Is it really necessary to have insurance when selling soap?

[citymouse]

I look at insurance this way. It's protection. For you and for the odd person who could have a problem. Yes, there those folks that make insurance necessary because they are somewhat dishonest. But there's the flip side of sometimes a good someone may have a terrible reaction and come to you expecting to be compensated for their pain. I would like to be able to turn to my insurance company in order to be able to help the good person who had a problem.

Before i started to share my soaps and other products i got insurance because I was not comfortable letting those i cared about most use my products without being covered because i would want to be able to protect those i love most.

 

[Hazel]

She did get third degree burns but not massive - 6%. I'm not denying she didn't suffer from the burns but if the coffee was that hot, why didn't she feel the heat from the cup. I used to travel extensively for my job and I would buy coffee from McD's. I could feel the heat from the coffee through the cup when they handed it to me. If you can feel the heat through the cup that should be a tip off that the coffee is hot, hot, hot!

some just needs to be balanced out with common sense.

Common sense - as I said earlier, oxymoron.

I agree if it's just a "hobby" business than it's doubtful a person would need insurance. But if someone wants to create a business as a professional and sell online, go to markets and shows; then insurance is a must. I'm just saying people need to protect themselves. You never know what will happen.

 

[dirrdee]

I ran my own LLC company previously and all that does it keep your personal assets being taken if someone does sue you and wins. You still are liable as a business owner but if the business doesnt have any assets the person suing wont get much.

A moderately priced lawlyer will charge somewhere around $1K to file the paperwork for your business to be registered as an LLC. You can also get them to file trademark paperwork at the same time, protecting your logo/name. I had a fairly cheap lawyer and he charged me $800 for both. You still need insurance tho, as you still are the owner of the company and are liable...you could lose your business assets.

I should mention that once you file as an LLC you will need to do quartly reports (PIA) and yearly filing to the state (depending on where you live) and pay sales tax based on your estimates for sales, whether you sell or not.

I wouldnt do this to try to protect your self unless you are really operating a business as I am sure there is liability if the filing is fraudulent.

 

[Maythorn]

I'd not heard of any soapmakers being sued but it's always possible. Of course the plaintiff would have to win or else be stuck with attorney's fees and court costs. And how to prove it was your soap that caused harm and not something else they applied or ate or whatever? There are many good judges who can spot a frivolous suit and then there's ones who might not.

 

[Hazel]

Where's Judge Judy when you need her? :roll:

 

[paillo]

i'm too damned scared of our litigious society not to be without insurance. i too got mine through rli at what i think is a more-than-fair price. it provides me peace of mind in case anyone slip while in my farmers market booth or decide their allergic reaction is caused by my soap, when in fact it could be caused by multitudinous factors. paranoid? probably. worth the cost? definitely.

i totally stand by my soaps as being really good for the body and the planet. that said, there are people allergic to all kinds of things. i list every ingredient in my packaging, but who knows if someone's going to actually read the label and think about it? for me, insurance is a no-brainer.

 

[Kleine Teufel]

For the coffee incident, from what I heard, it was a little old lady. For one, the coffee should NEVER be that hot. It goes from machine to customer. My sister worked in a nursing home in the kitchen for a few years, and the coffee had to stay warm for about 1.5hrs before serving to clients (and still had to be hot when served). She has spilled that coffee on herself before without getting third degree burns. There's absolutely no reason that coffee going straight from machine to customer should be hotter than coffee that has to sit for an hour and a half. It's just ludacris. Plus, if the coffee was hot to the cup, the server should have felt it and thought something was up. When handing it to a little old lady, she may not have been able to hold onto the cup because of the heat. :/

 

[fiddletree]

For the coffee incident, from what I heard, it was a little old lady. For one, the coffee should NEVER be that hot. It goes from machine to customer. My sister worked in a nursing home in the kitchen for a few years, and the coffee had to stay warm for about 1.5hrs before serving to clients (and still had to be hot when served). She has spilled that coffee on herself before without getting third degree burns. There's absolutely no reason that coffee going straight from machine to customer should be hotter than coffee that has to sit for an hour and a half. It's just ludacris. Plus, if the coffee was hot to the cup, the server should have felt it and thought something was up. When handing it to a little old lady, she may not have been able to hold onto the cup because of the heat. :/

I think that the issue with that case (and why the woman won) was that the coffee was much hotter than legally allowed. They were breaking the law, they got caught, it wasn't just someone over reacting to hot coffee. It was company policy to serve too-hot coffee, which I find bizarre.

Back on topic, insurance is a good thing. It protects you against any mistakes you might make (though hopefully won't), and against crazy people.

 

[zeoplum]

i'm too damned scared of our litigious society not to be without insurance. i too got mine through rli at what i think is a more-than-fair price. it provides me peace of mind in case anyone slip while in my farmers market booth or decide their allergic reaction is caused by my soap, when in fact it could be caused by multitudinous factors. paranoid? probably. worth the cost? definitely.

i totally stand by my soaps as being really good for the body and the planet. that said, there are people allergic to all kinds of things. i list every ingredient in my packaging, but who knows if someone's going to actually read the label and think about it? for me, insurance is a no-brainer.

Do you know what exactly RLI requires in terms of documentation if someone were come after you over soap problems?

 

[Maythorn]

It's rerely that black and white with laws and suits. The coffee lady won but didn't collect is my underestanding of what happened but I don't know why. I can't imagine sueing a company for a product that didn't agree with me and I've had it happen. I'd need to see that something was truly defective and that other people were also objecting and coming forward to sue. What a lot of trouble and expense to take someone to court and you may have no idea what you're up against as far as the soap or cosmetic company's resources.

I don't sell and therefore I have no insurance. But most people just wouldn't use the soap again or they'd ask for a refund.

 

[Hazel]

The coffee lady won but didn't collect

She did collect. She received over 2 million.

 

[dirrdee]

Insurance is part of the cost of doing business, it is one of the things you have to add to the cost of the soap...they call that "overhead". Personally I think its careless to operate a business in the US (cant speak for laws in other countries) without it...It seems if you have a problem with paying the premiums, you might not be ready to take on the operation of a business, cause really... insurance is the easy part...IMHO

 

[zeoplum]

Insurance is part of the cost of doing business, it is one of the things you have to add to the cost of the soap...they call that "overhead". Personally I think its careless to operate a business in the US (cant speak for laws in other countries) without it...It seems if you have a problem with paying the premiums, you might not be ready to take on the operation of a business, cause really... insurance is the easy part...IMHO

I agree that being cautious and paying for protection seems almost a no-brainer. Who wouldn't want to do that? But for me, the question is, are you 100% sure of what would be required of you by your insurance company if a customer were seek legal action against you because of problems with soap? My concern is that in order to protect themselves, they would require the moon. And if you can't really live up to what they expect then you're really not insured. And the money you are paying each year is only an illusion of cautiousness. KWIM?

 

[dirrdee]

I see what you are saying, kind of like having a renters insurance policy and finding out AFTER a fire that you should have had pics, serial numbers etc on contents to get the payout on the claim...(I just found this out recently, thank goodness nothing has happened). I agree with that, do your due diligence and ask your agent!

 

[zeoplum]

Yes, precisely!

 

[paillo]

i'm too damned scared of our litigious society not to be without insurance. i too got mine through rli at what i think is a more-than-fair price. it provides me peace of mind in case anyone slip while in my farmers market booth or decide their allergic reaction is caused by my soap, when in fact it could be caused by multitudinous factors. paranoid? probably. worth the cost? definitely.

i totally stand by my soaps as being really good for the body and the planet. that said, there are people allergic to all kinds of things. i list every ingredient in my packaging, but who knows if someone's going to actually read the label and think about it? for me, insurance is a no-brainer.

Do you know what exactly RLI requires in terms of documentation if someone were come after you over soap problems?

ugh, i'm out of state for a month and all my insurance paperwork is at home, so i have no idea but will look it up when i'm back home...

 

[Maythorn]

The coffee lady won but didn't collect

She did collect. She received over 2 million.

Revisited, this is similar to what I had heard years ago although a more sympathetic POV than most people took. I should have said didn't collect all she dreamed of and wanted to soak McDonald's for. http://www.slip-and-sue.com/the-famous- ... revisited/

 

[MegaSoap]

i'm too damned scared of our litigious society not to be without insurance. i too got mine through rli at what i think is a more-than-fair price. it provides me peace of mind in case anyone slip while in my farmers market booth or decide their allergic reaction is caused by my soap, when in fact it could be caused by multitudinous factors. paranoid? probably. worth the cost? definitely.

i totally stand by my soaps as being really good for the body and the planet. that said, there are people allergic to all kinds of things. i list every ingredient in my packaging, but who knows if someone's going to actually read the label and think about it? for me, insurance is a no-brainer.

Do you know what exactly RLI requires in terms of documentation if someone were come after you over soap problems?

ugh, i'm out of state for a month and all my insurance paperwork is at home, so i have no idea but will look it up when i'm back home...

i'm also curious to know! thanks paillo!

thanks all for the info/opinions about insurance! greatly appreciated!

 

[new12soap]

Thank you maythorn for the link. We have all heard headline "woman sues mcD for being burned by hot coffee" but there was much more to the story. This story is the perfect example of beware of the teaser, there is always more to it than appears.

As for insurance, it's my understanding that if you are sued the insurance company will investigate the claim and have their lawyers handle it for you, without insurance you are on the hook for all the legal fees to fight it whether you win or not... Also something to think about. I would echo all of those who said talk to a good agent and get the facts, then decide if the cost is worth the risk. JMO

 

[ok_shaving_soap]

The coffee lady won but didn't collect

She did collect. She received over 2 million.

Revisited, this is similar to what I had heard years ago although a more sympathetic POV than most people took. I should have said didn't collect all she dreamed of and wanted to soak McDonald's for. http://www.slip-and-sue.com/the-famous- ... revisited/

I have lurked here for a while, and finally made an account to follow up on this thread.

I am glad to see more accurate information going out. The case was not a stupid sue-happy woman who wanted to get rich and spilled hot coffee on herself to create a legal issue.

McDonalds had been confronted many times about the temperature of the coffee. They had intentionally kept the coffee well above safe temperatures because the aroma of the coffee was more intense, and therefore generated more sales at a higher temperature.

Secondly, the lady did not sue for millions of dollars. She had asked for a reasonable compensation for her injuries, days in the hospital, and related expenses.

In a thread about insurance coverage, it is at least important to remember that in cases like this, it is the jury that determines the ultimate cost of penalty if there is one. The jury in this case saw the evidence, and punished McDonalds with a penalty that would hopefully cause a real change in the company's behavior.

Just because the cup said "Caution : contents hot, handle with care" or some other type of blanket statement does not prevent liability in cases where you are intentionally putting your customers at danger for your own good (more revenue).

It would be like if a soaper were to slap a warning on their packaging saying "Caution : may contain pockets of un-reacted lye" and trying to sell a customer a bar of pure lye... the little warning doesn't really count when you know you are making it dangerous.