# Product Liability ?



## Guest

It appears that I am getting some interest around here now with businesses wanting to carry my soap. So, I need some advice in the product liability area.

1. How much personal concern should I have ?

2. For those who carry it, what do you pay in (product liability) insurance premiums ? ....or what should I consider as a reasonable price ?

3. If this takes off here, should I incorporate to protect my personal assets ? 

Any other advice in this frame of thinking would be appreciated. This is starting out very slow, and profits are minor right now......so no way I could afford to pay out much in premiums at this time.

Thanks,

Whim


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## tmfinley

I would like some information in this area too. I have looked around and liability insurance is really expensive but I really feel the need to get some soon.

Tiffany


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## jimandpj

I talked to a couple of insurance agents. Simplest and easiest thing is to join the soapmakers guild - www.soapguild.org $480 gets you product liability - I've been pleased with it.

PJ


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## buckrun

This topic always makes me sad. I keep wondering why people don't ever take responsibility for their own decisions any more.
Lawyers are the real reason but life was so much simpler before we became a society that blames everything that happens to us on someone else. My attitude is if I bought it - and something happens- I am responsible because I was supposed to make myself aware of what I was buying. Sad sad sad. Trying to protect yourself from someone who wants to make money on their own poor decision making.....
Best luck Whim- go go go and just shoot any one that does not love the stuff- I mean if they are gonna get upset - give em something real to get upset about ( see previous thread can we talk guns hahah)
Lee


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## mamatomany

What about doing a LLC? It costs about $110 and the liability is limited to the corporation not personal liability at all. So if someone sues you, the only assetss you have are your soap stuff  which for me doesn't equate to a whole heck of a lot!


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## Sondra

All I can say is they wouldn't get much if I got sued


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## Kalne

From what I've read, the LLC doesn't hold up and I haven't seen it recommended. BUT I am no expert. I've just come across that repeatedly enough to make me not consider it.


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## Guest

I think I'm starting to see the light here,,,,,,few if any are carrying any insurance at all on the handcrafted soap. I'm wondering if a "disclaimer of liability label" would have any significance at all if things were to go wrong for some reason.

I'm not too concerned about actually cause harm to someone......I'm more concerned about these sue happy "artist" that go looking, and with a "lawyer" make a living off of this "practice". 

Whim 

PS ...Sondra.....they wouldn't get much off me either.


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## jimandpj

Whim - I would disagree that many aren't carrying insurance. $480 for annual insurance comes out to $40 per month. If you're serious about your soaping, you shouldn't have any difficulty making $40 a month.

My research would also show that an LLC doesn't necessarily protect you. Since you are the soapmaker and you are intimately tied to your product, somebody could sue not just your LLC, but could also name you as an individual, and there are cases out there where different judges in different states have found the owner of an LLC liable (or so I have been told).

Sondra - it also isn't just an issue of what you have they could take now. They could also take your future. They could garnish your wages going forward. 

The fact is, we do live in a litigious society, and the purpose of insurance is to protect us against an unlikely but possibly devastating possibility. It is not something to take lightly.

Just my 2 cents,
PJ


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## adillenal

I joined the soapmakers guild to get the insurance. Right or wrong I feel I should have product liability. I am starting to do larger shows that require insurance also. 

I am sure someone could make soap and sell for a lifetime and not have a problem if they weren't insured but I prefer having the insurance. I insure my house, cars, health, life, boat, camper, etc so what is a little more insurance for my business.


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## Sondra

jimandpj said:


> Whim - I would disagree that many aren't carrying insurance. $480 for annual insurance comes out to $40 per month. If you're serious about your soaping, you shouldn't have any difficulty making $40 a month.
> 
> My research would also show that an LLC doesn't necessarily protect you. Since you are the soapmaker and you are intimately tied to your product, somebody could sue not just your LLC, but could also name you as an individual, and there are cases out there where different judges in different states have found the owner of an LLC liable (or so I have been told).
> 
> Sondra - it also isn't just an issue of what you have they could take now. They could also take your future. They could garnish your wages going forward.
> 
> The fact is, we do live in a litigious society, and the purpose of insurance is to protect us against an unlikely but possibly devastating possibility. It is not something to take lightly.
> 
> Just my 2 cents,
> PJ


Oh I know and was just joking with Whim. I don't have insurance at this time because I don't sell anywhere outside my milk house. If and when I start getting into stores and doing shows then of course I would have ins.


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## Guest

That's just great......all I need is to spend another $500 a year on insurance so that I can make $20 every now and then. I think I'm gonna give it up before it goes any further here......just not worth the risk for me......and in this economy, ain't worth the $500 up front cost. I clean Christmas ahead for a few folks...  

Thanks for the input,

Whim

PS.... I still say not many carry this insurance, or not many read this thread. Look how many soapers we have, and how few spoke up.


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## jimandpj

Yes, but many soapers just soap for themselves, and don't sell their soap. 

PJ


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## MiaBella Farm

I don't currently have any insurance and it is mostly because of that price tag. Now, I did not know that joining the soap makers guild provided this...so I'll need to do some research on that.

A lot of craft shows will ask if you have this insurance, so you either don't participate in those or you get the insurance.


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## NubianSoaps.com

Does anyone know anyone who has used the Guild's insurance? Cheap isn't the point. And I agree, few even test their tolietries, know the science behind the soap they make, let alone have insurance.

I have a rider on my farm insurance, the only reason I have it is for my two shows and one chain...all of which make you carry insurance. LLC does nothing for you that already living in Texas with your place homesteaded already does for you. And like everything else in Texas, sure sue me, get a judgement, not even a judge can get into my purse or bank account to make me pay you. Know your state laws. Vicki


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## Faye Farms

I don't carry insurance either. It's not a matter of not wanting to though. Right now it's a matter of survival. We had been making a living selling our milk commercially. Right now there is a crisis going on in the dairy industry. The coops aren't paying enough to cover farmer's cost of production and they haven't been since last winter. I've been paying the bills and feeding my family with my soaping money. There isn't any money left over for anything else.


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## adillenal

Well, I guess I am fortunate that my goats were self sufficient last year due to the goat milk soap and that included paying insurance and having a website done for me as well as the hosting. BUT I am not using the proceeds for anything but buying more supplies and goat feed, hay etc. Oh and paying booth rent upfront. 
But I am doing several large shows that require insurance so it is worth it to me.


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## Kalne

LaNell....I love your website! I was looking at them but decided to let my ds try his hand at it.


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## buckrun

Sure sorry to hear that Heather- reading a lot about the dairy crisis. People need to wise up and pay what it's worth! All the smaller farms are going under and that is just too sad. Brilliant of you to get the soaping going so strong to fill the gaps.
We don't carry product liability insurance and don't do shows that require it either. It's a protest. Remember that line from Shakespeare And first we need to kill all the Lawyers.... And the Ace song- How long has this been goin on? I think it's about time we stop letting them run our lives. The way we do business now is all based on fear of lawyers. It is driving costs and determining who can survive in commerce. Hopefully soon people will do the pendulum thing and go back to teaching kids about taking responsibility for their own decisions so they will become adults who do and cut the lawyers out of the middle of our lives. 
Hang on Heather!
Lee


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## jimandpj

Vicki - we had our tent destroyed by a storm during a show. Some of our product was destroyed also from rain damage when the tent collapsed. I am in the process of claiming that now. So far, they have been very responsive and easy to work with. I still haven't finished my part of it, but I'll try to remember to update everyone once it is done and I get my check. There is a $100 deductible, and I'll probably be claiming about $600-$800. 

At another show I was recently at, there were severe wind gusts. My tent (despite being weighted down with concrete weights), began to blow over. I dove and caught the front leg, and my neighbor vendor caught the back leg. It was crazy. Afterwards, I thought to myself that if that tent had blown with 80 pounds of concrete attached to it, it could have hit somebody and seriously injured them. Or it could have taken out another vendor's stuff. I was really glad to know that I had insurance for that sort of thing, although it was nothing I had really thought about before.

PJ


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## SherrieC

Oh my gost PJ how scary. I'm glad nobody was hurt.
I carry liability insuranse on my business. I have to for the larger places I sell. I don't think I'm covered for loss of my product due to rain, or accident. But I have a million dollar policy for....idiots, or accidents. Of course I think the first time I have a claim against it I would be uninsurable and thereby would need to close the business.


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## adillenal

Thank you Kathy. I made my first website myself and it was adequate but I kept thinking I needed a professional when It took me so long to add and substract products. This website has a simple template that is used for adding products and pictures. Easy easy and quick. No that I have it the hosting is reasonable per year and if I want something extra done she is reasonable. 

PJ - I think I carry full liability insurance for the reason you cited. I had a professor several years ago that disappeared from our class for several months. When she returned she showed us photos from her accident with a tent at a big farmers market in Austin. Seems a wind gust picked one up and hit her in the face. Months of plastic surgery later she was able to return to work. I have my tent weighted and I despise dragging those weights in and out of my vehicle. But I don't want to face the alternative.


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## NubianSoaps.com

LaNell can you share with us who you are using? Vicki


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## Guest

Just to let you folks know, I'm still looking for solid answers to my original post here. I've been contacted by another business now that is very interested in carrying my soap as a product, but have given them a short answer until I can get this liability thing worked out.

I've also been kicking this soap makers guild "insurance" thing around in the background a bit. I'm not knocking the guide, but can't seem to find where the "insurance" has ever paid out a dime to any claim......in other words, I can't find a track record where the guild has been tested for liability strength.......in fact, I'm hearing "rumors" of significant problems in the past. 

I'm taking your advice too Vicki about knowing state law.....it does appear to change from state to state, and even LLC is defined and liable differently. 

To be honest, I'm having a hard time finding anyone who knows much of anything concrete when it comes to this subject. Lots of assumptions of "protection" for this or that reason, but I have my doubts that the fine print has ever been read.

If I find any solid answers, I will be back here to post them. Thanks for all the input to this thread.


Whim


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## MiaBella Farm

Whim, I have my soap in a few different stores and they did not ask me to provide product liability insurance. Are you just trying to be prepared in case they ask or have they already stated that having the insurance is a requirement? Just curious...


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## Sondra

check on adding it to your farm policy or home policy. But like Michelle says many don't even require ins.


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## Guest

Michelle

The stores are not interested in the insurance part, but keep in mind that the main product liability is not on them, it's on the maker of the product. I'm mostly concerned with the C.Y.O.A. part. (cover your own ass)

Update.......been on the phone with several this morning. I have come to the conclusion that few if any carry product insurance policy for their home crafted things that they sell. Even the state ext office guy that wife does goat milk soap and sells it doesn't carry anything but a farm accident policy......which making or selling soap is not accidental. When I questioned him about the soap makers guild thing, he also questioned about how legit the insurance part of it really is......he seemed very skeptical, and this is a guy who has been doing these type "workshops" all over this state for several years now......soaping, cheese making, the works.

His conclusion is, that because goat milk soap is not a food product or a cosmetic, that the liability would be very limited at best. He does list all of his ingredients over 5% on his label though......just as a precaution to someone who may have weird allergies to particular things.

I'm still waiting to hear something more concrete from my insurance agent, but have done been told that it would take a team of lawyer's to figure all this out to where it was "cut and dried"......yep, just what I'm trying to avoid.....a team of lawyer's... :really 

Sondra.......to answer your question......it's kinda like I stated above.......these farm policies are accidental policies for the most part, and will do very little if any good when it comes to protecting you from product liability. At least from what I'm finding out up to this point......many are fooling themselves with thinking that these "farm policies" or rider type things actually cover liability for a product that the sell. It's down in the fine print when you get to digging deep enough. Even my agent admits that you would have to fight tooth and nail to get them to pay a claim on something like this.

I'm still digging for a legit answer to my questions, but am running out of reasonable effort now. I think I'm just gonna have to make up my mind whether or not to either fish or cut bait, and whether I want to do it at my own risk or not.

Whim


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## MiaBella Farm

I understand the CYOA :biggrin

I also list my ingredients and when talking to customers let them know what is in the soap in case of allergies like you said. I also tell them what I hear from others but do not make any promises as to what my soap can or will do for them. 

Good luck on your quest and please keep us posted on what concrete answers you do find.


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## buckrun

Dog with a bone- you are shanghaied for my next research project!
Really great to see how you are following up on this. Thanks for keeping us all in the loop.
Our daughter is a massage therapist and she is supposedly covered by her guild as well but like you mentioned can't find much in the way of followup on those promises. Just do it - any trouble- call Billie - together you two can take any trouble makers out! haha
Lee


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## NubianSoaps.com

I still think you should get the written info from the guild and take it to your insurance agent/friend. And mine is not a rider for the shows it is a bond, sorry. I have a copy of my rider coming to me since our conversation you have me wondering now also  Vicki


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## mamatomany

I sent this question off to my sister who is an attorney, as she said an LLC limits the amount of exposure to only the business itslef. Unless of course your acting negligent or your a liar or a crook in which case there are loopholes. I don't make enough money in sales to support any additional costs so I would think for me, the LLC will be sufficient.


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