Why is insurance a must for interior designers?
As an interior designer, your clients rely on your expertise to make their dream home and work spaces come to life. However, if there's a delay in the project or they're unsatisfied with the results, you could face a lawsuit. The right insurance can help cover financial and defense costs due to accidents, theft, and damages.
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6 insurance policies every interior designer should consider
These insurance policies protect against the most common risks and liabilities in the interior design industry.
General liability insurance
General liability insurance covers interior design businesses against legal costs from third-party injuries and property damage, such as a client who slips on an icy front step.
- Client slip-and-fall injuries
- Accidental damage to a client's property
- Advertising injuries, such as copyright infringement
Business owner's policy
Small interior design firms are often eligible for a business owner's policy, also called a BOP. This bundle includes both general liability coverage and commercial property insurance at a discount.
- Client bodily injuries
- Damaged personal property
- Stolen or damaged business property
Professional liability insurance
This policy covers legal costs related to professional negligence, such as a mistake in a design that leads to costly repairs. It's sometimes called errors and omissions insurance (E&O).
- Design defects
- Missed deadlines
- Breach of contract
Workers' comp insurance
Most states require design businesses with employees to carry workers' compensation insurance. Personal health insurance won’t cover work-related injuries, which makes this policy crucial for sole proprietors too.
- Work-related medical expenses
- Disability benefits
- Lawsuits from workplace injuries
Cyber insurance
Cyber liability insurance helps interior design companies recover from costly cyberattacks and data breaches. It’s recommended for any business that handles credit cards or other personal info.
- Data breach investigations
- Fraud monitoring services
- Ransomware attacks
Commercial auto insurance
Most states require commercial auto insurance for vehicles owned by a business. This policy covers legal costs in the event of an accident involving an interior design professional's vehicle.
- Damage caused by your vehicle
- Legal costs from an accident
- Vehicle theft and vandalism
Interior design insurance costs
From our customer data, here's a quick look at average interior designer insurance costs:
General liability: $42 per month
Business owner's policy: $64 per month
Workers' compensation: $39 per month
Factors that can influence your design business premiums include:
- Your design services offered
- Number of employees
- Value of your business property
- Types of insurance products purchased
- Coverage limits and deductibles
- Claims history
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Common questions about business insurance for interior designers
Review answers to frequently asked questions (FAQs) about interior design business insurance and more.
Which coverage does an interior designer need to protect against mistakes on drawings and specifications?
A simple error in an interior design plan or drawing could potentially lead to hefty revisions or renovations. A large redo of a project could cause significant financial loss to your client. Because of this, they could proceed with a lawsuit over the costly fixes made to remediate the error.
Professional liability insurance, sometimes called errors and omissions insurance or E&O insurance, helps protect you from lawsuits filed by clients over unsatisfactory work.
When a client sues over a mistake made by your business, professional liability coverage can help cover the cost of legal defense, including the cost of hiring a lawyer, up to your policy limit.
Do interior designers need both general liability and professional liability insurance?
Interior designers can benefit from having—and are sometimes required to carry—both general liability insurance and professional liability insurance. These policies protect interior design firms and small business owners from different kinds of third-party lawsuits, and you might need insurance for a license, lease, or contract.
Specifically, here's why you might need commercial general liability insurance:
- It defends against customer accidents, such as client suffering an injury or their property is damaged in an accident.
- You need a commercial lease, and have to show proof of general liability insurance before you can sign the contract.
- You need a business loan, and general liability insurance is part of the terms.
And here's why you might need an interior design professional liability insurance policy:
- It defends against accusations of professional negligence, such as a design defect that necessitates costly renovations.
- You need to sign a contract to work with a client, because they prefer insured businesses and may require professional liability insurance or other types of insurance as part of the contract.
- Your state requires it for a license. For example, architects and engineers often must carry professional liability insurance as part of their licensing requirements.
What other insurance coverage do interior decorators need?
In addition to the policies mentioned above, our agents recommend the following types of insurance:
- Commercial property insurance: This policy protects against the risks of owning or renting an office, storefront, or other business property. It covers property and financial losses from fires, storms, and burglaries.
- Inland marine insurance: Because commercial property insurance only covers items at your main business location, you'll likely need additional coverage for material samples and business equipment that travels to job sites.
Depending on the services your interior design business offers, you may also be recommended to carry:
- Installation floater insurance: This coverage protects movable property, such as materials, while it’s being installed during a project. This coverage is usually kept active until the materials are installed and put to their intended use, or the work is approved by the client.
- Products-completed operations coverage: Part of your general liability policy, products-completed operations coverage that protects you from customer lawsuits alleging property damage or injury due to your product or completed service.
