Insuring Your Photography Business – What You Need to Know

From Kirsten Kowalski’s excellent article!

I read a post by a photographer recently that asked if her homeowner’s insurance would cover her photography equipment or if she needed additional insurance.  This got me thinking about how little people understand the insurance industry and I got nervous.  As a lawyer who deals with insurance companies all of the time, I know how hard it is sometimes to make a claim even when you do have the correct coverage.  But if you don’t even have the right coverage, you won’t have anyone on your side, you won’t be in good hands, you won’t have a sophisticated gecko or friendly duck to turn to when that mayhem guy comes a-calling.  And, I can tell you that if you are relying on your homeowner’s insurance to cover your business you don’t have the right coverage.

When looking at insurance options for your photography business, it is important to first analyze your business in terms of what you shoot and what your risks are so that you can choose what types of coverage you need and how much coverage you need. Only then can you shop around for the best quotes. Things you need to consider are:

1. What type of photography do I do?  Are you a portrait photographer working with individual clients?  Do you shoot weddings that cannot be re-created?  Are you a commercial photographer shooting for corporate clients?  Or are you a landscape photographer working for yourself selling fine art prints?

It is important to break down what you do and how you do it so that you can better evaluate your risks and potential liability. For example, if you are a general portrait photographer working with one client at a time at portrait sessions, your risk of loss and liability is probably a lot less than the wedding photographer who is shooting a unique event with large amounts of people. And that wedding photographer’s liability may be a lot less than the commercial photographer who was hired to do a commercial shoot with a $50,000 budget, models, makeup artists, expensive props, etc. How big your risk of loss is will help you determine how much coverage you need. Also, how “big” your business is will help you determine what you can afford. It is very important that you weigh your risks with your financial situation so that you can best determine how much coverage is right for your business.

2. What equipment do I use in my photography business and what is the cost to replace it?  Do you own one mid-priced DSLR with three lenses?  Do you own lighting equipment, computers, tablets?  What about a $20,000 Hasselblad? The value of your equipment is very important in determining how much insurance coverage you need.

3. Do I shoot on location or do I have a studio? Do I rent a studio? Do I own a studio?  Do I have furniture and fittings that need to be insured?  If you shoot on location, keep in mind that several venues (including churches and reception halls) will require that you provide a certificate of liability insurance before they allow you to step foot on the premises.  If you own a studio or have furniture or other property you use in your business, you will want to consider property damage insurance.  If you rent, you will want to look into renter’s insurance.

4.  If something were to happen, how much can I afford to cover myself before I look to insurance?   This is important because it will help you determine what kind of deductible is right for you.  The higher your deductible (i.e, the more you will be responsible for paying before insurance kicks in), the lower your premiums will be and vice versa.

5. Do I have employees?

6. Do I need to still have an income if I am sick or injured and cannot work?

Once you have answered the above questions about your business, you can determine what types of coverage is right for you and in what amounts.  The insurance coverages I recommend that professional photographers consider are:

1. Errors and Omissions (also known as Professional Liability)

2. Fire and Casualty and other property insurance

3. Equipment Insurance

4. Commercial General Liability

5. Automobile Liability

6. Worker’s Compensation

YIKES! That is A LOT of insurance, right? It is. And it may be that some of it is not appropriate for your business. You may be able to get by with only a couple of these.

So, why so many and what do they cover?  

ERRORS and OMISSIONS:

Errors and Omissions insurance is what will protect you if — no, WHEN — you make a mistake or a client perceives you as having made an error. It WILL happen, eventually. How many times have you shown up for a session and realized you forgot to charge your battery? Or you forgot your memory cards? Or you simply forgot the session altogether? Okay, maybe I’m the only one who can be so scatterbrained that all those things have happened to me. But, what about a situation where your memory card is corrupt and you don’t know until after the session? What if your computer crashes and you lose all of your files before you have a chance to make a backup? All of these nightmarish situations are very common and very real. And, if you have a client who is not the understanding type, or if you photographed a wedding that cannot be re-created, you may be facing some legal troubles. Errors & Omissions Insurance will cover you in such situations.

This insurance will also typically cover you for losses arising from copyright infringement, claims of false advertising, invasion of privacy claims, etc. But be sure to read the policy carefully as many will exclude intentional acts and fraud.

 EQUIPMENT INSURANCE:

Obviously, this insurance covers your equipment — your camera, your lenses, your computers, your iPads, your strobes, your beauty dishes and all that other equipment you purchased at the last WPPI Trade Show when you were convinced that you needed everything on the showroom floor to run your senior portrait studio (or maybe that was just me again?).  We all know how expensive our gear is.  Can you afford to replace your $5,000 DSLR if you drop it in the lake during an engagement session in a canoe?  Can you afford to replace your $20,000 worth of lighting equipment when it is stolen out of your commercial studio or your $30,000 Hassleblad?  Chances are, you cannot.

Make a list of what you have, how much it would cost to replace and then INSURE IT!  Pay attention to those deductibles though.  You don’t want to be surprised when your new DSLR is stolen to learn that your deductible is $5,000.

 COMMERCIAL GENERAL LIABILITY:

This is a biggie and is so important that if you do not have a CGL policy, you need to put your camera away and not take one more photograph until you have secured one.   A CGL policy is going to give you protection in the event you cause damage or injury to persons or property, including medical costs.  It will cover your attorney’s fees and court costs if you are sued.   This is the insurance that will not only save your business but could also save your home, your savings and your livelihood.

“Wow, what a drama queen!” you may be saying.  Well, let’s see about that:   so, there you are photographing your first wedding.  It’s just you and your assistant.  You are Jane Doe Photography, sole proprietor.  You set up your light stand in the reception hall in a location where it is sure to light up the dance floor.  It’s sort of in the way but it has a huge soft box attached to it and you are confident that “nobody can miss it.”  That confidence is shattered when Uncle Bob, who has had one too many glasses of champagne, line dances right into your light stand, knocking himself to the floor and your lights land on your head, knocking him out cold.  When he comes to, he seems pretty jovial and insists that he is fine and you leave the wedding feeling pretty sure that disaster was averted.  What you don’t know is that the 1-800-SHEISTER, the local TV lawyer was a guest at the wedding and cornered Uncle Bob after the reception and convinced him that he not only has permanent head injuries, he is has unbearable pain and suffering and severe emotional distress.  And, he let Uncle Bob know that you just inherited some money from your parents which allowed you to quit that dull accounting career and start your own photography business that has been your dream for years.  CHA CHING.  

Stop reading and buy a general liability insurance policy.  Now.  I suggest a minimum limit of $1 Million to $2 Million with a deductible that you can handle. On a side note, being incorporated will help save your family inheritance in this situation but you still need the insurance to save your business. (For more information on why you should incorporate, see Kirsten’s article at (http://www.legalphotopro.com/2013/03/08/protection-from-swinging-violinists-and-other-dangers-incorporating-your-photography-business/)

FIRE AND CASUALTY INSURANCE/OTHER PROPERTY INSURANCE

 If you own or rent a studio or if you rent equipment or have furniture, fittings and other property that needs to be insured against loss or damage, insurance covering losses caused by fire or other casualty may be appropriate.  If you lease your studio space, check your lease to see who is required to keep the building insured.  While that is normally a Landlord’s obligation, your responsibility in this regard will be governed by the terms of your lease.  Also, if you rent equipment regularly, it is essential that you have insurance covering loss or damage to the equipment.

 AUTOMOBILE INSURANCE

If you use a car for your business be sure that your personal car insurance will cover business use of your vehicle.  If you use multiple cars, a commercial automobile policy might be appropriate.  Also, if you have an employee who drives his or her own car for business purposes or if you rent cars when traveling for business, you should look into a Hired/Non-Owned Automobile Liability policy.

WORKER’S COMPENSATION

If you have employees, you will need to comply with your state law regarding worker’s compensation insurance.   Each state has its own rules and requirements on this so be sure you check your state’s laws.  Most states have a Board of Worker’s Compensation website where you can get the information you need.

DISABILITY/HEALTH INSURANCE

 If you work for yourself, it is tempting to forgo health and disability insurance and the costs associated with the same.  However, your health is vitally important to the successful operation of your business.   If you cannot work, you cannot earn an income.  If you suffer a serious injury and must be off of work for a long period of time, who will pay your bills?  (no, that duck won’t actually pay – but the company he works for, or another insurance company of your choice, will IF you buy one of their policies).

So, where do you find the insurance you need and how much is it going to cost you?  First, if you are a member of the Professional Photographers of America, you have some equipment coverage there.  However, understand that there is a deductible that comes with that and also some limits with which you should be familiar.  You can also opt in to the PPA’s indemnity insurance (which is similar to the Errors and Omissions policy described above).  I personally had to look to that coverage this year when an external hard drive failed.  They paid to have my drive shipped to Drive Savers.   Beyond that initial layer of coverage for PPA members, you will need to shop around.  I called my local insurance agent friend who did the shopping for me and found me a policy of equipment coverage, CGL coverage with high limits and property insurance covering my studio for a decent amount (I pay a little less than $500 per year for my protection).  What I have may not be right for all of you.  Most companies will give you a quote online.  Google “best insurance for photographers”, ask other pros who they use and start shopping!

The thing about insurance is that you won’t be glad you have it until you are thanking your lucky stars that you have it!