I’m just starting out in my photography business; do I need insurance?

February 27, 2020 • David McLeish

Shutterstock Royalty-free stock photo ID: 445094317

You might not expect to hear this from an insurance broker, but if you’re wondering whether you need insurance – maybe you don’t!

Many photographers, and most professional photographers, don’t need to wonder: they know, because they are told they must carry insurance. If you apply for a permit to shoot at a Provincial Park or rent gear from a rental house, they won’t issue your permit or release the gear until you provide proof of insurance. In these instances, insurance is a necessity.

If no one is requiring you to carry insurance, but you still think it would be prudent to have, below are some things to consider when deciding whether you need insurance.

What are your total assets?

Insurance is intended to protect you from catastrophic losses. A catastrophic loss is one that you couldn’t possibly recover from without insurance. If your total assets are a camera body and two lenses that altogether cost about $3,000 CAD, replacing them after a theft might be difficult, even painful, but not impossible—not catastrophic. You wouldn’t have to declare bankruptcy, for instance. If you can’t pay for their replacement out of pocket, maybe you put the purchase on a credit card and pay it off over the course of a few months. The interest payments would likely still be less than what you would pay in insurance premiums.

Once you start amassing some serious gear, however, you’ll need to start thinking about insurance. You probably don’t want to carry a $10K balance on a credit card. Perhaps you don’t have a credit card with a $10K limit. At a certain point, the cost of replacing all your assets becomes “catastrophic”. Knowing the replacement cost value of your total assets – and the impact that a worst-case-scenario would have on you or your business – will help you decide when (or at what point) you need insurance.

What are your liability exposures?

The idea of a “catastrophic loss” comes into sharper focus when talking about liability. Here, the values are not in the thousands but in the hundreds of thousands or even millions. Very few people can put a million dollars on a credit card.

If you injure someone with your car, your car insurance pays the damages. If you injure someone as a private citizen and they sue you for negligence, your home insurance may cover damages the courts award against you. But, what if you injure someone while you’re working? You’re not in a car, and your home insurance likely excludes claims arising from “business activities” (note: home insurance policies don’t distinguish between fledgling businesses vs. established businesses—if you’re getting paid to be there, you’re a business).

Liability coverage for your business activities may be obtained through Commercial General Liability (CGL). If you work in or with the public, or in places where you could conceivably cause bodily injury or property damage to third parties, you have a liability exposure and should consider getting CGL.

What are the deductibles?

Almost every insurance policy has a deductible. A typical commercial property deductible is around $500 to $1,000. A deductible is an amount you’re responsible for paying (for repairs or replacements) before the insurance policy will respond.

Maybe your worst-case-scenario is having your gear stolen while you’re backpacking in Thailand, and you’d be out $5,000. The insurance policy initially costs $500, and the deductible is $1,000. In the event of a total loss, the insurance policy would only save you out-of-pocket costs of $3,500 ($5,000 less the $1,000 deductible, less the $500 premium). Maybe you’d still consider that “catastrophic” and worthwhile insuring. At least: if you know going in what the deductibles are, you won’t be surprised by the actual expense of replacing your gear.

Remember that insurance is intended to cover catastrophic losses. Deductibles are related to this original intent. An insurance company is not a maintenance service you hire to fix every little dent and scratch. Insurance companies do not want to be involved in thousands of small claims, so they impose deductibles to limit the number of claims they have to handle. Check the deductibles before you buy a policy, and think about the deductibles when you are deciding whether or not you need insurance.

What do you expect to get from your insurance?

The biggest misconception people have about insurance comes from the idea of “getting your money’s worth”. If you think insurance is something that will save you money, or that you should come out ahead of the insurance company, you’re treating insurance like a coupon or a slot machine. Insurance is neither a coupon nor a slot machine!

Don’t pay for insurance expecting huge savings and big winnings. That’s not the point. Insurance is about transferring risk. If a risk to you is so great that it would prevent you from doing what you need to do to grow your business, then you should transfer that risk to an insurance company. Insurance is, essentially, a facilitator of business. It enables people to take certain business risks that – if left to their own devices – they would likely not take, for fear of the consequences.

There are many reasons to get insurance. “Buy as much insurance as you can afford!” is the common refrain from insurance brokerages. But it is also important to understand what insurance is for and how it can work for you, at whatever stage in your career you happen to be.

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So, is insurance right for you? After reading this post, if you think the answer is yes, Front Row’s photography insurance policy is certainly a good option.

Many Canadian photographers have come to recognize Front Row as the industry’s best coverage – and rely upon us to protect their valuable camera gear. In case a claim does occur, you can work with your broker to resolve the claim and get compensated for covered losses as quickly as possible.

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DISCLAIMER: Informational statements regarding insurance coverage are for general description purposes only. These statements do not amend, modify or supplement any insurance policy. Consult the actual policy or your broker for details regarding terms, conditions, coverage, exclusions, products, services and programs which may be available to you. Your eligibility for particular products and services is subject to the final determination of underwriting qualifications and acceptance by the insurance underwriting company providing such products or services. This website does not make any representations that coverage does or does not exist for any particular claim or loss, or type of claim or loss, under any policy. Whether coverage exists or does not exist for any particular claim or loss under any policy depends on the facts and circumstances involved in the claim or loss and all applicable policy wording.

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