Insurance for an upholstery workshop

Business Hub · Money & Finance

What we carry, and how it grew

Worth setting out plainly, because the shape of it changed as the business did.

We started with £1 million public liability. That is the standard starting point and it was fine for domestic work out of a workshop.

Then a holiday park contract required £5 million. Large operators run approved contractor lists and set their own minimum, and £1m or £2m will not get you on one. That was not a choice — it was the price of the work.

Teaching meant adding more again. Students on the premises, using machines and sharp tools, is a different risk from me working alone, and the policy had to reflect it.

Tools are insured in the workshop and on site, everything from sewing machines to staple guns. On-site cover matters as soon as any of your work happens away from the bench.

Three upgrades in the life of one business. Which is really the point of this article: the cover you bought when you started stops matching the business you have.

None of this is insurance advice — I am an upholsterer, not a broker, and the rules and names differ from country to country. Treat it as a list of things to ask about.

Public liability, and what it does not cover

Public liability covers injury to other people, and damage to other people's property, arising out of your business. A customer trips over a trailing lead in your workshop. You drop a sofa through their bay window on the way in.

Here is the part that catches people.

Most public liability policies exclude property in your care, custody and control.

Read that against what an upholstery workshop actually is: a building containing several thousand pounds' worth of other people's furniture, all of it in your care, custody and control, most of it irreplaceable.

If your workshop floods, or burns, or is broken into, public liability will not pay for your customers' sofas. That is not the policy failing. It is the policy working exactly as written, and it is the single biggest gap in this trade.

The cover nobody asks for by name

What you need for that is a separate thing, usually sold as goods in trust, customers' goods, or bailee cover. Different insurers call it different things, which is part of why people miss it.

Ask three questions about it:

1. What is the limit? Add up what is genuinely in your workshop on a busy week, including anything waiting to be collected. Most people underestimate this badly. Three sofas and a suite is a serious number.
2. Does it cover goods in transit? You collect and deliver. Furniture on the back of the van is still your responsibility and is not always included.
3. Does it cover goods at the customer's premises? If you work on site — holiday parks, venues, heritage properties — the piece never enters your workshop but is still in your hands.

This is also where a written condition report earns its keep. If there is ever an argument about whether damage was already there, a signed record made before work started is the difference between a conversation and a claim. There is a printable one in the workshop forms.

Product liability

Usually bundled with public liability, and worth understanding separately for this trade.

Product liability covers harm caused by what you have supplied. For an upholsterer that mostly means one thing: fire. If a piece you recovered is implicated in a fire, the question of what you fitted and whether it complied will be asked, and it will be asked of you.

Two things follow.

Keep the certificates. Every foam, every cloth, every wadding, filed against the job. A policy will not help you evidence compliance — only your records will.

And a policy is unlikely to help at all if you knowingly worked outside the specification. That is one of the reasons I turned down the 76-chair contract: being told to do it that way is not a defence, and I would not want to test whether my insurer agreed.

Employers' liability

In the UK this is a legal requirement the moment you employ anyone, with a statutory minimum of £5 million. Most policies are written at £10m.

The trap is who counts as employed. Casual help, a friend who comes in on Saturdays, someone on a trial, and in some circumstances family members can all bring the obligation into play. It is not only about people on a formal contract.

If you take on an apprentice, a student on placement, or anyone at all who works under your direction, ask the question before they start rather than after.

Employment rules vary enormously by country. This is one to check locally rather than assume.

Tools, equipment and the van

Straightforward in principle and full of exclusions in practice.

Insure the tools for what it would cost to replace them, and be honest about the total — machines, compressor, hand tools, the lot. It adds up faster than most people think.

Then ask about on-site and in-transit cover, which is separate from workshop cover on many policies. If you work at holiday parks or customers' premises, or keep a machine in the van as I do, this is not optional.

And ask specifically about tools left in a vehicle overnight. A great many policies exclude this outright, or require the van to be in a locked garage, or cap it at a low figure. Trades discover this after a break-in rather than before. If your van is parked on the road with a machine in it, find out tonight what your policy actually says.

Two that get overlooked

Business interruption. If a fire or flood stops you working for three months, your income stops with it while the overheads carry on. Cover for lost earnings is the difference between a bad year and the end of the business. Ask what it would actually pay and for how long.

Vehicle work. If you do campervan or vehicle trimming and customers' vehicles come to you — or you drive them at all, even a few yards to reposition them — check whether that is covered. Working on somebody's vehicle and being responsible for somebody's vehicle are different things to an insurer, and standard workshop cover may not extend to it.

Tell them everything

The most important habit is disclosure, because non-disclosure is how policies fail at exactly the moment you need them.

Tell your insurer, in writing:

• What proportion of your work is contract or commercial rather than domestic
• That you work at customers' premises, if you do
• That you teach or take students, if you do
• That you handle vehicles, if you do
• That you store customers' goods, and roughly how much
• What machinery is on the premises
• Anything at all that has changed since the policy was written

An insurer who knows all of that and prices for it will pay. An insurer who finds out at claim stage may not.

Review it every year

The £1m to £5m story is the whole argument for this.

Nothing about our insurance was wrong when we bought it. It simply stopped describing the business, because the business changed — contract work arrived, then teaching, then on-site work and vehicles.

Put a reminder in the diary for the same week every year and read the schedule properly rather than renewing on autopilot. Ten minutes, once a year, on the document that decides whether one bad day ends the business.

The short version

If you take only two things from this:

Public liability probably does not cover your customers' furniture. Find out today whether you have goods in trust cover and what the limit is.

Tell your insurer everything you do. Every article in this Business Hub about growing into new work — holiday parks, teaching, commercial clients — is also a reason to ring your broker before you start.