Are you prepared to handle the various disasters that can befall an artist both in the studio and when taking your work on the road?
Being a full-time, self-employed potter has taught me many things—if nothing else, to be prepared, plan for the worst, and hope for the best. This mentality led me to think that the flood that occurred in my studio wouldn’t impact my business much; after all, how much damage can a half inch of water do? Not a single pot or piece of equipment was lost, but 6 months later, we were still putting my studio back together. The inability to make new work during this time cost me tens of thousands of dollars and a hard lesson was learned.
I am in no way an insurance agent or an attorney, and the following information should not be considered legal advice. You should always seek private counsel regarding your own unique circumstances. I am speaking solely from my own experience recovering from a disaster in order to shed light on the grueling process.
The handwritten tally sheet I kept tacked to my studio wall and filled out based on work completed became my main source of evidence when my attorney and I generated the claim for my losses. Even though I knew how much work I could make in a given period of time, the insurance company had a difficult time believing that clay-smeared list. Now at the end of each day, I use a notebook to document that day’s labors. Images taken further document work, and materials receipts are dutifully organized by date to corroborate studio habits.
Lastly, and possibly the biggest lesson of all: insurance. Although I had general liability insurance, it was not the recommended business owner’s policy (BOP), which would have been beneficial.
Artists, specifically ceramic artists, have unique variables that are critical to assess to find a policy that helps you when needed. In order to have the correct insurance, one should consider a few factors. Does the insurance provider cater specifically to (ceramic) artists? How do they reimburse losses? Do they evaluate with the Actual Cash Value (ACV) or Replacement Cost Value (RCV)? Many insurance providers, including those who specifically sell policies to artists, determine value in the event of a loss on the ACV. This means that ceramic artists, whose materials are dirt cheap (literally), get next to nothing in the event of a loss of inventory as only material costs are reimbursed.
Seek out a policy that will reimburse you at the RCV or retail value. The caveat with such plans is that you need to be able to prove that you have sold a comparable item at the value you’re seeking as reimbursement within a prior time frame. Any item valued at over approximately $1500 per piece should be itemized with your agent in advance, otherwise that item may not be covered.
Other important questions to ask when shopping for a policy include: How does the insurance company require you to document a claim? Do they require you to have a detailed, photo-documented list for each item in your inventory before it’s turned into shards, or can you dig through the debris after the fact to calculate the loss?
It’s very important to be clear and honest when discussing your expectations for insurance coverage with your agent. Failure to specify exactly what you do could cost you a lot of money! For example, a ceramic artist who makes utilitarian vessels will be more expensive to insure than one who makes more sculptures due to the inherently higher risk to the consumer in the use of the products, as well as the higher rates of production; but if you don’t have the correct coverage for your work, you could be liable for all damages.
Did you know that your auto insurance policy likely doesn’t cover anything that isn’t permanently affixed to the vehicle? So, if you’re towing a trailer, unless you have specifically added coverage for the trailer and its contents, it generally isn’t considered part of the vehicle and won’t be covered.
Having gone through this major loss from flooding, I have upgraded my policy to include the following:
1. General aggregate liability coverage. Protects me if someone breaks a leg in my booth at a show or from liability when a tornado blows my canopy into a storefront, a patron, etc. Essentially any bad stuff that isn’t related to business property.
2. Inland marine coverage. Basically any kind of movable property. Covers my RCV inventory, display, canopy, etc. while off site at a show. Wreck the van? Covered. Tornado blows it all away? (Yes, this has happened to me, too). Covered.
3. RCV on my studio in the event of a fire/flood/tornado/etc. This includes all the mechanicals of the building—hot water heater, refrigerator, etc.
4. RCV on all tools, equipment, raw materials, furnishings, etc. related to the business in the event of a loss. Inform your agent of any equipment you have made yourself and ask what the best procedure is for assessing its value. Keep a running list, including any serial numbers and photo documentation of each item.
5. Loss of income policy. When catastrophe occurs, if I can prove that historically I made a certain amount prior, I’m covered!
6. RCV on all saleable goods onsite. Catastrophe strikes and I lost the entire inventory I was prepared to sell? Covered!
Aside from these main coverages, many commercial or business owner’s policies will come with a slew of other coverages as part of the package. A recent quote from my insurance provider for the above coverages came up with an annual premium of $2300. Definitely more expensive than the bottom of the barrel policies, but it is designed to actually help in the event of an incident.
For those who regularly have patrons, students, or other artists working on premises, you will need to increase the amounts and types of coverage you have to protect yourself from this increased liability.
It is very important that you regularly check in with your agent, especially if any major changes take place with your business or studio practices. Just received a contract for 20,000 mugs to be sold through an international catalog, or purchased a new piece of equipment? Better call your agent!
While for me, spending about $200 per month on insurance seems reasonable, for many, this much coverage is completely unnecessary. It is imperative you get the amount of coverage that you can afford and that makes you feel protected.
In the end, the flood was a hard lesson learned, but hopefully imparting my knowledge gained through this experience will help you know how to protect your artwork, your business, and yourself.
the author Sam Hitchman is a full-time ceramic artist, living in Cincinnati, Ohio, with 20 years of experience working in clay. He received his BFA from Miami University of Oxford, Ohio, in 2010.