When I launched IBN in 2000, there was a small but growing number of people making soaps, cosmetics and other consumer products in very small quantities. With the explosion of the Internet and the availability to everyone of multiple e-commerce opportunities, micro-manufacturing in many markets has grown tremendously. Up until 2005, Illinois-based RLI Corp. provided products liability insurance coverage for IBN members at very reasonable rates. In late 2005, however, they sent form letters to my members telling them that their insurance policies would not be renewed if they grossed more than $5,000 a year in sales.
Despite my written and verbal appeals, they would not budge, stating a desire to insure “hobby business owners” (whatever they are), and stating that micro-industries had grown to sizes they were not set up to accommodate. Thus began a search for a company that would cover IBN members. Finally, in 2006, Stratus Insurance Services, Inc., came along and brokered a program that offers products liability insurance to my members who make handmade soaps, cosmetics, candles, fragrances and aromatherapy products. Rates are the best available on the market today: $395 per year for $1 million in coverage or $450 per year for $2 million dollars in coverage.
Today, I am pleased to announce the expansion of the program to cover handmade candies, cookies, cakes and other confectionery items!!
The insurance includes some property coverage, and additional property coverage can be purchased. A professional liability endorsement is also available for people who teach others how to make handmade products. The broker for the program is Stratus Insurance Services, Inc., in American Fork, Utah, just outside of Salt Lake City. The insurance carrier is Great American Insurance Group. Great American is an A rated carrier.
How Having Products Liability Insurance Helps Your Business
If you already have products liability insurance, you know how valuable it is because it contributes to your peace of mind and also provides part of the documentation you need to sell your products at most of the nation's retail stores.
The program offered through Stratus covers all kinds of handmade products, including candles, aromatherapy products, soaps, jewelry and any kind of cosmetic as defined by the United States Food & Drug Administration.
Sweets and Confections Now Covered!
Effective immediately, I am pleased to announce that Stratus has expanded our program to include coverage for confectionery items! That's right, now you can get affordable products liability coverage for handmade cakes, cookies, brownies, pies, jams, jellies caramels, taffy, hard candy and all of the tasty treats your customers love.
How Your Insurance Certificate Helps You Present A Professional Image
It's true that products liability insurance gives you peace of mind and helps you expand your business, but did you also know that there are other things you can do with an insurance certificate that can make it easier and more efficient for you to position yourself for increased sales? Here are a few that anyone can do.
- Display Your Insurance Certificate At Trade Shows. When you're at a trade show, you are competing for retail sales and retailers at trade shows don't have a lot of time to waste. Why not have a notebook containing the formal business information you need to substantiate your business to established retailers? You never know what a buyer may want to see (and see quickly) in the way of business validation, and since so many of them require proof of products liability insurance as a condition of purchase, maintaining easily accessible copies of your insurance certificate shows that you are prepared to serve them.
- Cold Calls. You never know when you'll pass by a retail store, spa or other location where you'll have an opportunity to showcase your products. Carrying a copy of your insurance certificate in a professional branded binder or portfolio keeps it at the ready and makes the all-important, “I'm prepared” impression with potential buyers. It can also be handy to have on hand just in case potential collaborators or joint venture partners inquire about whether you have coverage for your business and/or products.
- Online Wholesale Customer Inquiries. While most retail customers buying online do not think to ask whether a company carries products liability coverage, you can post the fact of your coverage to a Frequently Asked Questions page in your password protected wholesale area so that prospective wholesale buyers can see for themselves that you are prepared to handle their business and that there is one less detail to worry about when it comes to doing business with you.
How To Get Coverage Now!
It's easy to procure products liability insurance through the Stratus program. All of the program details are here. When you complete the IBN membership application, you then fill out a short insurance form, pay your membership dues and premium and your insurance certificate is emailed to you in seconds!
Remember that IBN is not the insurance broker or carrier for this program! We are merely serving as the conduit to make it easier and faster for you to get the coverage you need. The program details are explained here, and that link includes the contact information for the broker if your questions are not answered on the page.
Question: Do you have questions about products liability insurance? If so, ask in the comment section below or visit the “Making Sense Of Insurance” Group at our social networking site.
