Appraiser Insurance

What Type of Appraiser Insurance Do I Need?

What Does Appraiser Insurance Cover?

You’re an expert when it comes to assessing an item’s worth. You study it with meticulous care, taking note of every detail. You research market trends and assign value to them. You run your business like clockwork, and your clients are often delighted when they learn their item is worth more than they expected.

Of course, there’s the other side of the coin. You never know when you may encounter a disgruntled client who isn’t happy or doesn’t agree with your appraisal. Even when you do your job by the book, you may experience an unexpected turn of events resulting in an insurance claim.

That’s why insurance for appraisers is so crucial.

There are risks with every type of small business. Even the most diligent business owner can make a mistake, so you need to be prepared. Depending on the nature of your business, you may need more than one policy. We can help you determine the type of coverage you may want to consider for your appraisal business.

Here are two types of policies we typically recommend:

General Liability Insurance

Jewelry, coins, china, musical instruments, and artwork. These may be some of the treasured items you specialize in and assess daily. Items like these can be worth a lot of money. As an appraiser with valuable items in your possession, you’re likely at risk for theft, damage, or loss.

Sometimes your clients bring you personal items to be appraised for insurance purposes. Once the items are in your possession, it makes sense that you likely need insurance too. You can help protect yourself and your business from potential loss with general liability insurance.

Imagine a situation like this. A client brings you a vintage Fender Stratocaster guitar that he received as part of an inheritance. It’s in pristine condition and may be worth over $25,000. You need to keep it in your office for several days so you can inspect it and do some research.

While reaching for a book on a shelf, you accidentally knock over a stack of heavy binders, and they fall on the guitar, causing a significant dent in the instrument’s body. It’s an unfortunate accident, but the damage is done — and you are financially responsible for it.

Without insurance, the cost of that damaged guitar would come out of your own pocket. And that may leave you singing the blues. Property damage claims for small businesses can be significant. The average claim is a hefty $30,000.

But if you had general liability insurance, the cost of the damaged guitar could be covered by your policy, up to its limits. With a GL policy, you could be financially covered for a variety of mishaps, including third-party accidents, and third party property damage and bodily injury.

Here’s what general liability insurance usually covers:

• Third-party bodily injury
• Third-party property damage
• Personal and advertising injury
• Claims arising from product defects
• Medical expenses
• And more

GL insurance usually doesn’t cover:

• Damage to your own property
• Professional services
• Workers compensation or injury to your employees
• Damage to your work
• Automobiles while in business use
• Expected or intentional injury or damage
• And more

Business Personal Property Insurance

As an appraiser, you worry about theft or damage when it comes to your clients’ valuable property. But what about your personal property?

Let’s return to your office mishap. What if — in addition to the falling binders — the entire shelf came crashing down, damaging your desk and filing cabinet? Now you have the financial burden of replacing your office furniture.

That’s where business personal property insurance comes in. When you add it to your appraisal insurance, it can help with the cost of replacing those essential office items.

Business personal property (BPP) insurance typically covers the equipment, furniture, fixtures, and inventory you own, use, or rent inside your workspace.

For a business owner, business personal property insurance can help pay to replace office furniture, computers, cameras, or other essential equipment in the event they’re stolen, damaged, or destroyed.

A BPP policy can cover financial claims involving:

• Theft of business property
• Damage to business property
• Loss of business property
• And more

For small business owners, stolen equipment or property damage can affect their daily operations. If someone steals your security camera, it creates a safety concern, putting your business and clients at risk. With business personal property coverage, the cost of your security camera could be covered, and you could return to running your business worry-free.

Why Do I Need Appraisal Insurance?

You never know when a good day may turn bad. Let’s say one of your apprentice appraisers overestimates the value of a piece of jewelry by several thousand dollars. If the error is later discovered, you could be at risk — and a claim could be filed against your business.

It’s not uncommon for a small business to be sued. According to the Small Business Administration, between 36%-53% of small businesses may encounter a lawsuit in a given year. And the legal costs for those small businesses could range anywhere from $3,000 to $150,000. Your small business likely can’t afford to take a hit like that.

When mistakes happen, appraiser insurance can help protect you financially if you find yourself involved in a lawsuit or having to pay a claim.

Peace of mind is just one reason to get coverage. Having appraisal insurance sends a message that your business is reputable. Your clients may feel more confident trusting you with their personal belongings. Obtaining insurance for appraisers is a great way to protect yourself while providing valuable services to your clients.