Insurance
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PinkCupcake
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Insurance is a lot cheaper than a lawsuit! In my opinion, if you're selling soap, you need insurance.
savonierre
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before you sell your first bar is a good time to get it. Can you afford to lose your home etc because of a lawsuit?
dagmar88
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Please just put it on hold for the time being. It might seem excessive, but I can not emphasize the importance of being insured before you even sell your first bar of soap enough.
Would you feel comfortable driving an uninsured car?
dagmar88
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Here's some more info.
http://www.soapqueen.com/business/business-insurance-for-the-handcrafted-industry/
http://www.soapqueen.com/business/business-insurance-for-the-handcrafted-industry/
RLI has good rates - in my area, anyway.
ETA: it's not just for product liability either. Once you've amassed a small warehouse of ingredients, you should have insurance that covers it - just in case anything should happen. If your homeowner's decides that your 400 bottles of FO isn't just for a hobby, they probably won't cover it if you have a flood or fire.
ETA: it's not just for product liability either. Once you've amassed a small warehouse of ingredients, you should have insurance that covers it - just in case anything should happen. If your homeowner's decides that your 400 bottles of FO isn't just for a hobby, they probably won't cover it if you have a flood or fire.
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I would not sell anyting without insurance. I went wit the Handcrafted Soapmakers Guild. I did check with RLI and they were somewhat cheaper but I liked some of the benefits that came with the Soapmakers Guild.
100%Natural
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If you can't afford the insurance, you can't afford to be in business yet. I would never take a risk that put my family's financial well being in jeopardy. Even if you get insurance down the road after you've been selling for a while and a customer decides to sue you and they bought that bar before you had the insurance in place, you're in a mess. It's just not worth the risk.
Tagging onto the end here. Do you need insurance if you are still in the R&D phase and want to give samples to friends and family for market research purposes? I'm paranoid that someone might have a reaction to something.
I agree with everyone here, you need insurance.
One of the things I found out when I first started and checked with my home insurance to see if they would cover this is that if you do not have commercial insurance (this is considered a high risk liability business) then you will void your home insurance should you ever have a claim such as a fire whether or not your ingredients cause the problem. Just not worth the risk.
One of the things I found out when I first started and checked with my home insurance to see if they would cover this is that if you do not have commercial insurance (this is considered a high risk liability business) then you will void your home insurance should you ever have a claim such as a fire whether or not your ingredients cause the problem. Just not worth the risk.
Second Impression
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What would you do if someone had a bad reaction to something you made? What would you do if they sued you? Your answers to those questions will guide you towards what kind of insurance you need, if any.
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Sent from my XT907 using Soap Making mobile app
Panther if you are not selling then you don't need insurance as long as your friends and family aren't the type to sue you. I didn't get insurance until I was ready to sell, then I had it before my first venture out...
PinkCupcake
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Lindy, my friends and family would never sue me. But I worry about who they might give my soap to. Those people might be delighted to sue me!
I didn't get insurance until I was ready to sell. My family and friends knew they were guinea pigs and I just told them if they have a reaction stop using it. Fortunately after 3 years it's never been a problem.
SugarandOats
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Than what's the point of an llc?
sugar & oats
sugar & oats
From what I understand, an LLC protects your personal assets by setting up a separate business entity. You would still need insurance to protect your business assets. I don't know what would happen if someone sued an LLC and was awarded more money than the business had. I assume you would have to make up the difference somehow. Better to have insurance and be covered just in case.
Believe me a corporation will not keep you safe from everything. Problem today is the fact even if you set up a corportion much of what you do, insurance, bank loans etc will have to be personal guarantee, so I do not find them much help. In fact I hate corporations with a passion. Get your insurance for at least a million and move on with your business. My insurance is purchased from The Soap Guild. They are great to deal with and no limits how much I make. From what I read about RLI their less expensive insurance is geared to crafters and you are limited on yearly sales.
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.
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.
