Artist’s who work out of their home may think they have coverage with their Homeowner insurance company, but do they?
I get it, most artists have lofts, special rooms or detached structures where they create, show and sell their art.
The Limitation and Exclusion: Business personal property on premises.
Here is the simple 2 question test if the exclusion applies. If you answer yes, an Artist Insurance policy is recommended
- Continuity of activity
- Monetary gain (profit motive)
Homeowners Insurance Policies for Owners or Tenants are designed to protect you and your personal property. These policies contain liability for trip and fall, house parties, lawsuits against you and members of the household for bodily injury or property damage to someone or their stuff.
The exclusions/limitations for a business in your home are very limited unless you take some measures to add back coverages.
The Homeowner Insurance Policies are very strict and are looking to avoid anything to do with a business in the home, unless they know about it and add special endorsements.
First, I would like to point out that any art, materials, books or paperwork stored in a detached structure, voids coverage for that structure unless it is added by endorsement to the policy. If the “Art stuff” is in the home than it will not void the insurance coverage, but the limit for business property is usually $2,500.00 and work you created is not valued at retail price, but just materials.
Secondly, Liability is not covered by the Homeowner’s policy for anything to do with the business, if someone got hurt during a studio visit, the claim would be denied.
To somewhat fix this, add “other structures on the residence’s premises”, if the value exceeds the basic coverage on the current policy. To protect you from trip and fall claims, add, “Permitted Incidental Occupancies”. Note the situation where you have more than $2,500 of personal property, you should be looking for an Artist carve out policy, like an Artist Studio Policy.
When it comes to the Liability, the homeowners have a few endorsements you could use, “Permitted Incidental Occupancies”, usually costing $27.00 for $500,000 worth of coverage, but they have limitations, such as premises only, no additional insured’s and no products or completed operation coverage. It’s best to look for a carve-out policy for this too. I recommend buying a separate Business owner’s policy for just simple fixtures since all the others should be insured in my program.
Artist’s who create at home are better to have an Artist policy which evaluates the work using retail value, not materials cost. An artist policy which includes, All works for sale, materials, tools, reference library, transportation, while in storage, at Exhibitions and worldwide; All the coverages loaded into my Artist Policy Program.
To discuss your particular situation contact me,
William G Fleischer CIC Principal T: 212 566-1881 ext.111 firstname.lastname@example.org