Running an interior design business is not risk free, so you should understand what you can do to protect yourself from the many potential risks. I am not an expert and this is not professional advice, but I hope to help you better understand some basics, but advise you to consult the real professionals. At The Designers Collaborative, we strive to educate our Members so we all thrive together.
Let’s break down Business Insurance as it pertains to interior designers. To start with, there is General Liability insurance and Professional Liability insurance.
General Liability will cover claims made by others including bodily harm, damage to property, or personal injury. This would include things like an installer falling off a ladder, breaking your client’s antique vase, or in your company advertisement accidentally using wording that is under copyright or trademark.
Professional Liability (also called Errors and Omissions or E&O insurance) will protect you if you get sued for not performing your services or if you make a mistake. It can (make sure you ask your agent) also provide coverage if you order the wrong items or the wrong amount for a design job. For example, let’s say you accidentally order 3 times as much wallpaper as you need, or mix up the item number and the sofa arrives in the wrong fabric. It would be considered your mistake, not the vendor’s or the freight company’s error. Professional Liability insurance won’t cover if the vendor or shipping company makes a mistake or causes any damages that might occur.
There are other insurances to consider as well like Self-Insured Workers Comp to consider. It is best to speak with an insurance agent about all your options. No one wants to think that they will need these insurances, so they too often get ignored by interior design professionals. But what if spending a few hundred dollars a year could save you thousands in the end?
You may be asking since insurance isn’t going to cover damages or other mishaps that happen fairly often what can you do to be prepared for those situations? I recommend a few things:
1- Pad your job costs and put that money aside for when things DO go wrong. Add 5-10% on the design fees and product costs. If your first thought is “I can’t do that. My clients won’t pay more”, you might need to do some money mindset work with a coach. I really think every entrepreneur could hugely benefit from money mindset work.
2- Expect that something will go wrong and remain calm. I feel it’s our job to shield our clients from undue stress and make the process fun and easy. When an issue comes up….handle it. Focus on the solution, not the problem and, if at all possible, take care of it without worrying the client. They don’t need to know the end table arrived with a scratch. What benefit could it be to inform them of this?
3- Have a good receiving warehouse that inspects everything when it arrives and has good repair people to call when things do arrive damaged.
4- Know that there are talented repair people who can fix just about any issue and make it look like new. It truly is incredible what they can do and unfortunately, newer designers who have not seen it firsthand are usually skeptical. Take it from a veteran, the repairs can be invisible and are usually the fastest and best option for furniture that arrived damaged.
5- The vendor is the one who will dictate what will happen when a mistake or damage occurs. If you don’t agree with their answer, the solution that you want should come out of your pocket. In some cases, a portion of the solution will come out of your pocket regardless because of additional freight costs or other expenses.
Things do go wrong, but if you’re prepared, it’s not a big deal. If you have not had any issues that have cost you out of pocket money yet, you have been lucky. Trust me, it’s not a question of if it will happen, but when. So be ready for it. You’ll be glad you planned ahead!
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