The Insurance Information Institute is not a dramatic organization. It publishes plain guidance for people buying insurance, and on the subject of running a business out of your house it says this: a homeowners policy may cover your business equipment, "but probably only to a maximum of $2,500 for business equipment in the home and $250 away from the premises," and it "usually doesn't cover business-related liability, for example, if a customer or supplier is injured on your property, at all" (Insurance Information Institute, Insuring Your Home Business).
Read that second clause again, because it is the whole article in one sentence. The policy on your house is not silent about your candle business. It has already decided.
The short version:
- Homeowners insurance caps business property at roughly $2,500 and generally excludes business liability entirely.
- General liability covers someone getting hurt around your operation. Product liability covers your product hurting someone after you've handed it over. Annual maker policies usually bundle both; cheap single-event policies often don't.
- Advertised 2026 entry pricing runs about $279/year for lower-risk makers, $515/year for handmade beauty, and $299/year for food. Single events start near $49.
- Amazon requires coverage within 30 days of a $10,000 sales month. Many juried craft fairs require a certificate before you can set up. Etsy publishes no requirement.
- Your premium is rated on annual sales and product category — which means the number depends on records you may not currently keep.
What each layer actually covers
Three different products get called "insurance" in maker forums, and they do not do the same job. Take Dana — a composite maker invented for this article, not a real customer — who makes soy candles in a converted garage, sells at four shows a year, and wholesales to two boutiques. Here is which policy answers the phone for each thing that could go wrong to her.
Four columns, in full: Homeowners is your existing home policy, with or without the property endorsement described below — that endorsement raises property limits only and never adds business liability. Event-only is a short single-show liability policy. Annual maker is a year-round policy carrying both general and product liability. BOP is a Business Owner's Policy.
Table: What each policy layer covers for a home-based handmade business
| What happens | Homeowners | Event-only | Annual maker | BOP |
|---|---|---|---|---|
| Customer trips on Dana's booth cable at a show | Excluded as business liability | Covered | Covered | Covered |
| A candle Dana sold last spring starts a house fire | Excluded | Often not covered | Covered | Covered |
| Dana's $1,800 wax melter is stolen from the garage | Up to ~$2,500, or ~$5,000–$10,000 with a property endorsement | No | Add-on only | Covered |
| A fire in Dana's wax-melting room stops production for six weeks | No | No | No | Covered as business interruption |
| A boutique demands proof of coverage before a purchase order | Not applicable | Usually insufficient | Yes | Yes |
The Institute lists the endorsement route as the cheapest of these: "For as little as $25 you can raise the policy limits from $2,500 to $5,000," with some carriers allowing increases up to $10,000 in $2,500 increments (III, Insuring Your Home-based Business). Notice what that buys — property, not liability. It is a useful $25. It is not the $25 that matters if the candle causes a fire.
The row worth staring at is the second one. Product liability is the coverage that survives the sale. General liability ends roughly where your booth ends; product liability follows the object into the buyer's living room and stays there for as long as the product exists. Insurance Canopy is explicit that on its crafter policies, product liability is offered on annual policies only — the 1-to-3-day event policy carries general liability without it (Insurance Canopy, Crafters Insurance). Makers who buy a $49 weekend policy to satisfy a show organizer and assume the products are covered too have bought the wrong half.
Five more terms make the rest of this readable, and every one of them shows up on a certificate you will eventually be asked for:
- BOP (Business Owner's Policy) — bundles liability with property and lost-income coverage. It is the only column above that pays you for the six weeks you could not produce.
- Per-occurrence limit — the most the policy pays for any single incident.
- Aggregate limit — the most it pays across the whole policy year. This is why $1M/$2M means one big claim or several smaller ones.
- Occurrence-form vs. claims-made — an occurrence policy responds to incidents that happened while it was in force, even if the claim arrives years later. A claims-made policy responds only while it is still active, unless you separately buy tail coverage. That difference is why event organizers reject claims-made certificates.
- Additional insured — a third party (a fair, a marketplace, a landlord) added to your policy so your coverage protects them too.
What it costs in 2026
Here is where the sourcing gets interesting, because every provider leads with a single number and every single number is an entry price for a specific, small profile.
Table: Advertised 2026 entry premiums for handmade-seller liability coverage
| Provider / program | Advertised price | Stated limits | Profile it applies to |
|---|---|---|---|
| ACT Insurance — ACT Pro | $279/year, or $24.25/month | $1M per occurrence, $2M aggregate | Artists and crafters, general |
| ACT Insurance — handmade beauty | $515/year | $1M occurrence, $2M aggregate, $2M products-completed operations | Soap, candle, cosmetics makers |
| Insurance Canopy — annual | $24.25/month | $1M/$2M general liability, $2M product liability | $0–$50,000 annual sales |
| Insurance Canopy — annual, higher band | $33.42/month | Same | $50,000–$100,000 annual sales |
| Insurance Canopy — single event | $49 for 1–3 days, $99 for 7 days, $149 for 90 days | General liability only | Single show or season |
| FLIP | $299/year, or $25.92/month | $1M occurrence, $2M general aggregate, $2M products-completed ops, no liability deductible | Food businesses |
| HSCG member program | "less than $550 a year" including membership | Not published on the overview page | Handmade soap, cosmetics, candles |
Three things fall out of that table once you line the numbers up rather than reading them one landing page at a time.
The category multiplier is real and large. The same insurer, the same product tier, the same limits: $279 for crafters generally, $515 for handmade beauty. That is an 85% premium for making soap instead of earrings, and it is not arbitrary — it prices ingestion, skin contact, and open flame.
The sales band is doing quiet work. Insurance Canopy's headline $24.25/month is explicitly the $0–$50,000-in-annual-sales band; crossing $50,000 moves you to $33.42. So the advertised price is not a price, it is the first rung of a ladder, and the thing that walks you up the ladder is growth.
Be careful comparing these to broker averages. MoneyGeek's 2026 analysis puts candle-maker general liability at $14/month ($169/year), and an all-lines average across five coverage types at $116/month ($1,397/year) — but that model is built on standardized profiles of businesses with one to four employees, drawn from roughly six million pricing estimates across ten insurers (MoneyGeek, Average Candle Maker Insurance Cost). It also shows general liability ranging from $9/month in Mississippi to $23/month in California. A national average that spans a 156% state-to-state gap is a benchmark, not a quote.
One more caveat on all of the above: ACT's own comparison table notes its figures are "sample quotes received online in June 2025." These are advertised entry prices published by companies that want your business, not audited rate filings. Treat them as the floor of a range.
Who will stop you from selling without it
Nobody sends a maker to jail for being uninsured. What happens instead is that a specific counterparty declines to do business with you, usually at the worst moment.
Amazon. Sellers must obtain commercial liability insurance within 30 days after exceeding $10,000 in gross proceeds in a single month, carrying at least $1 million per occurrence, with a deductible no higher than $10,000, and naming "Amazon.com Services LLC and its affiliates" as additional insureds (Simply Business summary of Amazon's seller requirements — Amazon's own Seller Central policy page is the authoritative version and worth confirming directly, as these terms change). This is the requirement most likely to surprise a maker, because it arrives attached to a good month.
Juried craft fairs. These publish their requirements in the vendor application, and they are more specific than most makers expect. The Bluemont Fair's 2026 vendor insurance page requires $1,000,000 each occurrence, $2,000,000 general aggregate, $1,000,000 products aggregate, $100,000 damage to rented premises, and $5,000 medical expense — and specifies a "General Liability Occurrence policy (Claims Made policies or certificates will NOT be accepted)," names the association as both additional insured and certificate holder, requires the certificate to cover the specific fair dates, and states that vendors whose policy lacks the required details "will not be permitted to participate in the Fair" (Bluemont Fair, Vendor & Exhibitor Insurance).
Bluemont is one fair, and its numbers are not a national rule — but its page is a good model of the shape of the requirement. Four separate things can invalidate a certificate you already paid for:
- Wrong limits — under the per-occurrence or aggregate minimum the organizer set.
- Wrong policy form — a claims-made certificate where an occurrence policy was required.
- Wrong named party — the organizer missing as additional insured, as certificate holder, or both.
- Wrong dates — coverage that does not span the actual event days.
Read your own show's vendor application rather than assuming any of these figures carry over. If you are still deciding which shows to apply to in the first place, selling at juried craft shows covers the application and break-even side of that decision.
Wholesale buyers. A boutique or a stockist ordering from you is buying an object it will hand to its own customers, and its insurer takes an interest in whose policy responds when that object misbehaves. Many buyers ask for a certificate of insurance alongside a first purchase order — worth confirming with each one rather than being surprised by it.
Etsy. Etsy publishes no seller insurance requirement. Broker guidance written for Etsy sellers describes this as an absence rather than pointing at a rule (Insurance Canopy, Etsy Seller Insurance); Etsy's own seller policies are the authoritative place to confirm it has not changed. The absence of a marketplace requirement is not the absence of exposure. It only means nobody is checking.
The exclusions are the product
A liability policy is defined by what it refuses. ACT's soap-makers policy publishes its exclusions plainly: products containing parabens or formaldehyde, non-compliant hand sanitizers, alcohol-based products, CBD and THC, dietary supplements, pharmaceuticals, and "any product or ingredient subject to an FDA recall" (ACT Insurance, Soap Makers Insurance).
Sit with that last one. A recall on an ingredient you bought in good faith can move the affected products outside the policy. The insurance does not make a recall survivable on its own — your records do, because the only thing that limits a recall's blast radius is knowing precisely which batches contained the affected lot and precisely who bought them.
Then there are the coverages that look included and aren't. Insurance Canopy prices tools and equipment at $4.50/month, workshop and class coverage at $10.42/month, and data breach at $8.25+/month as add-ons on top of the annual policy. If you teach a candle-pouring class in your studio — and a lot of makers have added exactly that revenue line — the base policy is not the policy you need.
And confirm that the program you're buying actually covers your category before you pay. Food and topical products sit in different programs at different prices for a reason; the fact that two providers both sell "maker insurance" does not mean either one will underwrite what you personally make. Ask the question in writing.
What to have ready before you request a quote
Every rating question a broker asks is a question about your records. Dana's first quote call went badly not because her candles are risky but because she could not answer "what did you sell last year?" with a number she trusted, and the difference between the $0–$50,000 band and the next one is real money.
Have these five things in front of you:
- Gross sales for the trailing twelve months, by channel. Retail, wholesale, and online are often rated differently, and "about thirty grand, I think" is not an answer that survives a claim audit later.
- A complete product list grouped by category. Candles, soap, bath products, food, and non-topical crafts underwrite differently. A single food item hiding inside a craft catalog can void the assumption the quote was built on.
- Whether you teach, demo, or host. Classes and workshops are a separate rating question and usually a separate add-on.
- Your event calendar and each organizer's certificate requirements. Limits, additional-insured wording, policy form, and dates — gathered before you buy, not after.
- Your batch and lot traceability. Not a rating factor, but the thing that determines whether a recall is a forty-unit problem or a four-hundred-unit problem.
That first item is where most makers stall, and it is a bookkeeping problem rather than an insurance one. This is the unglamorous case for keeping sales and production in one system instead of three: Ardent Seller tracks sales by channel and ties every finished batch back to the specific lots of wax, fragrance, or flour that went into it, so "what did I sell last year" and "which jars contained lot 4471" are both one query rather than an evening with a shoebox.
The number that should decide it
The premium comparison above is the easy part, and it is not the part that decides anything. This is: The Hartford's December 2025 analysis of a decade of small-business claims found that slip, fall, and customer-injury incidents rose from the fifth most common claim to the third, now representing 20% of claims — and that the average cost of one rose from roughly $20,000 to roughly $45,000 across the two study periods, a trend the insurer attributes in part to "a growing influence of litigation and legal system abuse, resulting in higher settlements and costlier verdicts" (The Hartford, December 9, 2025).
That is not a product liability figure — it is the general-liability, someone-got-hurt-near-your-operation figure, which is the more ordinary event. One $45,000 claim costs about 161 times the $279 annual premium. Against no policy, it costs you.
Dana bought the annual policy, added the workshop endorsement when she started teaching, and now emails a certificate with every wholesale line sheet without being asked. The candles did not get safer. She just stopped being the last line of defense.
Get one quote this week — most of these providers will price you online in under ten minutes — and read the exclusions page before you read the price. Then go find the trailing-twelve-months sales number they're going to ask for. If that second part is the hard one, start tracking sales and batches free and it will be a lookup next year instead of an evening.
Related reading
- Equipment Depreciation for Small Makers — The wax melter your homeowners policy caps at $2,500 also has a tax life; here's how to track its value and write-down correctly.
- Hobby vs. Business: Taxes and Record-Keeping — Insurers, marketplaces, and the IRS all want the same trailing-twelve-months revenue figure. This is where that number comes from.
- Selling at Juried Craft Shows — The certificate is only the gate; this is how to pick which shows are worth applying to and what a booth has to earn to be worth the fee.
- Batch Tracking for Food Sellers — The lot traceability that decides whether a recall touches forty units or four hundred, built step by step.
- How to Label Handmade Products — Labeling failures are a common product liability trigger; this covers what has to appear on the product itself.
Free resources
Free companion downloads if you want to put any of this into practice:
- Legal Documents Checklist — The certificate of insurance sits alongside your business license, EIN letter, and resale certificate; this is the full list of paperwork buyers and organizers ask for.
- Craft Seller Startup Checklist — Where insurance fits in the sequence of setting up, so you're not sorting it out the week of your first show.
This article is provided for educational purposes only and does not constitute legal, insurance, or financial advice. Coverage terms, exclusions, limits, and premiums vary by carrier, state, product category, and individual risk, and change frequently. Premium figures cited are advertised entry prices published by providers as of the dates noted, not quotes. Consult a licensed insurance agent or broker, and read the actual policy language, before making coverage decisions for your business.