I haven't read all the comments because most will not be relevant to me. I will comment about the insurance as I am a retired broker. Keep in mind that I am in Canada. Have a discussion with your broker. Some businesses are allowed out a home and can certainly be insured. Sometime it is simply a ryder on your home policy. Regarding stock, unless you are insuring the stock for it's full value, yes, you will only get the cost of materials. In all cases, you should let your insurance company know about you hobby as should there be a claim, it could ALL be denied. It isn't that they are weaseling out of trying to pay, you have broken the contract you entered into.