I’ve been a lawyer for nearly 25 years. I often joke with audiences when I teach risk management courses that nobody ever wants a lawyer around, until they need one. The same can be said about insurance. Sometimes it’s hard for us to appreciate how important it is to insulate our businesses from the unknown and the unanticipated, until something happens to show us exactly how vulnerable our livelihoods are to accidents.
Every profession has its risks, and real estate staging is no different. Moving inventory from one place to another, working in client’s homes, and maintaining products necessary for the work are all risk producing activities. Having protection with insurance tailored for home stagers is a simple way to address the inevitable and limit the disruption an accident can cause.
While there’s no exhaustive list of risks facings stagers every day, we mainly see claims from three sources: damage to your client’s property; damage to staging inventory; and damage to our client’s buildings, whether owned or rented. Every claim is unique in some respects, but these three risks are common to most claims.
3 Ways Insurance for Home Stagers can Protect Your Business:
1. Damage to Your Client’s Property
Easily the most common claim we see in our stager program, damage to your client’s property can create a host of problems in addition to the damage itself.
Referral sources could be affected, a sale could be lost, and repairs or replacement could be expensive.
We recently dealt with a claim where our insured scratched a client’s floor while staging the home. The scratch was significant and easily seen by anyone visiting the home with thoughts of buying it. The stager’s client was beyond irate, and the client’s real estate agent was facing the prospect of additional delays showing the property because of the damage.
Thankfully this is something we are always prepared to address. Instead of being saddled with managing this crisis alone, our stager client just had to notify us of the accident and let us take it from there. We were able to arrange for repairs to happen immediately, and without our insured having to pay thousands of dollars out of pocket on a moment’s notice. The property was fixed, the emergency ended, and the stager was able to continue doing what they do best without missing a beat.
Having the right insurance for home stagers in place helped our stager client to rise above the drama and get back to running their business.
2. Damage to Staging Inventory
Whether you lease or own your inventory, you rely on these pieces to make your business work. When a piece from your staging inventory is damaged or destroyed it needs to be replaced, especially if you rented it from another entity. Having a sudden need to spend money to repair or replace a critical piece can derail a staging assignment, and significantly disrupt your business relationships. Insurance for home stagers to protect your inventory is an important tool in preventing risk.
Sometimes damage comes from the wholesale vendor during intentional travel or theft of your inventory.
We recently received a claim from one of our stager clients where an attorney for a seller decided he wanted to end the staging agreement and remove our client’s inventory immediately, planning to simply move the pieces out into the street.
Our stager was in the process of moving and was unable to drop everything and get to the site to protect their inventory. Since we encourage our clients to contact us immediately in the event of a crisis, we were able to immediately assuage our stager’s concerns by assuring them that if their property was abandoned by the attorney, their insurance policy would cover the damage to the inventory and replace anything that was beyond repair.
Without insurance this stager could have lost their pieces and have no place else to turn but the court system in an effort to recoup their losses. Instead, they had the confidence of knowing that even in the face of a bad actor, they had a backstop in the form of a policy that would replace everything rather than waiting for justice in a court system overwhelmed with cases.
Speaking of bad actors, staging inventory is constantly at risk for theft from a staged property.
Not every client has appropriate security in place. Some staged homes are vacant expect for showings, allowing ample time for someone to case the property and assess items to steal. Having insurance for staging inventory means not waiting for law enforcement to track down the people who stole your stuff, hoping it was not already sold or damaged. It means having an insurer behind you to make you whole when justice cannot.
3. Protecting Your Real Property
Sometimes the risk is bigger than a damaged chair, a scratched floor, or an irate client. Sometimes one event can decimate your entire business in an instant. One of our insureds recently learned how quickly everything can change, and how important it is to have protection.
One of our larger insured partners rented a warehouse to store and maintain staging inventory for their business. An employee using an oil-based stain to refinish a piece of furniture threw used rags into a trash receptacle and forgot about them. After sitting in the trash for a while the solution on the rags began to oxidate and give off heat. Unfortunately, this allowed the heat to build up faster than it could escape, igniting the rags and everything else in the trash can. The fire quickly spread, causing catastrophic damage to the staging inventory and the building. Thankfully nobody was injured.
This event would destroy an average staging business without insurance to cover the loss. The building owner was damaged, and the stager had agreed in the building lease to be responsible for any repairs to the structure. There were leased staging items and owned items, all destroyed in an instant. Jobs were scheduled but the inventory was mostly gone.
This event would crush an uninsured business absent significant cash reserves, that, let’s face it, are not in abundance these days. Having insurance was the difference between this stager being forced out of business due to loss of inventory and the prospect of paying tens of thousands of dollars to repair the building. Here, the stager was able to make a claim for all of the damaged or lost inventory, the repairs to the building and was able to complete the jobs already scheduled with little to no time lost.
These examples are but a few of the claims we help our insured navigate every day.
Nobody wants to write a check in anticipation of disaster, especially a disaster that seems like it would never happen to them. Unfortunately, these things do happen to us when we least expect it and, in many instances, when we can least afford it. Having an insurance policy tailored to stagers in place, and a team of risk professionals in your corner to help with everything from helping you with your business agreements to shepherding you through a disastrous event, can mean the difference between shutting your doors and expanding your horizons. Our goal is protecting your business and giving you that safety net for when everything falls apart, and we love every minute of doing just that for our clients.
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Joe, through his years of litigation and claims experience, has developed risk management strategies that work for any business model. Joe’s expertise in analyzing businesses to identify weaknesses and potential pitfalls has
made him highly regarded educator and public speaker. Joe now leads the SDOpro Team of Risk Managers for Home Stagers & Interior Designers at Villanova Insurance Partners, offered to RESA members (including preferred pricing and benefits) via RESASURE.
- Insurance for Home Stagers – How it Can Protect your Business - January 4, 2023
