Folksy Ltd

Insurance & Money

(Twinkle Star Designs) #1

Hiya, even though I’ve been making jewellery for about a year, so far I’ve only sold it to friends and family. I’m now in the process of doing my facebook and folksy page and and have a couple of meetings arranged at local shops to discuss selling my products. I hope to have a go at a couple of craft fairs this year as well so because of this I’m wondering should I be getting insurance and if so,what sort and does anyone have any suggestions of where to get it?
Also, do you think it would be useful to have a separate paypal account and bank account at this stage so that I can keep my personal money separate from my business money?
Thanks, Helen x

(Deborah Jones) #2

Hi Helen,
With regard to having separate accounts with Paypal etc , yes I would - it doesn’t cost anything and makes things so much simpler for accounting and tax return purposes.
If you haven’t already you need to let the inland revenue know that you are trading, even if you are not making any money- they need to know from the start.
Insurance -some fairs insist that you have your own personal and product liability insurance , I have seen it said that it is the law that you have to have it , but I’m not sure if that is accurate. I am insured with G M Imber it costs around £50 pa, but there are quite a few companies offering craft policies.

(Sasha Garrett) #3

I have separate paypal and bank accounts for my jewellery business, it makes it easier at the end of the tax year when I double check everything before submitting my tax return as I don’t have to sort out personal expenditures from work ones.
Some craft fairs require liability insurance (but not all) and if you are leaving stock with shops you might want to look into a policy with stock cover. You would need to do the maths as to how much it is going to cost you and if you think it is worth it. There has been another forum thread on insurance companies/ policies which might be worth checking out (sorry I can’t currently find it for you).
Good luck

(Samantha Stanley) #4

Hi Twinkle Star! This is my field, having worked in the insurance industry and having some vocational qualifications in the field, plus a law degree. The short answer is

  1. Do the shops/fairs require you to have insurance? If so, what type of insurance do they need you to have?

  2. Is it more economical to insure and claim for your losses, or to bear the cost of any losses yourself.

I am not currently insured because I don’t sell at craft fairs or supply to shops and if something I send is lost in the post (special delivery comes with it’s own insurance) and don’t use special delivery the main cost to me is my labour and not the materials, so I prefer to put that down to experience rather than add an extra few pounds to my costs. So far all of the items I have posted have arrived, so I’m happy to accept that something might go missing at some point and refund the customer.

I would also add that it is extremely important to check the terms of your insurance contract before you take it out to make sure that the items you sell are not excluded, the venues you are selling at are not excluded and the sum covered is sufficient to cover your stock. You might also want to consider whether or not your items are covered while in transit. Some types of items, like jewellery, can be subject to exclusions and have cover limited to a certain amount. Also a nominal cost to you personally, or excess, may be applied to any claim you make. This is usually £50 upwards.

There is a lot more information relating to this topic, so if you need more detail you should contact the Citizens Advice Bureau, who will be able to give you as much advice as you need,

Love Sam x

(Christine Shephard) #5

I’ve had PPL insurance from day 1 - mainly because I do craft fairs and markets, and they usually insist on it - but also for my own peace of mind should anything happen to anyone in the course of my business. It’s relatively inexpensive - I’m a member of a-n (the artist’s network) and get free PPL with my annual subscription, but you can get simple PPL policies from many companies.

It’s especially important if your products could cause injury, but it also covers you against accidents and injury to the public at fairs, caused by your table/display/products etc - accidents can and do happen!

PPL insurance doesn’t cover your stock (whether on display, in shops or in transit) but you can get cover if you think it’s worth it. Postage losses are usually covered by the carrier, as long as you use the correct service, although I know jewellery is often excluded. It’s always best to check the exact terms of cover with the insurance provider before you take out the policy.

Separate bank and paypal accounts are probably a good idea - I’ve never bothered to set up separate ones, but I know I should. I do keep detailed records of my business transactions, so it’s not been a problem, but it’s something I should look at in the new tax year. Obviously, if you are trading as a limited company rather than a sole trader, you will have to keep separate accounts.

(Liz Clark) #6

I’m insured through Ian Wallace which is for Crafters. It means both myself and my items are insured. I would recommend that any insurance you take out that you read the small print and ensure it covers you for your own needs.

As for bank account, I don’t have a separate one. I don’t have a huge turnover at all, so it is easy for me to keep track of my business affairs (I note it all down using Excel). If you have a reasonable sized turnover you may need a separate account set up, but it will need to be a Business one with the bank and these are subject to fees. Some banks will give free banking for a fixed period for new customers.

(Rosesworkshop) #7

I’m a member of the Federation of Small Businesses. They have lots of benefits and member discounts, including FREE business banking. Take a look:

(Twinkle Star Designs) #8

Thanks everyone, I’ve read through all your responses and it’s all really helpful information so I’m currently sat here writing my action plan list! I’m going to contact a couple of insurance companies tomorrow and think that I will be looking at getting product and liability insurance but probably not stock at this stage.
I’ve just opened a new bank account (unbelievably quick and easy to do!) and am now looking at opening a new paypal account but am just getting a bit confused. By the looks of it Folksy requires me to have a business paypal account rather than a personal account. So…would it make more sense to add a business account to my existing paypal (assigned to my personal email address) - it does say you can have 1 personal account and 1 business account. Or… would it be better to sign up as a totally new customer? It’s just that I do now have a separate business email address and obviously now there is a new bank account.

(Deborah Jones) #9

if you have a business Paypal with it’s own email - linked to Folksy , then any Folksy correspondence will be kept separate from personal , which makes it easier to keep tabs on orders and queries.

(Twinkle Star Designs) #10

Yes that makes sense, as long as I make sure I’m adding my business email address it should avoid any confusion. I had no idea there would be so many steps to getting going with this but I suppose it’s best to do it all the right way from the beginning if I’m going to have a proper shot at running my own business! I’m learning so much and I’m thrilled with how helpful the Folksy forum users are.
Thank you :smile: x

(Christine Shephard) #11

With regards to Insurance, if you’re working from home or storing stock there, you should let your home insurance company know about it. Some do cover a small amount of stock, others don’t, but it can invalidate your house insurance if you don’t tell them you’re running a business from home. Mine doesn’t cover business equipment, materials or stock (I have too much!), so I have a separate policy for that.

The same applies to car insurance if you use your car for business purposes (e.g. craft fairs, delivering stock etc), so best to check with them too. I added ‘own business use’ to mine for practically nothing.

(Twinkle Star Designs) #12

Thanks for that, I will bear it in mind about the home insurance. I don’t drive so car insurance not an issue - although I think I might have to consider learning to drive in order to do craft fairs as I think I would struggle by bus! :bus:

(Morria Jewellery) #13

Hi, out of interest which insurance company are you with for your home insurance? I had to change insurers when I started working from home as they wouldn’t cover me, I now pay what I think is far too much as they class making jewellery as “manufacturing”. Many thanks

(Christine Shephard) #14

I’m with Aviva. Although they couldn’t cover my business stock etc, they seem happy to carry on with the normal home insurance.