Insurance

[Moody Glenn]

Hello everyone! I agree that everyone that sells should have insurance. Having a LLC does protect your personal assets but insurance also helps protect your business assets and strengthens that you are serious in having a LLC. If someone wants to sue you they will have to prove that you deliberately planned or deliberately produced a product to specifically harm them. That proof is for them to show to a judge and jury - not a simple thing to do and honorable lawyers discourage this type of knee-jerk reaction. If someone sued you they would have to prove you knew that the product was dangerous to them and others. Let's say a particular fragrance oil caused them to have a serious allergic reaction that caused them to go to the ER. Did you know that FO would cause this reaction to this person? No - how could you? That is your solid defense. And my LLC lawyer explained to me that your LLC business could then legitimately counter-sue that individual. That scares the daylights out of many potential sue-happy individuals.

Always make a skin safe product with recorded information. Create a safe recipe, measure correctly, test several times, label correctly, add a disclaimer about possible allergic reactions, package safely and then RELAX- you made a good product to the best of your ability. Always keep a log on each batch. What was made, how much, what date and time and what supplies and suppliers were used. If you feel a product is "not right" don't sell it and trash it. Determine what went wrong in making it and record that info - don't trust your memory. These logs can show that you are careful in making your products, your not out to harm people and goes a long way in protecting you and your business. As for the person trying to sue - he or she will have a tough time proving you are out to deliberately harm him or her.

 

[SugarandOats]

Very well said glenn! So what or where do u recommend getting this kind of insurance at? So I can literally cover my rear end

sugar & oats

 

[FGOriold]

Actually it is my understanding that an LLC will not protect you or your personal assets if you, as the owner of a company, are found negligent. An LLC is typically to protect a business from money owed to others such as creditors. Liability insurance is essential.

Additional info:
If you form an LLC, you will remain personally liable for any wrongdoing you commit during the course of your LLC business. For example, LLC owners can be held personally liable if they:

• personally and directly injure someone during the course of business due to their negligence
• fail to deposit taxes withheld from employees' wages
• intentionally do something fraudulent, illegal, or reckless during the course of business that causes harm to the company or to someone else, or
• treat the LLC as an extension of their personal affairs, rather than as a separate legal entity.

Thus, forming an LLC will not protect you against personal liability for your own negligence, malpractice, or other personal wrongdoing that you commit related to your business. If both you and your LLC are found liable for an act you commit, then the LLC’s assets and your personal assets could be taken by creditors to satisfy the judgment. This is why LLCs and their owners should always have liability insurance.

 

[SugarandOats]

Thank you everybody! The things they don't teach you in school! Thx again!

sugar & oats

 

[Lindy]

Actually to be able to sue successfully all they have to show is negligence. So if your recipe isn't safe (no preservatives for instance) then you have been negligent and they can sue you successfully.

 

[Nevada]

Will anybody EVER say that you don't need insurance? No of course not.
It's easy to sue someone, and get a judgement.
But collecting a judgement is the hard part.

 

[SugarandOats]

So putting chemicals in your things is safer?

sugar & oats

 

[dagmar88]

So putting chemicals in your things is safer?

sugar & oats

Using preservatives appropriately is, yes.

 

[Jencat]

So putting chemicals in your things is safer?

sugar & oats

From what I've read, if you are making a product that can spoil and thus cause injury to people you are much better off using a preservative. I believe in using natural products as much as possible, but if I starting making products that contain water (like lotions) or products where water is likely to be introduced (like bath scrubs) I'll use a preservative. So far, I'm just doing soap, bath salts and bath bombs.

 

[shunt2011]

Using preservatives in creams, lotions etc is important unless you want to risk a customer getting a horrible bacterial or staph infection from using a bacterial moldy infested product product. Just because you can't see or smell nasties doesn't mean they are not there. Why take the risk is my personal belief.

 

[Lindy]

In my opinion I feel it is my responsibility to make products that are safe for my clients to use. I don't believe in jumping on whatever the fashionable bandwagon is for this week and believe in common sense. Common sense tells me that there is a balance to be found between science and nature, by finding that balance we protect ourselves, our loved ones and our clients. Everything is made up of chemicals so it's not a bad word, nor is it one that is nasty. If you eat processed foods you're eating chemicals. If you buy bread, you're eating chemicals, if you use margarine, you are using chemicals. Be smart about it and know that not all chemicals are bad.

 

[jcatblum]

I just wanted to add that every state the law is different. Less than $100 and anyone can file a small claims case (I think $6000 or less in damages here is small claims). Most cases is one persons word against the other. Outcome depends on the judges mood IMO.

 

[SpiralTouch]

Yes - I don't get the small soaper becoming an LLC either. If you're getting sued, they'll look at your corporation and see that you are the ceo, your husband is cfo, your best friends are your "board". Won't take long to realize that they are still going to sue YOU.

I don't think small soapers get sued with any regularity, but for $200-300 a year for insurance, it's totally worth it. And again, you need it to cover your "warehouse" and inventory.

Mind sharing who you went with to get insurance that affordable?

 

[angelsthreeinc]

As a newbie I am so grateful for the information that was shared by more seasoned soapers! Thanks a word to the wise should be sufficient!


Sent from my iPad using Soap Making