When it comes to selling homemade craft items online, many people fail to view their company as a legitimate business. This means that most home crafters don't have adequate insurance coverage to protect them from financial hardship if something should go wrong with one of their products.

Here are three types of commercial insurance you should consider investing in if you regularly sell crafts online.

1. Product-Liability Insurance

While no one plans to have the craft they sell serve as the source of serious injury, accidents do happen. In order to protect yourself against a lawsuit filed by a customer whose online purchase of your crafted items resulted in injury, you will need access to a quality product-liability insurance plan.

This type of insurance is designed to serve as a buffer between your own personal finances and the fiscal responsibility you assume when selling craft products to the public. Be sure to talk to your insurance agent about product-liability insurance to guarantee you are protected from the backlash of any defective crafts sold in the future.

2. Home-Based Business Insurance

You may assume that your homeowners insurance policy will provide financial coverage for any damage your home sustains, but it's important to recognize that your online business activities could negate some types of homeowners insurance coverage. If you are creating your craft at home, you are running a home-based business. This means that parts of your home are transformed into a commercial property, and must be insured as such.

Be sure to consult with your insurance agent to determine if your homeowners insurance policy provides adequate coverage or if you will need to invest in a home-based business insurance policy to maintain total coverage for your home in the future.

3. General Liability Insurance

Modern society is often considered to be a litigious one, with people looking for any excuse to file a lawsuit against the companies they do business with. If you are worried that your online sales could result in a potential lawsuit, it's imperative that you acquire a general liability insurance policy as quickly as possible.

These insurance policies protect against lawsuits involving slander, injury, or negligence. Ask your insurance agent about adding general liability coverage to your insurance policy in order to protect your financial assets against litigation.

Selling crafts online can be a great way to generate some extra cash, but you need to take the steps necessary to protect your financial assets against potential loss as a result of your business activities. Consider adding product-liability coverage, home-based business coverage, and general liability coverage to your existing insurance policies to maximize your protection in the future.

For quotes or more information, talk to insurance companies such as Western Reserve Group.