# Liability insurance



## SpiralTouch

I've read a lot on here about liability insurance and recommendations to get 1 million in protection.

My question is this - if the market/venue where you sell your soap does NOT require any insurance (only a vendors license) would you still buy it ? The market where I plan to sell in the future does not require it. 

If your soaps are labeled with ingredients, how could someone try to sue you? If they are allergic to something then it is their responsibility to look for that (ex: coconut) on the label - not grounds for a lawsuit. (?)

I know that legally you are not required to have liability insurance to sell soap.. And soap doesn't even legally require labeling.

Thoughts please.


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## RocknRoll

This is just me, but I plan on getting it because I dont like the feeling of "what if." I have too much at stake to lose to some sue happy joe shmo. Im not really a risk taker and would rather be safe than sorry. Getting insurance is actualy the only thing holding me back from opening my Etsy shop and selling my soap at boutiques/stores. I plan on getting it within the next week or two. then again,....this could be the worrywart in me lol :x


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## SpiralTouch

I totally understand the concern.. But how could someone legally prove your soap (other than an allergic reaction) caused them harm? Wouldn't the only reason for harm be an allergic reaction to an ingredient? And that is not your fault. 

It just seems highly unlikely someone could successfully sue over it.


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## marghewitt

Does anyone know of anyone who has been sued? I have insurance because I too am afraid but I really wonder if it happens ever.


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## melstan775

SpiralTouch said:


> I totally understand the concern.. But how could someone legally prove your soap (other than an allergic reaction) caused them harm? Wouldn't the only reason for harm be an allergic reaction to an ingredient? And that is not your fault.
> 
> *It just seems highly unlikely someone could successfully sue over it*.



You're not American are you?  We're a sue happy people.


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## Lindy

In Canada my understanding is that it is a requirement.  With the Guild (www.soapguild.org) you can get insurance really, really inexpensively.  I think it's $400 for a year.  You do need to be a member of HSMG but it is so worth it!


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## green soap

SpiralTouch said:


> I've read a lot on here about liability insurance and recommendations to get 1 million in protection.
> 
> My question is this - if the market/venue where you sell your soap does NOT require any insurance (only a vendors license) would you still buy it ? The market where I plan to sell in the future does not require it.
> 
> If your soaps are labeled with ingredients, how could someone try to sue you? If they are allergic to something then it is their responsibility to look for that (ex: coconut) on the label - not grounds for a lawsuit. (?)
> 
> I know that legally you are not required to have liability insurance to sell soap.. And soap doesn't even legally require labeling.
> 
> Thoughts please.



I got insurance trough the handcrafted soapmakers guild because I wanted to apply for a booth at a market that did require insurance.  I am already a vendor at our towns Farmer's market, and they do not require insurance (just a California sellers permit).  

I decided not to vend at that other market, so I feel like I wasted the money to get insurance.  Why?  because as you explain, there is no reason for lawsuits.  I have been making soap for a while, and I do not see ever making lye heavy soap, and much less putting lye heavy soap for sale....my soaps are over labeled (I just use FDA label regulation even though FDA does not regulate soap).  I decided to label all the EO oils I use since I have encountered so many EO allergies from folks that peruse my booth.  The fragrance is labeled as 'fragrance' and if folks tell me they have sensitivities, I point them to my unscented soap basket.  

I have also decided to pick up more small wholesale accounts, from folks that know me, and know that if there is any problem I will make it right.  I will only continue doing the one weekly market (that does not require insurance). I do not want to do another market.  So when it is time to renew my insurance I will let it drop (expire).  I know that someone 'could' sue me, but in the particular environment where I operate and sell soaps, this is so unlikely.  

My response will probably not be popular, but the cost of insurance really ate into my profits, and I rather spend the money in EO, better tools and more carrier oils.  I did not sell enough soaps last year to justify that cost, but even expecting to do better this year (sell more) I still don't think I will renew it.  Unless of course, something really changes in my business.


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## Lindy

Green Soap the only other caution I would give you is that not having commercial liability insurance can void your home insurance if they catch wind that you are making and selling soap.  Do I understand it?  No.  But I can tell you that it is how it works.  Each and every year I have to prove I still have my liability insurance in place.  And if something happens that is caused by soap making you won't be covered.  For whatever reason home insurance does not like this or candles as they feel the liability is significantly higher than other craft businesses.

We each have to choose for ourselves what is best for us and what risks we are prepared to take.  I have never heard of anyone being sued over soap, but it doesn't mean it can't happen.


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## LuvOurNewf

Remember the story of the elderly woman that bought coffee from McD's, spilled it on herself and sued McD's?
The lid wasn't on tight and because it didn't say "HOT" anywhere on the cup,,,,well there ya go.

Forewarned is forearmed.


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## VanessaP

Just because you haven't see any active lye in your soaps, you never know if there will be in the future. Someone can sue just because the colorant you used in your soap left a stain on their tub, ridiculous as that sounds. You just never know when someone will sue you. Its like car insurance. You may never be in a car wreck, but its nice to know its there for you if you are.


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## nebetmiw

Here is a good what if. Suppose you sell a bar of soap with someone with young child.  It looks real yummy and kid eats some and ends up in hospital.  You get sued for medical bill.  Yes, there have been law suits not many but they have happened.


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## Lindy

That is actually the reason that soap that resembles food is not allowed in the UK.  There are lots of of soapers of course that don't follow this directive but that's true everywhere isn't it.


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## Sunny

SpiralTouch said:


> But how could someone legally prove



Do you want to find out how? Cause I don't.

Your business/house/cars/possessions are all at stake when you're selling. Buying insurance is your choice. 

Just like Vanessa said - I haven't had any major health problems or accidents yet but I still have health insurance because I don't want to lose everything if something happens.


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## SpiralTouch

nebetmiw said:


> Here is a good what if. Suppose you sell a bar of soap with someone with young child.  It looks real yummy and kid eats some and ends up in hospital.  You get sued for medical bill.  Yes, there have been law suits not many but they have happened.



So I could sue Dove soap for example if my kid ate some? I don't think that's how it works


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## Rhon

Hmmm, seems I've seen this same subject on another soap forum though it wasn't as "friendly". I think it boils down to what risk one is willing to assume. It's probably true, a court case could most likely get thrown out BUT by then you've lost work time, perhaps lawyer fees, etc. My time is too precious to be taken away by some sue-happy individual; even one without a valid suit.


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## SpiralTouch

Thanks for everyone's thoughts on this! I won't be buying insurance for the time being. Maybe if I ever 'go big' but that's unlikely.


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## TeriDk

green soap said:


> I got insurance trough the handcrafted soapmakers guild because I wanted to apply for a booth at a market that did require insurance.  I am already a vendor at our towns Farmer's market, and they do not require insurance (just a California sellers permit).
> 
> I decided not to vend at that other market, so I feel like I wasted the money to get insurance.  Why?  because as you explain, there is no reason for lawsuits.  I have been making soap for a while, and I do not see ever making lye heavy soap, and much less putting lye heavy soap for sale....my soaps are over labeled (I just use FDA label regulation even though FDA does not regulate soap).  I decided to label all the EO oils I use since I have encountered so many EO allergies from folks that peruse my booth.  The fragrance is labeled as 'fragrance' and if folks tell me they have sensitivities, I point them to my unscented soap basket.



I bought some milk soap in MT and it was lye heavy...burned when I used it but at the time I didn't understand what was causing the problem.  I don't have insurance but I test every batch and cure it at least 7 weeks.  I also list ingredients on the label.


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## Genny

SpiralTouch said:


> So I could sue Dove soap for example if my kid ate some? I don't think that's how it works



If Dove made soap that resembled food, then yes you could sue if your child ate some.


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## Genny

SpiralTouch said:


> Thanks for everyone's thoughts on this! I won't be buying insurance for the time being. Maybe if I ever 'go big' but that's unlikely.



Yeah, I wouldn't announce something like that.


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## Genny

I agree with Vanessa.  It is similar to having car insurance or homeowners insurance.  I've never been in a car accident and I'm an incredibly safe driver.  But what if something happens?  It would be incredibly irresponsible on my part and to anyone else involved, if I didn't have insurance.  

I've said this before, I'm not a sue happy person and have never sued anyone.  But if my child was harmed due to someone's product, I would absolutely sue to make sure that the medical expenses were covered.  I don't care if you're a small home business just trying to provide for your family or if you are a big time billion dollar company, the well being of my child trumps your issues.


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## Lindy

I'm not going to tell you what to do when it comes to insurance mostly because you are going to do what you are going to do.  It does influence my opinion of you though....


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## LandedGentress

Hi, I'm a newbie to the forum but I've been making mostlyMP soap for a year but make CP as well and I've actually refused to sell to a small boutique until I had all my ducks in a row and that most definitely means insurance.I have my vendors license and just formed my LLC but until I get my liability insurance through the soap makers guild there is no way I'm branching out further. Even if you label it, and yes, I get that if you don't make any claims beyond being soap that you don't have to label it, but if a lye pocket is in your soap or someone unaware of an allergy has a reaction, how will you protect yourself. If you're starting out, insurance may seem an extra expense, but so is tax softeware, incorporation and the licensing. Failure to do so could jeopardize what I'm assuming you've taken time to build. I can just say for me, NOT having it would be a pennywise pound foolish option in such a litigious society.


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## Lindy

Allergies are very important and I do have customers ask if x ingredient is in my soap.  Or they will stand there reading the ingredients.  Here in Canada soap is regulated as a cosmetic which means registrations, recipes submitted to Health Canada and packaging/labeling regulations we must follow.  Full disclosure is so important when we're dealing with personal care products and yes even though it's a was-off product it's a personal care product which is used in very sensitive areas.  Try to imagine using soap that was lye heavy or had a lye pocket on your bits.  That is why you have insurance.  

There are also fragrances that will irritate the bits and many are essential oils.  So if you make a soap that will set things on fire and you don't have a BIG warning on there, you can be sued.  A child eating the soap is less of a problem than what I've just described.  A child nibbling on soap is going to quickly be a self-correcting problem.


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## VanessaP

I have had friends and family begging me to sell for the last 6 months. I have refused because I didn't feel confident in doing so when they started telling me I should and while I am plenty confident to sell now, I also waited until I can afford the insurance through the guild, which I will be purchasing my pro membership soon. Keep in mind that if you end up getting stores or even chain stores wanting to wholesale your products, they will likely require that you have proof of current insurance.


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## judymoody

I got liability insurance because I donate soap to fundraisers and if money changes hands, liability could make its way back to the producer even if I didn't profit personally.

Seriously, it's so cheap.  Why be penny wise and pound foolish?  My RLI policy is less than $150 per year.


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## aroma

But Judy, they wont cover you if you make tarts or candles, will they?


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## judymoody

Nope, no candles.  But I thought the OP was concerned about soap only?


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## Scentapy

I just talked to a broker today that gave me a very rough estimate of $300-$400 a year.  I didn't know it was that cheap!  I told her not to hesitate to get the ball rolling.  That is FAR to cheap NOT to get it.  I work to hard for my house, my cars, etc. to lose it to someone sue happy!


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## Lindy

Good on you!


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## Scentapy

Ok... so I am waiting for the actual quote.  Should be getting it tomorrow.  Like I said.. the woman at the insurance agency that I talked to said it was like $300 or $400 BUT that was a very rough estimate.  I just talked to my friend tonight that has insurance for her candle business and she said she is paying $985 because she had to be listed as a manufacturer.  Wouldn't I also have to be listed as a manufacturer because I *make* bath and body products?  Ugh.


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## Lindy

You are a manufacturer.....


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