Monday, September 23, 2013

Update on My Pursuit of Business Insurance

My husband and I have recently learned that I will not be able to get a business insurance policy until after hurricane season is over which will pretty much prevent me from consigning jewelry at the galleries affiliated with the Louisiana and Mississippi guilds during the busy holiday shopping season.  I know that other people are willing to consign jewelry without it being insured but I am not comfortable taking that risk.

I've found this process to be very hard to maneuver.  It's no wonder why so many people who make and sell handmade items forgo insurance and end up taking great liability risks and simply hope for no theft or damage when they place items on consignment.

What has surprised me is how absolutely unfair many gallery sales agreements are.  I am not complaining about the percentage split, be it 50/50 or otherwise because I understand that their fee covers the services that they provide us.  I'm referring to the failure of some (but not all) galleries to offer any insurance on consigned items and their cavalier attitudes toward breakage and how much risk artists should be forced to assume.  When a gallery or shop decides to take no responsibility or "duty of care" for the items consigned, they have no incentive to actually take care of those items. 

I won't name the gallery but I recently learned that a very prominent gallery has the policy that when items are broken or damaged but the person who caused the damage is unknown, the gallery asks "the craftsmen to share the loss with us by accepting 30% of the retail value as compensation". Besides the obvious flaw in that reasoning (30% will often not even cover materials!), what makes that an incredibly unfair proposition is that given the gallery's normal 60/40 split, this means that the artist is expected to accept 50% of what he or she would have originally made on the item.  This is hardly a fair share of the loss. 

I would also like to point out that when they know who has broken or damaged an item, their policy is to ask the customer "to pay for 60% of the retail price".  The customer is asked to pay 60% of the retail price--does that mean that they are not required to pay?  The wording is not clear.  Have you ever seen a retail store accept 60% of the retail price when an item is broken?  I have not but I have seen a lot of "You break it, you've bought it" signs in boutiques and stores.  It is apparently acceptable to charge full price for broken factory-made items (purchased by the store at wholesale) but only acceptable to charge 60% when the item was handmade by an independent artist.  Could any of my readers explain that logic to me because I don't understand it at all.


  1. Susan, this seems so wrong on so many levels! We don't have a named storm out there brewing, which is usually why getting insurance is put on hold. But not to be able to get insurance at all during the hurricane season is so, so wrong. It just doesn't make sense! And for galleries and stores to absolve themselves of any responsibility toward work that is entrusted to them is beyond comprehension. I think that their covering theft or breakage should be part of the cost of their doing business. Shame on them. These things are enough to make one heartsick! I would hate to work with any store or gallery that took this approach. Unfortunately, one probably doesn't have much choice. Best of luck on getting this conundrum sorted out. A bit infuriating for sure.

    1. I really do think that insuring consigned items should be considered a part of the gallery's costs but this is what the gallery said, "Many of our craftsmen just treat it as part of the cost of doing business if damage occurs.". I'm not sure why the onus should be on the artist. Grr... I know that I need business insurance for a long list of reasons but the fact that I'm locked out until 2014 is maddening!
      Thank you so much for wishing me luck; I'm going to need it. :)