Affordable product liability insurance - does it exist?

[mcadams1]

I am looking for any information where a small time operation, such as myself, can purchase product liability insurance. I cannot afford the Soapmaker's Guild for $520 a year, nor the Indie Insurance. I called RLI and it sounded promising and was something I could afford, but I was refused when the agent asked what was in my soap. When I mentioned I used goat's milk in some of my soaps from our own Alpine goats - I got a definite NO & was refused insurance. I want to do the right thing, but I only sell about $200 to $300 a year in soap, lotion & lip balm in a small family run bakery gift shop where I work. It just doesn't make sense to spend $500 in year in insurance. I have tried State Farm & American Family - both NO! Does anyone know of an insurance that covers my particular situation for maybe $200-250 a year or am I dreaming??! I live in Oregon, if that makes any difference. Thanks for any help!

 

[new12soap]

I'm sorry, I don't have any suggestions for you, but did the RLI agent explain why they cannot insure you for using your own goat milk? That seems absurd. I know there are some pretty strict rules about using unpasturized milks for food here in the US, but in soap? What was their reasoning?

 

[gunsmithgirl]

RLI also told me they couldn't insure because we use milk from our own animals. I thought that was ridiculous. I eventually sucked it up and went with the soapmakers guild, it was the cheapest I could find that would actually insure me.

 

[The Efficacious Gentleman]

Could you not get it covered by the bakery's insurance?

 

[cmzaha]

Could you not get it covered by the bakery's insurance?

I was going to mention the same. I am sure the bakery already uses milk in products maybe their company could add on your soap. For an additional of course

 

[mcadams1]

RLI explained had I never used goat's milk from my own goat's that it was possible to obtain insurance with them, but because I have in the past, they would not cover me. I explained that not all of my recipes use the milk, but he said it didn't matter. I guess once you've used milk from your animals, you aren't eligible. I also asked if I used milk from my friend's certified farm would that be O.K., he said No. Apparently, RLI has an issue with any farm milk. I also asked if the milk I used in lotions that I pasteurize first would be O.K., again the answer was No. I had planned to sell products at a local quilt shop and another gift shop in town, so even if I could get insured through the bakery, which I highly doubt, I would be restricted to sell only there. If anyone knows of another insurance company, please let me know. I would appreciate it.

 

[SplendorSoaps]

I read in an online article (so it MUST be true, right? LOL) that some homeowner's insurance policies might have optional coverage for in-home business. I didn't check that out, so I could be wrong. It might be worth a phone call, though? Good luck!

Sorry to hear about RLI. I just sent in my first premium check with them, and it was only $147 for the year (for only $5000 in sales - I'm just getting started). They didn't ask me what I put in the soap, they just wanted to make sure that I wasn't also selling candles (probably a moot point, since I haven't ever tried using goat milk).

 

[dwsterling]

How come some of us get quotes for 147 and some for 235 is it by zip or something?

 

[snappyllama]

I assume their formulas work the same as any other insurance taking: location, credit history, sales amount and moon phase into account.

 

[The Efficacious Gentleman]

RLI explained had I never used goat's milk from my own goat's that it was possible to obtain insurance with them, but because I have in the past, they would not cover me. I explained that not all of my recipes use the milk, but he said it didn't matter. I guess once you've used milk from your animals, you aren't eligible. I also asked if I used milk from my friend's certified farm would that be O.K., he said No. Apparently, RLI has an issue with any farm milk. I also asked if the milk I used in lotions that I pasteurize first would be O.K., again the answer was No. I had planned to sell products at a local quilt shop and another gift shop in town, so even if I could get insured through the bakery, which I highly doubt, I would be restricted to sell only there. If anyone knows of another insurance company, please let me know. I would appreciate it.

Okay, so at the moment the sales don't cover the insurance - but you are planning on expanding anyway! So get the insurance that you can get and get selling.

 

[shunt2011]

Also, be careful if you call your homeowners. I've heard of people having their insurance cancelled becasue they are working with caustic chemicals in their home so the insurance won't cover them. Many homeowner policies won't cover us. I would get the insurance you want and remember you can write it off on your taxes. It's not cheap but it's better than having a lawsuit and not being covered for sure.

 

[greensara]

If you've sold soaps through your current business entity using your own goats milk, could you create a new subsidiary under your current business umbrella? That new company wouldn't have used any of your animal's milk and it seems to me that you'd be in the clear, so to speak.

 

[mcadams1]

If you are talking about still trying to obtain insurance with RLI, their answer was a flat NO. Even if I changed the name of the company, the fact that I used goat's milk for making soap whether it was from my farm, or someone else's voided me from ever obtaining insurance with them. They also were not interested if I ceased to make soap or lotion with goat's milk again. I guess once you use farm milk in your products, you are out. I even pasteurize the milk for the lotion, but RLI didn't seem to care.

 

[The Efficacious Gentleman]

I find that to be a ridiculous policy, I must say.