So you've done some research and are gearing up to buy business insurance for your photography business. You want a policy that covers your liabilities and protects your gear, but you don't want it to break the bank. How do you ensure you get the insurance you need and want?
Answer: work with an agent who knows the risks of the industry and can guide you through the process. To get a good understanding of what you're purchasing, consider asking your agent the following questions.
1. What are the limits?
Are they too high? Too low? Will the insurance policy provide enough protection if push comes to shove and you end up in court defending against a crazy-expensive lawsuit?
In case you aren't familiar, limits refer to the maximum amount of money the insurance provider pays out on a policy. These are usually broken down into the following sub-limits…
- The limit for a single claim.
- The limit for claims of a certain type.
The aggregate limit is the total amount of money you can receive during the policy term. Once the limit is reached, that policy can't provide any more coverage. Higher limits usually mean higher premiums but offer more coverage.
To get a sense of the limits you might need, ask about comparable policies for similar-sized businesses in your field. It's common for General Liability Insurance policies for small businesses to have a $1 million limit. To increase your coverage but keep your premiums affordable, ask your agent about Umbrella Insurance, a policy that can supplement your GL coverage once its limits have been reached.
2. Do I need to schedule my equipment separately?
When you purchase Commercial Property Insurance or Inland Marine Insurance, the policy provides coverage up to a certain limit. However, the bulk of a professional's photography equipment might exceed that limit (heck, even a single expensive camera might surpass that limit). To properly cover all your gear, you may need to schedule it separately.
In insurance, a schedule refers to a list of property. Particularly expensive items should be scheduled. Otherwise, if they are damaged or stolen, the policy might not offer enough payment for their replacement. Your agent can let you know whether you should schedule items or not.
3. Do I qualify for a BOP or another bundle?
Photographers may be eligible to purchase a Business Owner's Policy (BOP) if their business is small, low-risk, and has few employees. A BOP is a convenient and affordable way to purchase both General Liability and Property Insurance in one fell swoop.
Ask your agent if you qualify or if there are other discounted insurance bundles you can purchase.
4. What does the liability portion cover?
You'll want to have a good understanding of how each policy covers you. For instance, General Liability covers third-party injuries and property damage, but it doesn't cover lawsuits over your work.
Professional Liability Insurance (aka Errors & Omissions Insurance) deals with liability for your work. If you allegedly deliver a subpar product or there are disputes over the contract, this is the insurance you need to ask about. Don't assume a liability is covered without reading the policy first or asking for clarification.
5. What do I have to do to make a claim?
You have the coverage. Now what? Each insurance provider or agent may deal with claims a different way, so ask your agent about your responsibilities. Be sure to get answers to the following questions…
- Should you call the agent or the provider when you first hear about a claim?
- Who will provide the paperwork for the claim?
- Who is your point of contact during the claims process?
Keep this knowledge handy for when the time comes. You won't have to make a claim often, but you'll want to know what to do when you get there.