How to insure a market stall
Across Australia, hundreds of festivals and markets provide communities with a place to buy and sell goods, often from first-time entrepreneurs. According to a 2014 RIRDC report there’s good reason why market stalls are so popular, with 80 per cent of farmers' market stallholders making a profit.
If you’re thinking of starting a market stall, or already have one, insurance is an important consideration.
Lynette Rayner, editor and publisher of Australian Markets and Fairs magazine since 1993, says more than 20,000 people a year run market stalls, ranging from hobbyists who barely cover their costs, to professional traders who operate one or more market stalls at different markets every weekend.
“Some iconic Australian brands, like Dinosaur Designs and Sass & Bide, started out at market stalls,” Lynette says. “But whether you do it once or twice or all year round, you generally need to bring your Certificate of Currency to show the organiser you’re protected if someone is injured from the products you sell, whether they are electricals, cosmetics, foods – anything, really,” she says.
She adds that ensuring stallholders have market stall insurance is usually a condition of the market organisers’ own insurance.
What is market stall insurance?
Generally, Market Stall Insurance has two components – Public Liability Insurance and Product Liability Insurance.
Public liability insurance
This covers your liability for damage to property or injury to a third party that occurs in your designated market stall or exhibit area.
Public Liability insurance covers your liability for damage to property or injury to a third party that occurs in your designated market stall or exhibit area.
It can include accidental damage to property or to a person from the set-up of your stall – as market stall owner Jessica discovered. A gust of wind blew the gazebo covering her clothing stall onto a nearby vehicle, causing more than $2000 worth of damage. Jessica was found to be liable for the damage because she had not secured the pegs of her gazebo correctly. Fortunately, her insurance covered this.
Usually, Public Liability Insurance only covers claims directly related to your stall and for a period of time before and after the stall opening hours, to cover you for set-up and take-down times. It typically doesn’t cover:
- claims connected with amusement rides or animal stalls (separate cover must be arranged for these),
- and stalls in a shopping centre lease or tenancy. You would need to arrange a Business Insurance policy or speak to a broker for this.
Sometimes a market organiser will include Public Liability in the cost of the stall – but be careful to check what you are covered for if this is the case.
Product Liability Insurance
Product Liability Insurance covers:
- your legal costs to defend a claim,
- and compensation costs to a customer due to damage to property or injury to a third party as a result of the products that you sell at your market stall.
For example, it may cover a customer’s medical expenses. Fiona discovered this when she sold a chocolate cake marked ‘nut-free’ to a customer at her market stall. The customer had an allergic reaction to the cake, which was found to contain almond meal, even though Fiona had stated the cake was nut-free. Fiona was found to be negligent. Frtunately, her customer’s medical expenses were covered under Fiona’s Market Stall Insurance Products Liability cover.
Exclusions to this cover include deliberately false statements or omissions by you, mistakes in advertised pricing, exports to North America, the cost of correcting work done by you, a breach of professional duty, business interruption and personal injury to employees.
What does Market Stall Insurance cover?
What each insurer offers with their Market Stall Insurance varies, so it’s important to read the relevant Product Disclosure Statement. AAMI offers two options; Public Liability Insurance on its own, or combined Public and Product Liability Insurance.
- What insurance do you need when you sell your products on the go?
- How much does public liability insurance cost?
- Insurance recommended for market stall holders
Insurance is issued by AAI Limited ABN 48 005 297 807 trading as AAMI Business Insurance. Any advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. Please read the relevant Product Disclosure Statement before you make any decision regarding this product.