Craft Vendor Business Insurance

Craft vendors can compare business insurance policies from top providers through Insuranceopedia to find the right coverage for general liability, property damage, and employee protection.

Why Do Craft Vendors Need Insurance?

Craft vendors need to protect their business against claims of property damage, accidents, or injuries. There are often requirements from different craft markets or craft fairs in order to get vendor approval.

Consider that handmade items like candles that might cause allergic reactions or harm could result in claims, but the right product liability insurance can protect against them. The setup or operations from your booth could cause property damage to a venue, but the right type of insurance can cover claims or settlements associated with it.

Then you add the risks of your inventory; the right Insurance can protect your business equipment, including tools and display items, as well as your products against loss or damage.

It also adds credibility—many customers and clients require proof of insurance before contracting with a craft vendor. If you’re an independent contractor or you have a business with several contractors under your employ, having the right insurance helps you operate confidently, knowing you’re covered if something goes wrong.

What Insurance Do Craft Vendors Need?

Selling handmade goods brings unique challenges, from managing inventory to setting up pop-up shops. To safeguard your hard work, you need coverage that addresses risks like property damage, customer injuries, and travel mishaps. Here is a look at the key types of business insurance policies available for your business.

General Liability Insurance

This is the starting point for most craft businesses. It offers protection against third-party lawsuits regarding bodily injury, advertising injury, or property damage. If a customer gets hurt because of your operations, this coverage handles medical expenses and legal defense costs.

Example: A customer trips over a display box at your market stall and breaks their wrist. They decide to sue you. General liability helps cover their medical bills and your legal fees.

Inland Marine Insurance

Since craft vendors frequently travel to fairs and markets, this policy is vital. It covers your tools, equipment, and finished products while they are in transit or at a temporary job site. It fills the gap where standard property insurance stops coverage once items leave your main premises.

Example: You are driving to a holiday market when your van is broken into during a rest stop. Your inventory is stolen. Inland marine coverage compensates you for the lost goods.

Business Owner’s Policy (BOP)

A BOP is a cost-effective way to get broad coverage. It usually bundles general liability and commercial property insurance into a single package. This is often cheaper than purchasing the policies separately and covers both your liability risks and physical assets.

Example: A pipe bursts in your studio, ruining your supplies and damaging the floor. A BOP helps pay for the repairs and the replacement of your materials.

Professional Liability Insurance

Also known as Errors and Omissions insurance, this protects you if a mistake in your work causes financial loss or physical harm to a client. Professional liability insurance provides legal defense in the event a customer claims your product was negligent or failed to perform as promised. The average cost for this protection is around $23 per month.

Example: You sell handmade soaps but fail to list a specific allergen on the label. A customer has a severe reaction and sues for damages. This policy helps cover the settlement costs.

Commercial Auto Insurance

Personal car insurance policies rarely cover accidents that happen while you are driving for business. If you own a vehicle dedicated to your craft business, this policy covers damages and liability in the event of a crash.

Example: You are driving your company van to deliver a custom order and rear-end another driver. Commercial auto insurance pays for the damage to the other car and medical costs for the other driver.

Workers’ Compensation Insurance

If you hire help to run your booth or make products, you likely need this coverage by law. It provides coverage for medical care and lost wages if an employee is injured or becomes ill due to their work duties. It also provides death benefits in tragic circumstances.

Example: An employee hurts their back while lifting heavy crates of pottery at a trade show. Workers’ compensation covers their doctor visits and a portion of their wages while they recover.

Business Personal Property (BPP) Insurance

This coverage focuses on movable assets. It protects items like your furniture, inventory, and booth setup gear from risks like fire or theft. It ensures that if your essential tools are destroyed, you can afford to replace them.

Example: A fire at your storage unit destroys your custom display racks and tent. BPP coverage helps pay to replace these items so you can return to selling.

Hired And Non-Owned Auto (HNOA) Insurance

This acts as liability coverage for vehicles your business uses but does not own. This includes employees driving their own cars for work errands or vehicles you rent for a specific event.

Example: You rent a larger van to transport inventory to a state fair, and you accidentally side-swipe a parked car. HNOA helps cover the liability costs associated with the rental vehicle accident.

Commercial Property Insurance

This protects the physical location where you do business, whether it is a leased shop or a home workshop. It covers the structure and the contents inside against perils like fire, vandalism, and severe weather.

Example: A severe storm blows a tree branch through the window of your workshop, damaging the roof and your equipment. Commercial property insurance pays for the structural repairs and damaged contents.

Business Interruption Insurance

Disasters can force you to shut down temporarily. Business interruption insurance replaces lost net income during that downtime. It is particularly useful for vendors who rely on seasonal revenue and cannot afford a pause in operations.

Example: A fire in your complex forces you to close your shop for three weeks during the busy spring season. This policy helps cover the income you would have made during that period, as well as ongoing bills like rent.

Cyber Liability Insurance

If you accept credit cards or store customer data online, you face digital risks. This policy helps cover the costs associated with data breaches, including legal fees, notifying customers, and credit monitoring services.

Example: Your online store is hacked, and customer credit card numbers are stolen. Cyber liability insurance helps pay for the investigation and the required notifications to affected clients.

Umbrella Insurance

When a claim is massive and exceeds the limits of your primary policies, umbrella insurance provides a safety net. It kicks in after your general liability or auto policy limits are exhausted.

Example: You are sued for $1.5 million after a major accident involving your product. Your general liability policy only covers up to $1 million. Umbrella insurance covers the remaining $500,000.

Cheapest Craft Vendor Workers’ Compensation Insurance

The cheapest option for workers’ compensation insurance is The Hartford, with an average annual cost of $157.

Note: The estimates above represent minimum annual premiums for a craft vendor or artisan with no employees (sole proprietor “ghost policies”) or very low payroll (one part-time employee). Actual premiums will vary based on your state’s specific workers’ compensation laws, your total annual payroll, and the specific class code assigned to your craft business (e.g., 8017 for Retail Store or specific manufacturing codes).

Cheapest Craft Vendor General Liability Insurance

The cheapest option for general liability insurance is Next Insurance, with an average annual cost of $203.

Note: These figures are based on entry-level general liability policies for craft vendors with annual revenues under $50,000. Actual premiums will vary depending on your selected coverage limits (e.g., $1 million vs. $2 million aggregate), your sales volume, the types of products you sell (e.g., candles and topicals may carry higher rates than knitwear), and whether you require additional insured endorsements for events.

Cheapest Craft Vendor Business Owner’s Policy

The cheapest option for a Business Owner’s Policy (BOP) is Next Insurance, with an average annual cost of $323.

Note: These estimates refer to a bundled Business Owner’s Policy, which typically includes General Liability and Commercial Property coverage for business personal property (inventory and equipment). Actual premiums will vary based on the total value of the equipment and inventory you need to insure, the deductible you choose, and the security features of your storage location or workspace.

How Much Does Craft Vendor Business Insurance Cost?

Craft vendors pay an average of $34 per month for general liability insurance. Several factors influence the cost of coverage, including your business location, the number of employees, the types of services you offer, the records you keep, your claims history, and the products you sell.

Insurers also consider the amount of coverage you choose and whether you package policies together. While it may be tempting to go with the cheapest option, it’s important to choose a plan that truly protects your business from its most likely risks.

Note: The estimates above are based on current market averages for small business insurance policies in the United States, specifically tailored for craft vendors and artisans. Actual premiums will vary significantly based on factors such as your specific location, annual revenue, the types of products sold (e.g., candles vs. knitwear), coverage limits selected, and your business’s claims history.

How Is Your Craft Vendor Business Insurance Cost Calculated?

Insurers evaluate several details to decide how much your policy will cost. They look at the specific risks involved in making and selling your goods. The type of product you sell is a primary factor. You will likely pay more if you use hazardous materials or sell items that could cause injury. Higher sales volume can also lead to higher rates because it increases your exposure to potential lawsuits.

Your location is another major piece of the puzzle. Premiums are often higher in areas known for severe weather or high theft rates. State laws also influence the price by setting minimum coverage standards.

Underwriters will review your past insurance history as well. If you have filed claims in the past, they might view you as a higher risk. The value of your equipment and whether you own a work vehicle also impact the final price. Finally, the specific coverage limits and deductibles you choose will directly change your monthly rate. Even your business structure, such as being an LLC or a sole proprietor, helps determine the cost.

Following these steps helps ensure you’re properly insured and set up to handle risks confidently and professionally.