Photography Business Insurance | How Well Do You Really Understand Your Policy?
Latest update: 6/18/18
Insurance: it’s everyone’s favorite topic, right?! Wrong, you say? Do you really understand your photography business insurance? It is important that you do, and that you don’t “back-burner” doing so. I know, and I agree that there are more fun things to talk about. But, invest the next 5 or so minutes reading this post. Then invest an hour sitting with your own insurance professional discussing your own photography business insurance. It could end up being one of the smartest hours you’ll invest in your business all year.
Let’s start with a series of basics as it relates to insurance needs of the professional photographer. While everyone’s policies can and do differ, it’s a safe bet that the basics we’ll cover are spot-on or very close for most individuals and businesses. In all cases, since your author is a professional photographer and not an insurance professional, you want to use this information as nothing more than motivation to call your own insurance agent. Schedule a meeting, with a goal that the meeting will leave you comfortable understanding your photography business insurance coverage, its limitations, your risks and exposure, and the costs involved.
When you have questions or, heaven forbid, a claim, you will be more than happy to have a local insurance professional, speaking to you not only as a real human being, but also as a friend and neighbor. If this matters to you as it does to me, shop locally and use a local insurance professional near you.
OK, on to some basics:
No. Your Homeowners Insurance Doesn’t Cut It
Your homeowners insurance policy is great for most things in your home. Don’t be fooled, into thinking that you’re covered if you are using your photo gear professionally (and here I define the term ‘professionally’ as ‘charging money’ for your photography services and products.) Most homeowners policies state that as soon as you use your photo equipment to earn any money, it becomes business property instead of personal property. At this time coverage likely ceases..either going away in its entirety, or, at best, it becomes dramatically reduced.
It’s plain and simple. If you use your gear and charge money to those using your service, you need a business insurance policy.
Business Insurance Policy Basics
Okay. So I need a business policy. What do I need to know?
A complete business insurance policy (not unlike your automobile insurance) discussion needs to address two separate areas of exposure: property and liability.
I.
Business property coverage:
Typical basic business property coverage is limited to covering “stationary property” at a “scheduled premises”. What does this mean? In photographer’s terms, think of a photo studio (the “scheduled premises”) that contains equipment to include your cameras, strobe lights, reflectors, soft boxes, backdrops, props, and the like (the “stationary property”).
Most business property coverage policies have a fair amount of exclusions, meaning coverage is not likely when it deals with water damage, weather-related issues, etc. For example, if you dropped your camera and lens into a puddle, lake, the ocean (and yes, collectively as a group we photographers have done it all) it would NOT be covered.
OK, this is making some sense, but it’s sounding like the more we delve into things the more we find out what IS NOT covered. Then, and this is important for us as photographers, what happens when you leave the studio or place that that your equipment is stored and drive down the road and do an outdoor session? The gear you take with you is still covered, isn’t it? Well, maybe not!!!
What do you do to have coverage for your gear when you are out on the road, as so many of us are so much of the time?
The answer lies in an Inland Marine Policy.
An Inland Marine Policy is intended for property that is not used at a “scheduled premises” but that moves around. Again, in photographer’s terms, that means just what it may sound like. You load your bags with your camera bodies, lenses, flashes, battery packs, reflectors, wireless triggers, stands, etc., toss them in the car, and drive somewhere to meet clients and do your photo shoot. With an Inland Marine policy, these items are now covered.
You will need to prepare a list of items you wish to have covered. You’ll likely be asked to include the make, model, and description of the item, along with its serial number and purchase price. It is important to keep this list updated with your carrier, too!
[For the curious, as I am, the term ‘Inland Marine’, originated centuries ago for covering goods being shipped across the seas (hence the ‘marine’ portion). As the Industrial Revolution later ensued, similar coverages were sought and required for inland industry, and the concept expanded to Inland Marine.]
There is a down side of Inland Marine coverage. In its most basic form, it covers not for replacement cost but (in many policies) rather for the least of the actual cash value of the property; the cost of reasonably restoring that property to its condition immediately prior to the loss; or the cost of replacing that property with substantially identical property. This means that your 2-year old 5D MkIII body and 70-200mm f/2.8 lens that together cost you $5,800 when you purchased it would be covered to the extent it is worth today, depreciated for wear-and-tear. Think of the value more like what you could have reasonably sold this equipment for just prior to the loss. Perhaps your insurance carrier would be looking at an actual value of maybe $2,500 (all values here are for example only). Then, too, of course you have to subtract your deductible, $500 for example. After this loss and filing your claim with your agent, you’d be handed a check for $2,000. Which is a far cry from what it is going to take to go buy new again.
Luckily there’s a solution. An Inland Marine policy can usually be upgraded for replacement cost coverage. (Phew!) Continuing with the above example scenario, the same camera and lens are now available at a lower price since when you first purchased, $4,500. Your insurance coverage now would pay you this, minus your deductible. Your check in hand would now be for $4,000, a far better situation to be in. The $500 deductible is an easy pill to swallow since you’re going to be sporting brand new equipment. Perhaps not overly important with lenses but quite a bonus with a wear-item like a camera body.
II.
Business liability coverage:
Every photographer is exposed to liability claims as well. General liability insurance provides coverage for damage to covered property of others as well as bodily injury to others for which you are legally responsible. The importance of this insurance coverage cannot be overstated.
The good news in all of this? All of the coverage options described above are affordable.
Do You (Perhaps Unknowingly) Have Redundant Insurance?
Talk about an example of when “less” is “more”! In the process of doing my research for this blog post, I learned something very important: as part of membership in a professional photographer’s association, I had innocently enough opted-in to receive their ‘free’ photo gear coverage. The kind of insurance described in I., Business Property Insurance, above. This free policy covered the first $15,000 of equipment, subject to (ever-increasing) deductibles, of course. If you have this coverage from your professional photographer association, or similar, there are two very important points to consider with this insurance. It’s important to find out if what applied to me applies to you, too.
1. Don’t be under the assumption that this free insurance coverage is enough. The particular plan I refer to covers only equipment, and only to $15,000. It DOES NOT cover liability in any way. That would be extra. They are hoping you will call and buy more from them. At which point, from what I understand, the first $15,000 of ‘free’ insurance coverage goes totally away. And at which point I suggest opting out of the free coverage and calling your local insurance professional for a complete photography business insurance coverage package. Why opt out?? Here’s why:
2. My primary insurance has a clause that states, in effect: “If there is other insurance we will pay only the excess over what you should have received from the other insurance…and we will pay the excess whether or not you can collect on the other insurance or not.” Think about what this means. And realize that YOUR insurance very likely has similar wording already in place. Heck, what happens when BOTH policies have the same wording? Reading this I immediately opted-out of my free insurance coverage as I rapidly realized that there was ZERO benefit for having it, since it addressed the very same first $15,000 of equipment I already had covered on my own business insurance policy. Opting out of receiving it means I no longer have to try to collect that first $15,000 from another company (which may have higher deductibles than my primary insurance) and isn’t serviced locally.
Do You Ever Offer to Bring a Client in Your Own Vehicle?
We do. On wedding day, especially after a first-look. We often head out to do artistic images around the area. Sometimes there’s a limo, but most of the time it is simpler and more convenient, with all our gear, to have the bride and groom get in our own vehicle and ride along with us. But, the insurance for our vehicle is our own PERSONAL insurance, and that moment when the client/s got inside it was, in the eyes of the insurance company, business use–very likely NOT covering you in the event something happens. The solution, thankfully, is simple.
You need to talk to your automobile insurer and explain this use. They know what to do, they have done this before. It’s not unlike the insurance policies they write for other professions. For example, real estate agents bringing a potential home buyer along in their vehicle to see a property. Your agent will likely be able to add language to your existing policy to cover this occasional business use as described..and at a very reasonable cost.
Do You Ever Hire Second-Shooters to Work With You?
When you bring in a second shooter to work with you, the very most common scenario is that they are functioning as a subcontractor. It is very likely that your own business liability insurance DOES NOT cover subcontractors. Rather, these folks are expected (and need to be required) to be covered by their own business liability insurance. (1) Do not assume that your insurance covers them, because it is beyond likely that it does. (2) Do not just assume that they have an in-effect business liability policy – rather, have their insurance provider send you over a copy of their policy. Even well-meaning folks may not realize that a policy has lapsed, or isn’t really a liability policy but rather just an equipment policy. Ask for the proof in writing. Why is all of this so this important? There are countless reasons, but for simplicity let’s say you hire in a second photographer, they leave a camera bag on the floor, then someone trips over it and gets hurt, breaking bones, etc. If your second has no insurance, the liability then falls to you. If the second was not your employee and otherwise are not directly listed on your business liability policy, it still falls to you but now you are NOT COVERED since it was them, not you that caused the mishap to occur. You’re on the hook for who knows how much in medical bills, let alone the possibility of a law suit.
Similarly, Do You Have Employees? Is It Just You, Solo? Or Does a Spouse or Partner Ever Work With You?
The answers to this matter greatly! Let’s say you own your photography business and later your spouse joins you, either casually or as your sometimes–, or always– second-shooter. Be careful!! They aren’t automatically covered in many circumstances. Always call your agent and ask. If your spouse is a legal part of your business, they likely are already covered, but again don’t ever assume!
And, of course, if you have employees, it’s a whole different thing and it can get at least somewhat complicated the moment that they start working for you. Among many other considerations you will likely need workman’s compensation insurance, too. Again, sit down and talk with your agent!
We love the advantage of dealing with a local agent, with whom you can sit and chat face-to-face. And if you think it costs more to have this advantage, please check very, very closely as you compare costs to national agencies.
Do You Ever Rent Equipment?
If yes, again read and know your policy well. You may need special coverage added to have rented equipment be protected by your insurance. Ask, ask, ask!
Unmanned Aircraft Systems (aka Drones)
Do you use a drone (unmanned aerial vehicle / quadcopter)? If yes, here is some really useful information. (This section updated May 1, 2017)
First, this article we wrote for the Professional Photographer Magazine blog of the Professional Photographers of America sets out some basic questions relative to hobby vs. business use.
As the above-linked article delineates, if your drone use is for business, there are two key things to point out right away:
1. You will need FAA Section 107 certification before using your drone for any non-hobby use.
and
2. You will not want to fly for one second for business without the proper endorsements to your business liability (and likely also property damage) insurance policies.
In 2015, when we first published this blog post, giving clear direction for liability insurance was really tough. First, the FAA had not at the time released the Section 107 rules for Small Unmanned Aircraft Systems (drones) and thus most insurance companies really didn’t know much about insuring these craft.
That’s all changed now. Having received my FAA sUAS Remote Pilot license earlier this year, and anxious to start incorporating drones in our wedding photography business, finding the right insurance was paramount. We needed great coverage and affordable rates.
Thanks to the work of my agent JoAnn at Clark Insurance (details in the summary section immediately following) a major carrier who’s already addressed drone coverage for small business use, we were able to craft a new business insurance package that, without a lot of hoops to jump through, readily includes drone insurance. If you want to know more about this coverage call 207.523.2228 and ask for JoAnn Martin. Compared to the cost of separate policies for business liability and property damage and then a separate rider for drone use, the new combined policy is very cost-effective.
Bottom line with drones: DO NOT fly a drone for business without your FAA Section 107 certification and DO NOT fly without proper business liability insurance. And, business means just about anything that is not 100% pure hobby use.
SUMMARY
Every policy has limits and exclusions. In addition to understanding what your photography business insurance policy covers, you should take time to understand what it does not. Like photography, which we always are saying to “leave it to a pro”, the same applies to insurance. It is a complex business so please use a local insurance professional to review your coverage – that’s why they are there.
Hopefully, that one-hour meeting with your agent is really sounding attractive at this point.
KEY POINT
With insurance, you are a thousand times better off to think AHEAD about if you are covered in a certain situation rather than hoping so, and rolling the dice later – only to find out you’re not. Write your agent a note describing the circumstance, and get their answer AHEAD OF TIME!
If you don’t have photography business insurance and you now know you should, make certain that the very next thing you do is to call your local insurance professional.
If you do have photography business insurance but are not sure it all aligns correctly with what’s described above, still call your agent immediately.
A sincere thank you to my insurance professionals at Clark Insurance in Portland, Maine for all the help in reviewing my thoughts and writings. If you feel you need a professional you can trust and count on, I could not recommend Clark Insurance any more highly. Give them a call at 207.523.2228 and ask for JoAnn Martin. Ask her anything related to your photography business insurance. We’d appreciate your mentioning that we sent you! (And, no, we don’t receive any compensation from Clark Insurance).
THIS! Is everything I needed! As an owner of a photography business, I understand the art, but not the business side as much! Thank you for the clarifications and I will definitely be using this information!