Hi, After reading about the devastion last weekend at a show, I am thinking about buying the artist's insurance advertised on AFI, does anyone have it or other insurance. I'd like to know what your thoughts are. I worry about my stock, equipment, cargo trailer, kilns etc. when on the road and at home plus they tell me that it covers liability. Anyone have this company or others? Thanks in advance.
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When I asked ACT for a copy of the policy so that I could compare it to what I already had, they told me it was too long to send. When I sent a follow up email they never responded.
You're right. Thanks for catching this.
I want to clarify all the questions regarding how our ACT policy covers your business personal property. Coverage for your business personal property is called Inland Marine (IM). Inland Marine covers your supplies, equipment, and inventory...anything you use to run your business. It doesn't cover retail cost for anything but rather retail cost minus any depreciation. This is call an Actual Cash Value (ACV) policy. So on a tent, for example, it would cover the cost of a new tent minus any depreciation on that tent...depending on how old the tent was. That is how all insurance policies respond to an IM claim unless you have a policy that is for replacement value instead of ACV. Replacement cost coverage is a lot more expensive. For your actual product, the coverage is similar. The IM coverage will not pay retail cost for your product. Rather it will pay for the supplies or materials you need to recreate your work. The only way to get retail coverage is to actually schedule all your products specifically on the policy, and many times an appraiser is needed for such coverage. Those types of policies can be very expensive. Dinah, we have been able to condense our sample policies, so we are able to email those now. So if anyone would like to see a sample policy, just send me an email at info@actinspro.com. I hope this answers all questions and concerns about how your business personal property is covered through our ACT policy. For more information, please visit our website at www.actinspro.com. Thank you!!
I just want to restate to see if I have a clear understanding. Picking my medium, pottery. If I have been doing shows for a few years and the tent and displays cost $1500, misc items (cash register etc..) of say $500 and 300 pieces of pottery at an average $40 for a total inventory of $12,000. If a storm blows through and completely destroys my booth and everything in it, my business losses are $14,000 plus the cost of that show minus any receipts prior to the storm.
From your description, the tent and misc items are likely to be depreciated to next to nothing since they are three plus years old and the inventory is going to be paid on cost of the clay and glaze of about $500. (a ton of clay and few gallons of glaze materials).
Not sure about deductible but it sounds like in my case, since the vast majority of the cost to produce pottery is in labor and hard cost (studio, tools, equipment etc.), this insurance would not be of any value to me, right? I do get that some of that inventory loss is negated by not incurring the cost associated with selling it but that may only negate about 20%. If I also read it correctly this applies to booths around me that may make a claim that my booth caused direct damage to theirs and once the policy pays a small fraction their actual loss, they likely will then sue me for the balance.
Do you sell a policy that covers all of my loss and any third party that has a legitimate claim against me in a show situation? Since labor and fixed cost is the largest factor for many of us, is there a policy that does include that?
Stephen...actually for the scenario you mentioned, the booths around you would fall under the general liability coverage. So if your booth were to fall over and cause damage to someone else's property, the liability coverage limits would apply. The question concerning the cost of labor does get asked a lot, but unfortunately I can't give a definitive answer about coverage for that because we are only the agent for this policy. The amount that is reimbursed for losses is determined by the carrier's adjuster. I can say that we have had claims in the past, and we haven't had any complaints as to how the claims were paid out by Great American Insurance. The reason for an insurance policy is to make you complete after you suffer a loss. Insurance policies are not intended to make a profit for the insured, so retail cost coverage is a rarity in insurance policies. I completely understand the concerns surrounding this discussion, and I hope I have clarified things for you. Please let me know if you have further questions or comments. Thank you!
Thanks for your reply Valerie,
I am not trying to be difficult and I must be missing something. By my calculations I could easily end up with a few hundred dollar check after my booth blew away if I was covered without labor and fixed cost allowances. I do get that insurance is not about profit and I was asking specifically about labor and fixed cost, not profit. I am sorry that by putting the retail cost of the inventory into my example it blurred that distinction but yes I understand this, to a point (Its actually hard for an artist to make what would be considered a profit beyond reasonable labor and fixed cost).
To make an art vendor complete after suffering a total loss of a booth and all of their inventory would I assume be putting that artist back in the same financial situation as they were immediately prior to the storm, minus deductibles.
In my opinion though that would have to include labor and fixed cost allowances, since for most of us as that is the bulk of the loss. It can take weeks/months to produce that inventory and that labor and fixed cost is part of the loss sustained. As an agent for this policy can't you get a definitive answer to this question?
Obviously every claim is different but without any reimbursement beyond raw materials, together with depreciation, my claim to be a mere fraction of my actual loss (excluding profit) and I would think that would be the case for a large number of artist.
I assume buy/sell booth owners in other venues are able to get coverage for their wholesale purchase price of the merchandise they sell. In our world the purchase price is labor and hard cost together with raw materials.
Stephen, would it help if I were to send you a sample copy of the policy so you can look over the coverage? If you would like me to do that, just send an email to Valerie@veracityins.com.
That sounds great, thanks.
Check out RHI also. Costs more, covers more. Chris Alexander is really helpful.
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