How many soap makers get insurance?

[Megan]

But I get so much out of my membership with HSCG that it's worth it. I originally had just the membership without the insurance because I had insurance through State Farm, but once the insurance got up so high, it was actually more than a $500 annual difference for me.
I think if I hadn't had my membership with HSCG, OR I didn't actually use my membership with HSCG then yeah, it wouldn't be worth it. But the insurance through HSCG is relatively inexpensive when only comparing insurance costs.

This is why I'm switching in a couple of months. I figure, I may not actually take full advantage of the HSCG for a year or more still, but in the long run I think it is a better choice.

 

[Relle]

Thanks. It would be nice to know how many soap makers have insurance world wide...and how many soap makers there are world wide.

You will never find the answer to that.

 

[Satinfox]

You will never find the answer to that.

Never say never

 

[AlexanderMakesSoap]

While we've yet to sell our second bar of soap - we do have insurance, as we've had a natural cosmetics shop since 2013.

 

[Satinfox]

I do sell and I've tried multiple places to get insurance as some craft shows do require it and I haven't found one that will give me a policy. They've all said I don't make enough money yet (we've been online for a few years and just started craft shows at the end of last year). Anybody have a good recommendation where I might be able to get a policy?

Bramble berry has an article on soap making insurance. That may help you if you are in the United States.

While we've yet to sell our second bar of soap - we do have insurance, as we've had a natural cosmetics shop since 2013.

Do you have cosmetic insurance that covers soap as well?

 

[Todd Ziegler]

In the UK and I've got insurance here - public liability and product liability. I also have cosmetic safety reports for the few soaps I sell. It's quite a costly process so only have limited ones I can sell eg. six variants. I wish I could make loads of different scents and types to sell but it's in my nature to be safe and err on the side of caution (ex health professional here) It annoys me when I see people selling all sorts of soaps without any cosmetic safety reports or insurance here in the UK - but it's their risk they have chosen to take. I'd rather be legal and safe here.

For some reason I always thought that it would be easier to sell soap in Europe (EU) than the USA but after reading posts on the forum about Europe, we have it easy here in the U.S.

I give you 2 thumbs up for what you are doing.

 

[AlexanderMakesSoap]

Do you have cosmetic insurance that covers soap as well?

Yes, at least as far as I know. I suppose I should double check that soap is covered!

 

[SideDoorSoaps]

I had RLI for insurance and paid $175 a year for it. It only allows up to $5k in sales and you can t make any candles to sell with it.

 

[FaebulousFormulas]

For me it's really an issue of peace of mind. I've been making soap for a good long while and am fairly confident I can catch any soap that's unfit for use before it ever got close to being sold. That said, different people react differently to different products and on top of that there are sadly some people out there who aren't above telling tall tales in order to get a nice little pay day for themselves. I know that i probably wont ever have to use it, but I wouldn't feel comfortable selling soap without it.

 

[Kathymzr]

I would like to know if homeowners umbrella policy would cover folks who give away soap to family/friends only. —much like dog bites are covered? If I always include a card on ingredients and proper care of the soaps. Very little soap giveaways so far. Also, would bartering be considered selling? Any thoughts. I appreciate it!

 

[cedarstar]

I live in Canada and I sell at our local market. Our market has liability insurance to cover us. As I decide to "spread my wings" I will be looking for affordable insurance options. Until I have insurance I won't place soap in our local stores or approach other businesses.

 

[janeth]

In the UK and I've got insurance here - public liability and product liability. I also have cosmetic safety reports for the few soaps I sell. It's quite a costly process so only have limited ones I can sell eg. six variants. I wish I could make loads of different scents and types to sell but it's in my nature to be safe and err on the side of caution (ex health professional here) It annoys me when I see people selling all sorts of soaps without any cosmetic safety reports or insurance here in the UK - but it's their risk they have chosen to take. I'd rather be legal and safe here.

Hi, if you don't mind me asking, who are you insured with? Thanks

 

[Jennifer Gray]

I originally had mine from State Farm, but I finally decided to go elsewhere because they wanted $800 a year, and I could get it cheaper through HSCG and HSCG will also cover my candlemaking. (Not all handmade insurance's would - State Farm did but it ended up being too expensive)

Megan, who is HSCG? thanks

 

[Jersey Girl]

Megan, who is HSCG? thanks

https://www.soapguild.org/

 

[cmzaha]

I have always had insurance and used HSCG. The problem with using a company like State Farm under your homeowners is if there is a problem they just may decide you are manufacturing and suddenly you are not actually covered. My home has been covered for several years by State Farm without them ever knowing I made soap. When our agent retired one of the office staff, which is who I always dealt with asked me to bring in some soap, which I did. the new Agent jumped on it and mentioned my manufacturing soap at home and started all kinds of questioning, I simply stated no I do not make it at home but offsite. At the time I actually did make it at another location. It could get messy.

As for acquiring an LLC Corp, not me. I have a very low opinion of any Corp whether LLC C or S. They just do not give all that much protection even when assets are kept separate, especially when it is a small family-owned S Corp. Ask me how I know. Companies will still require personal guarantees even for corporate credit cards then when the economy crashes and everything falls apart they go for judgements. Yet, I still have one hanging over my head. We have had a C and S corp, neither helped us at the end of the day. So have good insurance.

 

[TheGecko]

The problem with using a company like State Farm under your homeowners is if there is a problem they just may decide you are manufacturing and suddenly you are not actually covered.

Or if there is a claim, you can see a raise overall or lose all your insurance.

At the time I was purchasing our Renter's Insurance (Farmer's), our agent was just going to go with a base coverage, but I told her that it wouldn't work because the replacement coverage was insufficient to cover my husband's music equipment and his tools, my equipment for my business and my hobby (I have a lot of $25-$30 skeins of yarn and high quality needles and hooks). A LOT of questions later, it was determined that we could simply raise the coverage without any 'riders' and/or separate policy. Hubby wasn't playing professionally anymore and my office equipment wasn't much more that anyone might have in a "home office" and I didn't have any foot traffic. I have not mentioned that I now have a soaping business.

It's been a couple years, but Katie with Royalty Soaps got into trouble with her soap studio and then couldn't find a place in town. The use of Sodium Hydroxide was just too 'dangerous' for residential or retail zoning.

As for acquiring an LLC Corp, not me. I have a very low opinion of any Corp whether LLC C or S.

There are advantages/disadvantages. And past abuses of the personal protections have resulted in the need for personal guarantees as millions of dollars can be lost when a business fails.

 

[AliOop]

As mentioned previously, the big disadvantage in of an LLC in CA is the $800 minimum tax. You pay that even if your LLC earns nothing. And if you are an LLC in another state and sell one bar of soap to someone in CA, by law you are supposed to register your LLC to do business in CA... and pay the minimum $800 tax, of course!

For most folks who don't have tons of assets, it's much better to operate as a sole proprietor and spend some of that money for good insurance that covers defense costs. However, that's something for you to discuss with your lawyer or tax professional. You need someone qualified to review your specific situation, in your specific location, to come up with the plan that is best for you. And then review it often as things change, and the plan may need to change, too.

 

[SoapLover1]

Just a tip. Insurance through HSCG offers Insurance and I got mine for $500/yr. The Best Money you will ever spend. Always get your Business License from your County. The Penalties are outrageous and definitely not worth it! If you are an Single LLC but files as a Sole Proprietor, you do get protection from Lawsuits.

 

[Tracy von Elling]

I live in Canada and I sell at our local market. Our market has liability insurance to cover us. As I decide to "spread my wings" I will be looking for affordable insurance options. Until I have insurance I won't place soap in our local stores or approach other businesses.

I am also in Canada and have been wondering about insurance. Can I ask where about you are? I am in Alberta. I am only giving away soaps at this point but do have my concerns without insurance.

 

[Peachy Clean Soap]

A lot of people think that the first thing they need to protect themselves is an LLC. As an attorney, I can assure you that is not correct. An LLC may protect you from having to pay a final judgment out of your personal assets, but even that is not a given if you don't strictly follow all the rules about keeping your business and personal assets separated (different bank accounts, no commingling of funds or supplies, etc.).

More importantly, an LLC does nothing to help you pay for the lawyer needed to defend yourself against any lawsuit that is filed. Believe me, the lawyer bills will bankrupt you just like any court judgment, and often much sooner in the process. In contrast, good insurance will pay for the cost of a lawyer to defend you, so you are not out of pocket during the course of the lawsuit. And good insurance will also pay the cost of the judgment, thereby protecting your personal assets up to the policy limits.

Another issue with LLCs is that some states have minimum taxes for an LLC. For instance, an LLC in California must pay a minimum annual tax of $800, even if the LLC doesn't generate one dime of income. That's more than some people make from their soap business. Most other states don't charge as much, but in many of them, opening an LLC will generate ongoing costs that far exceed the small cost of establishing it.

For all of those reasons, I try hard to educate people that the FIRST thing to spend on in your soap business is insurance, along with a paid consultation with your tax advisor or legal advisor to ensure that you are following all the local, state, and federal business laws and regulations, including collection and remittance of sales tax, filing of sales tax returns, etc. Your personal financial picture is not like anyone else's, especially if you don't live in the same place as another soaper who wants to give you advice about this. If you are seriously considering selling soap or other body care products, or anything for that matter, you will save yourself a lot of grief by paying for a consultation to ensure that you are doing things properly. That may not have been true in years past, but I can assure you, it is true now.

Wonderful advise'