I recently received this question from Karen. The question is a serious one involving business and liability insurance. My response to her is below the question.
hi! say i want to make a real strawberries and cream soap(actually i did in Mexico where there are few rules and regulations for soap making;it was a delicious, yummy, creamy bar and no one had any trouble with it- i made a sign saying real strawberries and real cream were in each bar) here in the states and i put all my ingredients on the label. the person breaks out with a rash due to an allergy to strawberries. if i put all the ingredients on the tag,why then, liability insurance? wouldn’t that be up to person to read the label or maybe they didn’t know they were allergic up to that point? i realize insurance is important but isn’t it part of the responsibility of the customer to read the label first? my question may sound silly but just how valuable is liability insurance?? thanks, Karen
Thanks for your note.
If a person breaks out in a rash due to an allergy to strawberries, you could be liable. If a person breaks out in a rash due an allergy to soap, you could be liable. Even if they KNOW that they are allergic and still use the product, you could be liable.
The realities of this happening are slight as most people need to ingest strawberries in order to get an allergic reaction to them. In the 10 years that I’ve been selling to over 29,000 customers, I’ve never heard of anyone being sued *but* that doesn’t mean that it couldn’t and won’t happen.
Our society can be quite litigious when it wants to be. That is why basically all food now says “Processed in a facility that processes nuts” whether it has been or not because the general public has proven itself to be not responsible for reading ingredients labels.
In theory, if common sense law ruled the world, yes, the customer would be responsible for their own actions but when you read about buglers suing home owners for injuries sustained during the burglary, you know that the legal system has gone a bit amuck! =)
The best way to protect yourself against frivolous claims is to make good, safe products and to get product liability insurance. Two places to buy insurance specifically designed for soap and candle makers are: Handcrafted Soap Makers Guild www.soapguild.org has insurance for about $450 per year. Indie Beauty Network also has insurance for $395 per year through a broker. Click here to find out more details about IBN’s insurance.
It is better to be safe than sorry, I totally agree! You owe it to your family to not jeopardize your house or possessions through a frivolous lawsuit so insurance is definitely an important component of setting up a business.
I’m so happy I was able to get liability insurance through my homeowners insurance company. And it is very reasonable. Everytime someone asks me about liability insurance when making body products I always think of that starbucks lawsuit I heard about. Where someone spilled their coffee on their legs while driving because she wasn’t paying attention. She apparently sued starbucks for the coffee being too darn hot and she WON! Thats just nuts. Always better to be safe than sorry.
I don’t think you rambled, Joanna 🙂
It’s just a sad reflection of our society to day, isn’t it? The way we pass the blame to others. An LLC would be a good idea, too, rather than sole proprietorship on the business license.
Thank you for your insight, Anne-Marie! We have liability insurance and everyone who sells any product that goes in or on the body/skin should protect themselves from litigation. It is scary, but do you remember the McDonald’s nightmare with that lady who sued McD’s becasue she spilled her own coffee on her lap and burned herself?
I am a true libertarian (however unpopular that may be), I believe everyone needs to be responsible for themselves and their actions, but I believe in protecting whatever fortune or pile of soaps one sells in the process.
Did I ramble?