My home shop hobby has slowly evolved into a small profitable business. A while back I contacted my home owners insurance agent to see if additional coverage was needed…and he was quick to explain that since it is a business, my home owners policy simply does not cover the shop, equipment, or liabilities associated. I phoned around in the local yellow pages for info on small business insurance…..but it seems that my hobby business is too small for coverage.
Here’s is the reality, how do I protect myself should some file a claim against my work . For example, what if a child falls from a swing that I built, or off of a chair and unfortunately is injured. Then an ambulance chasing attorney convinces the parents that they are entitled to the value of my personal assets.
I’ve set up a LLC in an effort to separate my personal assets from the hobby business, but after talking with a lawyer friend, he stated that the nature of a hobby business is a sole proprietorship which is often vulnerable to piercing. He felt that is wasn’t an issue of trying to prevent a suit…but rather to be prepared in the case that it happens. His recommendation was to get insurance such that the insurance company will provide the defense in the worst case scenario.
…and finally, this is were the problem comes in….I can’t find an insurance agent who will write a policy due to the small size of my operation.
I’m sure that I’m not alone. I see craftsman from all trades selling their art and products at festivals, shops, web sites..etc. What do they all do?
Does anyone have any insite to this situation? ..or an insurance agent that understands a hobby/craftsman’s business with a willingness to write a policy.