment has to have an annual saftey check (PET).

We had a lucky escape this year, I thought that I was going to get sued.

Attending an off-road 4x4 trial and a freak gust of wind lifted the awning on the side of the van, pulling 4 x 12" stakes out of the ground. As a saftey measure I always have two 25lb concrete tubs attached to the awning by rope, a bit "Belt and braces" but I always use protection!

As the awning took off like a 15ft square kite, it swung one of the concrete tubs like a pendlum, hitting a lady and knocking her to the ground, the medics were called by my assistant even thought the lady said she was fine, she had a classic cartoon lump on the side of her head.

Luckily, she said she didn't want to take it any further, as far as she was concerned is was beyond my ability to forsee a freak gust and that I had acted properly in the way the awning was secured, she said "It was one of those acts of God" well that may be taking it a bit far but I wasn't going to argue!

Just to think how this could have gone? Still sends me cold but without insurance I'd have been dead meat, it could easily have cost me my home and the rest of my lifes income!

The UK is not as letigious as the US and Canada so you are running an even greater risk.

Please, from someone who could so easily have been sued big time, at least get yourself some Public Liability coverage, if not just for your protection but for the unlucky person who may get seriously injured.

[JohnHHarrington]

Chris --

With all due respect, I consider it grossly irresponsible to operate a business without insurance. You can't operate a car or own a home without it, and the only reason you probably have those insurance types is because the law and your mortgage company requires it. They are looking out for society at large, and their own investment in your home, but you're not looking out for yourself. Big mistake.

I applaud that you've realized you need it, and are now taking the necessary steps to secure coverage. I can assure you that if you are going to get a building and run a business from it, the bank that loans you/your business the money will want to make sure you're insured, and the occupancy permit may require it.

I'd begin by checking with the professional organizations you are (or should be) a member of. NPPA, PPA, ASMP, and APA all have affiliated companies that will give you a discount for being a member.

To that end, I'd avoid a company that's not got specific policies for photographers, and make sure that your equipment insurance is replacement value, not a depreciated replacement basis.

Don't forget disability coverage, long term care, and life insurance. If you have a family, and care about them, these are no-brainers.

Regards,
John

[ChrisPerry]

Insurance is optional on all but the automobile - and if you can prove $50,000 in assets you don't neet that either.
If you have a mortgage then THEY require you have insurance to cover THEM (it's their money in your house not yours).
i have life insurance and health insurance.

I have never been asked for proof of insurance. Perhaps England is different than over here in the 'colonies' - and just $1m in liability is $350/yr. I couldn't imagine what $9m would be

As for home based biz - if i never shot off my premises it would cost me $37 a year. Yep, thirty seven dollars. For regular biz insurance I'm seeing $500-650 for $1m-$2m depending on the company and $15,000 in equipment and then the details vary quite a bit. One will pay to restage a wedding or event (up to $25K) if you missed images due to a mechanical malfunction or lost film, etc, all but one are $1000 deductibles, some cover hiring discrimination and another pays for all sorts of oddities (terrorism, backed up drains, A/R bad debt, dishonest employees). It's quite bewildering all the options out there.

And it's not irresponsible to work without insurance - perhaps unwise, but not irresponsible. I've had ONE insurance claim in 25 years of paying various kinds of insurance (excluding health insurance of course). I'm not a wild and crazy person and don't plan to change. All i'm doing is risking my life savings LOL - but insurance is gambling IMO - you're betting you'll need it and the insurance companies bet you don't. They win in the end.

As for PPA etc I do belong to the local PPA affiliated organization. I posted a poll over at FM and perhaps 1/10 of 1% belong to anything at all it seemed. Not very encouraging IMO. (for the industry as a whole). This is one reason I came here - I'm wanting to move beyond the weekend warrior type and make a business of photography.

PPA uses Hill and Usher and you can get the same policy wihout joining PPA, so says Hill and Usher anyway.

Zurich seems to be the best overall value to me, but that's why I'm asking what does a photographer need - as in what have you claimed or heard of being claimed by other photogs over the years?

I don't live in flood zone, earthquake or firestorm prone area, but of course anything can happen and most policies include 'business continuation' coverage - whatever that really means.

[RickArnold]

$2M Liability + 65K in equipment and rental property insurance costs me $600 a year. My PPA membership gets me basically Errors and Omissions for the measly $200-$300 yearly. Anyone doing business for me is covered for both the equipment and the liability with these coverages.

I am really surprised you have not had an issue with sites not wanting you on the premises with at least $1M liability coverage. I get asked all the time especially by government owned facilities like schools or their fields.

In my opinion not having the basics of coverage is being a little naive. Sure you have not had but one claim in 25 years and the deductibles are a lot compared with what might be damaged but its not equipment you have to worry about.

The issue is that you are viewed as a business by the general public. If for example you had a light fall over and hit someone on the head and they had to go get stitches (yes a minor event) you not only have to cover their medical expenses but you are now wide open for a law suit claiming just about anything you could imagine. The bad thing about this is that you would not even be able to afford to defend yourself without realistically putting all your personal assets at risk. People are sue happy these days. Now imagine if you had a truly bad event like your light falling over and electrocuting someone.

Liability is for the true accidents and afford you some buffer between a litigant and your personal holdings especially if you are like me and work as a Sole Proprietor.

Its pretty cheap compared to what we pay for equipment