As an interior designer, you work to create beautiful, comfortable, and safe spaces in your clients’ homes and businesses. You have the ability to transform a drab area into a room that reflects the personality and professionalism of the client you work with. Though a successful design and a satisfied customer are always your goal, life doesn’t always go according to plan. If you make an error, or a client is simply dissatisfied with your work, you may be held professionally responsible. In these instances, if worst comes to worst, you may find yourself in the middle of a lawsuit.

Running an interior design business comes with a number of liabilities and risks. While there is risk of professional error, there is also risk of workplace accidents, natural disasters, and theft, among others. To protect your business and the team you employ, consider a comprehensive business insurance package. With the right policies, you can provide financial protection for your business and your employees when the need arises.

Business insurance is a good option for your firm if:

• You would like to insure your services and practice against claims of poor performance or errors in your work
• You store employee or customer data like Social Security numbers or credit card information
• You employ others and provide benefits like health insurance or retirement plans
• You lease or own your own office building
• You store valuable equipment or property in your office
• Clients or vendors visit your office

What insurance coverage do I need as an interior designer?

For interior designers, professional liability insurance is one of the most important coverages to obtain. Other insurance types, including general liability and commercial auto insurance, are also critical to running your business. Below we explain some of the more common business insurance coverages that interior designers should consider.

Professional Liability Insurance

As an interior designer, you possess the keen eye for style and decor necessary to make a client’s home more hospitable. Oftentimes, good taste comes with a high price tag. Though a disagreement over a $200 nightstand can be easily fixed, an error with $20,000 worth of carpeting causes more serious problems. Errors or omissions in your work can end up causing significant financial damage and lead to lawsuits and claims against your firm. Professional liability insurance, also known as errors & omissions insurance, can protect you from potential client lawsuits stemming from the performance of your professional duties. Professional liability insurance is one of the most important coverages an interior designer can obtain, as interior designers are highly susceptible to these claims. Covered areas for professional liability insurance include negligence, misleading statements, performance, and breach of duty.

Examples:

• Errors/Negligence: You are hired to redesign a client’s ranch-style home. As construction nears completion on the redesign, the city inspector flags the omission of fire sprinklers throughout the home. This fire safety measure is required for all new homes and major remodels in your client’s city. Your client will need to spend an additional $50,000 to add the sprinklers, and he sues your firm for failing to include the sprinklers in your designs.
• Performance: Your firm is hired to create the interior design of a new 500-room luxury hotel. The owner is on a shortened timeline and requires your firm to submit the final designs within a 6-week period. Due to a mixup at your office, you are two weeks late with the designs, causing the owner to push back his construction timeline. This ends up costing the owner hundreds of thousands of dollars.

General Liability Insurance

General liability insurance is a common coverage for businesses, and this type of insurance protects your company from lawsuits claiming property damage or bodily injury caused by your business or your employees. If you accidentally damage a client’s property on a site visit, or if a client visiting your office injures himself—these are all situations in which general liability can protect you from any claims. General liability is third-party insurance, meaning it covers you against claims from third parties, including vendors, customers, or landlords.

Examples:

• Property damage: A zealous new employee rips up the shag carpeting at a client’s home during a consultation visit, attempting to demonstrate to their client that they probably already have hardwood floors. There are no hardwood floors, and the client must pay to have the carpet repaired. They sue your company for property damage.
• Bodily injury: You are moving an oversized couch into a client’s apartment, just to show her how it will look. You accidentally roll the couch onto his toes, breaking them. He must go to the hospital and take time off from his labor-intensive job to recover from the injury. He sues your business for bodily injury.

Commercial Property Insurance

As an interior designer, you know the value clients place in a well-designed office space. When it comes to your own office and business property, you want to make sure that you’re adequately protected from any unfortunate events. Commercial property insurance helps protect the value of the physical assets your firm owns or leases if that property is damaged or lost due to accidents or disasters. This type of insurance covers property such as buildings, equipment, inventory, furniture, artwork, and computers. Commonly covered causes of loss include fire, lightening, wind, hail, explosion, and vandalism.

Examples:

• Buildings: Your sales floor and office are located in a remote area off a freeway, so you set up a large sign out front to help potential customers find you. Unfortunately, a severe storm hits the area just one week later, and your new sign is damaged by lightning. Commercial property insurance would cover the damage.
• Contents: You have an example living room set displayed in your showroom. It includes high-quality flooring, a top-of-the-line couch, and a TV. One of your employees happens to leave a large window open overnight, and an unexpected storm hits the area. The carpeting and upholstery of the living room set are ruined. Your commercial property insurance would cover the damage.

Commercial Auto Insurance

If your company owns or leases one or more vehicles to visit worksites or client offices, or your employees use their personal vehicles for business purposes, commercial auto insurance is a key coverage to obtain. In the event of an accident involving your vehicles, commercial auto insurance can provide financial protection. This type of insurance has both liability and property components. The liability component protects your business if one of your workers is at fault for causing a crash and causes bodily injury or damages someone else’s vehicle or property. The property component of commercial auto insurance protects the value of your vehicle against crashes, theft, and other perils.

Example:

• One of your best employees is called out to a client’s house, which happens to be on the other side of town. He takes the company car, but he manages to accidentally back it into another vehicle while he is parking. Luckily, your commercial auto policy would cover the damage to both vehicles.

Workers’ Compensation Insurance

Workers’ compensation insurance provides financial benefits to employees who suffer work-related illnesses or injuries while employed by your business. In most states, businesses that have employees are required to carry workers’ compensation insurance. In exchange for accepting workers’ comp benefits, an injured employee agrees to not sue your business for the injury. Workers’ compensation insurance is no-fault, which means that it pays benefits regardless of whether the employer or employee is at fault for the injury.

Workers’ compensation can cover the costs of:

• Funeral expenses
• Disability benefits
• Medical expenses
• Rehabilitation costs
• Death benefits
• A portion of lost wages

Example:

• One of your employees visits a client’s home to oversee the installation of a large chandelier. She climbs to the top of the client’s staircase to get a better angle, but twists her ankle and falls backwards, throwing out her back. She must go to the hospital, where she is diagnosed with a spinal disc problem and must receive physical therapy for a week before she can return to work. Workers’ compensation insurance would cover the cost of her hospital bills, as well as a portion of the income that she cannot earn while she is away from the office.

Business Owner’s Policy

A business owner’s policy, also known as a “BOP,” is a special bundling of policies that can provide coverage for risks that are common to small business owners. BOPs combine property, general liability, and business income and extra expense insurance coverages for qualified small businesses. Importantly, a business owner’s policy can help you save money, with lower premiums than buying the individual coverages separately.

Final Word

As an interior designer, you work to improve your clients’ homes and businesses. A well-designed environment can boost productivity and personal enjoyment. Though you may be well-intentioned, mistakes are sometimes an inevitable part of doing business. To protect you and your firm against lawsuits related to your professional work, consider purchasing professional liability insurance. For the many other risks that come with running a business, your best bet is to find the right combination of business insurance policies. From general liability to commercial property insurance, there are a number of coverages that will help to protect you and your employees in the face of any unfortunate events.