business insurance
March 11, 2008 – 5:00 amBusiness Insurance
Everyone has an opinion on the value of insurance. Personally, I wouldn’t work without business liability insurance. If you work in a studio it will be required. If you strictly work on location then you’re taking chances without it. Take, for example, the wedding photographer:
* Will the venue (church, reception hall) allow you to work there without a certificate of insurance?
* If granny trips over your camera bag and gets injured are you liable?
* What if (heaven forbid) your storage card goes bad and all the photos are lost. The couple threatens to sue. What do you do?
Any of these things can ruin a young business. Even if you aren’t found liable you could go broke defending against the accusations. Wouldn’t you rather have an insurance agency dealing with everything? Business liability insurance is relatively inexpensive for what it provides.
Let me give you a real life example of what could go unexpectedly wrong. A commercial photographer was shooting at a day care center in the basement of a large office building. Everything was great and working wonderfully but he failed to notice that one of his strobe lights was too near a ceiling sprinkler. The heat from the modeling lamp triggered the sprinkler system. And since it was in the basement, the whole floor and the floor above had their sprinklers go off, too. Many offices were water damaged because his light was in the wrong place. Imagine the insurance claim. It’s just not worth taking a chance without it.
Check with professional photo organizations like PPA, WPPI, ASMP and others to see if they have any partnerships or deals with insurance companies.
Another good thing to do is to get a business rider on your auto insurance. This costs very little and covers you when using your automobile for work purposes.
I’m going to give a quick mention of business structures here, also, since they are related to liability. In the beginning of your company you will probably be a ’sole proprietor’. That means you are solely responsible for your company and the resultant liabilities. By setting up a corporation of some sort you can gain protections for your personal property. In the case of a problem or dispute the corporate assets may be at risk but your personal assets are afforded more protection. In other words, if you’re a corporation and get sued, you may lose your company but you won’t lose your house.
The easiest and least expensive corporate-type structure to set up is an LLC (Limited Liability Company). This can be set up by just one person and provides some of the protections stated above. From there, you move up to an S Corp or a C Corp and these involve more expense and complication (but provide even more protection). Here’s where I hit the default button and suggest speaking with a lawyer in order to get more information on what works best for you. Just like any other type of protection, the more you have to lose, the more protection you need. If you have a house and family then there’s more at risk than if you have nothing to lose. Do look and plan ahead, though.
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