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Since all insurance companies are different, best thing is to approach it head on and ask them what the stipulations may be with the policy.... There have been reactions from , its ok and nothing special, to not allowed, no way, no how... If you are going to make beads as a hobby, they will have different approach to how they may cover you/your home than if you tell them its going to be a home based business.... I would not even consider calling it a (possible) business till you see if you are really going to stick with making beads... The business aspect can come later.
You may have to really explain the processes, the real concern will probably be the torch, all the rest of the stuff (except maybe kiln) is really very benign.
Remember propane tanks or any fuel tanks over 1 pound size are always outside, even if they (insurance agent) don't ask.... Most insurance agents are not even aware of lamp working, so you may really have to educate them.
As for city regulations, they probably only have concerns about fuel storage and that will be probably be a Fire Dept. code issue. As for possible doing business out of a residence, what ever the city rules may be (city business license). If it's a hobby then fire safety (torch) may be only concern.
Dale
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San Francisco - A Few Toys Short of a Happy Meal
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