When considering selling direct to the consumer, the location your customers visit and the type of products you provide will change what insurance you need. As with everything in insurance, it all comes down to risk. The greater amount of risk, the more insurance you will need to have to be protected.
Whether you’re selling fruits and veggies, bread, pies, or handmade jewelry, you need the right insurance for your products and selling location. This could range from adding an endorsement to your existing coverage to starting from scratch with a new policy.
Here are some topics to consider and how to get started with the right insurance for you.
Where are you selling your products?
If you’re selling goods at your own farm or home, this means you will be letting people onto your property. This is an additional risk is due to whatever possible hazards you could have to the customer, including farm or ranch equipment and machinery. Having customers on-site could cause them to encounter the items you need to do your normal business.
If you are operating at a market or collective, the location may have specific requirements you need to meet such as proof of insurance, minimum insurance expectations, and permits. Here are some places you might find this information:
- Check the website of the market or collective. They may have a dedicated page or information on their registration form for the expected on-premises coverage.
- Locate Facebook, Reddit, or other social media groups for the market. This group will have all the inside information for getting started.
- Your state’s Department of Revenue or Department of Health may have a list of requirements for doing business at these types of locations.
One thing to keep in mind when selling at a market – you are renting the space and you may be liable for whatever is in your space. If your booth includes a table, chairs, canopy, or other items remember it’s your responsibility. It’s not just what you sell, but everything you need to do business in that space.
Do food or craft vendors need insurance?
Whatever product you are selling, whether its homemade crafts and jewelry or jams and pies, you should have a general liability policy. Several factors go into determining the liability coverage you need for your business and will need to be evaluated with a commercial insurance professional.
In most cases, a general liability policy includes an occurrence and an aggregate limit. Occurrence limits are the coverage per claim with aggregate limits are a total. These coverages also apply to completed operations, which is normally what your finished product is. So, whether that’s a deck or a cookie, jam, or bracelet, a general liability policy will cover your business.
Real world context
Liability coverage is a complicated topic. Here are some scenarios to help add context to possible solutions.
Scenario 1: I have a blueberry farm and want to add a farm stand to my property. What kind of insurance do I need?
If you have a farm, you more than likely have a hobby farm or traditional farm insurance policy. The liability from your farm policy may extend to the farm stand on your premise. If you want physical damage coverage for the physical stand or structure, then you will want to add it to your policy as farm building.
Scenario 2: I sell homemade jewelry on my website and Etsy. I want to start selling at craft fairs and collectives. How can I be protected?
Selling exclusively out of your home requires different coverage than selling at a booth or collective table. Both coverage options will want to know how much your inventory is valued at and where you’re going to be selling. If out of your home and online only, you can get a home-based policy. For a stand or booth, you will need a business owners policy that will cover liability, products, and property. These policies will have a minimum premium but will cover all locations you are selling from. The market may request a proof of insurance, in which your insurer can provide a certificate.
Scenario 3: I’m starting a new home business making baked goods and I want to sell at my local farmer’s market. What insurance should I have to get started?
Before diving in, check with the landlord of the market and other vendors to see what the insurance requirements are. Send this information to the insurance companies when requesting a quote. This will give you two benefits. First, you’ll know you are meeting the requirements to sell. Second, you will have a level playing field when comparing quotes. Ideally your coverage will include commercial general liability and property insurance for your inventory and all the equipment needed for your business.
The benefits of finding a local partner
Understanding all the complexities of selling at local markets, trade fairs, or even at the end of your driveway can be complicated depending on your location. This is where a local insurance agency can help. Working with a local expert, combined with a regional insurance carrier, you will get the coverage that will best protect you.
One of the benefits of working with a local insurance agency is the ability to find regional insurance companies. Large national insurance companies aren’t always the best for every insurance option or scenario. Regional insurance companies, such as Mutual of Enumclaw, offer solutions to commercial insurance customers that are tailored to their needs. These companies understand the local restrictions, requirements, and work with independent agents who specialize in this type of coverage.
To get started, book an appointment with one of our commercial insurance professionals or give us a call. We’re committed to giving you the best options and help you find the right coverage for your business.
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