• Congratulations to Rick Moreton, People's Choice in the July 2025 Turning Challenge (click here for details)
  • Welcome new registering member. Your username must be your real First and Last name (for example: John Doe). "Screen names" and "handles" are not allowed and your registration will be deleted if you don't use your real name. Also, do not use all caps nor all lower case.

Shop insurance question

B

Bill Szydlo

Joined
Jun 6, 2015
Messages
42
Likes
6
Location
Northfield, MN
My woodshop is in an addition to a detached garage. When I have renewed my homeowners insurance I have always verified that the shop contents were covered and my insurance agent always added the stipulation that if I ever sold anything that I made it would void my shop coverage. He continued to explain that if I wanted to sell anything I made to would involve OSHA and other issues.

Has anyone else encountered this? I do not want to run a full-time business but it would be nice to occasionally participate in local events to get rid of excess inventory but the fear of losing insurance coverage puts a damper on it.

I would be interested if anyone else has encountered this.

Thanks in advance, Bill
 
As long as ur are not teaching or having public tour ur shop to buy something I do not understand insurance stance. If u are selling in galleries or craft shows they have nothing to do with ur shop. City use to tax my business license til they finnally decided it not really a business unless I sold $10000 worth.....no year approach that.....but I do have high value ideas.... lend me $1 .....
 
Bill, notwithstanding Charlie’s post, be aware that every state’s laws with respect to insurance on a wood shop is different. The fact that your agent has given you specific guidance on coverage should tell you exactly what you need to hear. And that is in MN, any commercial sale takes you out of the hobby woodworker/woodturner, into a business. You could take a chance, and do an occasional sale or local show, and if you never have an event that requires you to make a claim on your homeowners policy, or vehicle (think, getting into an accident to/from a show), you may be fine. However, if there is an occurrence, coverage may be denied, and you might end up losing your policy with that insurer.

You should also be aware that many events now require you to produce an insurance policy (a binder) that covers your booth in the event that someone is injured while in your booth, or a wall falls over, hitting and breaking another booth holder’s inventory. The binder will include the promoter as an additional insured as a condition to doing their show. If you do not already have a policy in place, they will often have an insurance carrier who will sell you coverage for that single event, usually for less than $100. This will probably not be the local one day event in the church basement, but you should anticipate that for 2-3 days events that will have better quality craft. Those of course will attract buyers willing to pay higher prices for work, as well.

If you are an AAW member, one of the many benefits of membership is the ability to offer an insurer who will write a commercial liability policy (limited to US) members. I’m covered when I teach in my studio or elsewhere, covered when I demonstrate anywhere, when I do shows, covers my inventory to/from and at shows, 1 mill per person/2 million aggregate. I pay $650 per year.
 
Just like Donna said, the agent is the expert. Just ask another agent of a different company. I do know that in some cities a commercial shop is not allowed on residential property. I decided 10 years ago to self insure. The million dollar liability requirement for teaching at Woodcraft was no longer needed after our store closed, and all my machinery has been depreciated on my taxes.
 
Last edited:
John Hicks said:
Holy smokes. You can't do anything without some "authority" trying to tax, or regulate it!
Click to expand...
Anybody can do anything. It's the getting caught that is the issue. And in an insurance issue, selling a few bowls could violate the insurance policy and void coverage for all the structures on the property. It's still the owner's prerogative to take the gamble.
 
My shop is in our basement. We sell out turnings, have given lessons, and travel to festivals. We have a business policy attached to our home owner's policy that provides liability, covers travel to and from shows, and also covers us while we are at shows. My wife is an employee of our business (sole proprietorship) and we have no requirements concerning OSHA and do not have to have workers comp insurance.
 
Different insurance companies have different policies. If 'profit' is the point of the shop, that is one issue. If people are coming to the shop for instruction and paying for it, that is another issue. Years ago when I was a 'semi pro' the best insurance I could find was through the Hartford, and it was separate from my home owners policy. Detached shop was covered by both business and home owner's policy. I was having some tools made to sell, and that was yet another issue. Don't do that any more either.... I have a new house and shop and since my work is now a hobby, all is covered under my home owners policy.

robo hippy
 
You must log in or register to reply here.
Back
Top