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When you spend your time, money and energy into building a business – you need to make sure that you are protecting what you’ve built.
While it may be super exciting and sexy to invest in marketing, equipment or props, protection should not be overlooked.
Even though you may have the right contracts and business formation in place, having insurance can help to reduce the probability of liability and act as a middleman in case any claims do arise.
While you should always consult with an insurance agent to make sure you have all the coverages you need, here are some of the main things you need to consider and purchase when getting photography business insurance.
So why do you need photography business insurance?
For photography business owners, equipment and liability insurance are the most critical insurance policies to secure protection. Even though you may be set up as a limited liability company (LLC) or a corporation, there is no limit to the need for business insurance. These formations just act as another layer of protection, whereas insurance can be a hurdle for a claim to have to get over before getting to your formation protection layer.
Furthermore, some state laws may require that your business transactions be covered by a certain form of insurance.
Additionally, when shooting in a variety of venues, proof of insurance may be required. Besides potential legal requirements, having insurance minimizes the risks that are associated with potential liabilities, losses, and unfortunate events.
What types of insurance do you need?
#1 Equipment Insurance
This will cover all equipment related to a loss or damage due to a variety of events. The type of equipment, coverage and loss causes will be defined through specific coverage policies.
At a minimum, photographers need equipment insurance to cover the following equipment: camera, lenses, computers, business interruption, etc. Equipment insurance should also cover the basic losses due to severe weather, damage through dropping, and theft.
It is especially important to not assume that your homeowner or renter insurance covers business equipment as many policies exempt equipment used for income purpose.
#2 General Liability Insurance
This insurance is especially critical for photographers working in sensitive specializations (wedding, newborn, extreme sports, etc.) This insurance works as an umbrella to provide protection against legal actions arising from injuries, accidents and other claims.
Liability insurance coverage amounts depend on your specific business goals, circumstances, and plans.
#3 Commercial Automobile Insurance
This insurance acts to cover the photographer for auto accidents in case the personal automobile insurance does not cover commercial activities. It provides financial protection against potential bodily injury and physical damage to the vehicle that results from automobile accidents.
Some jurisdictions require this insurance to be held under specific circumstances so always check your local laws.
Do not rely on your personal automobile insurance to cover business activities. Always check with your insurance agent.
#4 Disability Insurance
Disability insurance is often a policy that sits on business owner’s to-do list but never really comes to fruition. If you are the bread-winner, sole money earner and/or your family heavily relies on your income- this should be a non-negotiable in your business expenses.
This insurance is a form that insures the photographer’s earned income against the risk of disability (sickness, etc.) that prevents them to fulfill their work capacity.
As a small business owner, planning to weather bad storms that may come your way is worth the investment and time especially when it could potentially cut off all income.
#5 Property Insurance (Owner or Renter)
If you own or rent a studio, insurance to protect against damage to the building and items within are crucial. It is also important that a photographer consider selecting a policy that includes business loss of earning insurance to protect earnings in the event that the shooting location is damaged or destroyed.
Note: Some property insurance policies include all equipment within the property and others do not.
Always read your policy.
#6 Life Insurance
This type of insurance is important for a small business owner’s peace of mind and allows your family and friends to be covered in the event of your death. Savings helps to provide in the event of death but life insurance can help to supplement for settlement of debts and related expenses in closing up the business.
Life insurance is often another overlooked policy – much like the disability insurance. This insurance is particularly important if you’re failing to put away sufficient funds in case of “life” situation.
Also, check for these types or inclusions on policies:
- business interruption
- short-term disability
- long-term disability
What others ways can you protect yourself?
Insurance is just one of the ways to safeguard your business. Other ways include selecting a business structure that limits liability and using proper legal contracts in every business transaction.
Each of these tools does offer some protection – but they work best in layers.
First, having proper lawyer-drafted contracts implemented in your business will help to inform customers of policies, provide hurdles to any issues a customer may have and provide a legal document to be referenced in situations.
Next, you have a layer of a liability insurance policy. By having this layer, you can defer clients to the company to resolve any potential liability issues that arise. This frees you up to focus on your business and (hopefully) reduce costs to extinguish any “fires” that may come up.
The core layer would be your business formation choice. For example, choosing a Limited Liability Company divides the business and personal assets for protection. With the formation at the core, if customers get through the last two layers, then they have to engage in a legal transaction such as court or mediation for a resolution.
Flying blind will lead your business to crash. Don’t fly blind. Be smart and choose the layers of protection for your business.