Teach Soap

So... I received a quote from RLI for doing the minimum policy to be able to sell soaps on a fairly small scale and possibly someday do etsy or craft shows. I'd love to sell my soaps on a small scale to friends, family & possibly an occasional craft show/fair. I have a question for those of you with in-home soap businesses. Is it necessary to run it by your homeowners insurance agent if you're starting a business in your home? Also, if your company allowed you to proceed w/ an in-home soap business under their homeowners coverage, do you mind sharing the name of the company (carrier)? Thank you!



~Karla

I have been working from home for 30 years. I have never seen a homeowners policy that would touch business liability. If RLI doesn't work for you, maybe check into the Soapmakers Guild. Their policy not only covers soap, but most handmade items.

I did talk to our insurance carrier but never went in to discuss it further. He did say that additional homeowners insurance would be necessary because if someone came to my house to purchase a bar of soap and fell who would be responsible. A regular homeowners coverage could dispute the claim. Since I still am along way (if ever) from being willing to sell I did not pursue this any further.

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Susie
Sometimes A Mistake is so much fun, You just have to do it again!

I understood my agent to say the insurance carrier company is not willing to take the risk and even continue my homeowners coverage if I choose to operate this business in my home...even if I have RLI or any other separate insurance. I think because if I get sued, my homeowners would ultimately be effected because of soap being made in my home. I'm still not willing to give up on this. May ask that my agent check with other carriers for me. Also wonder if I was to do my business as an LLC instead of sole proprietor...maybe that would help?? ...idk! So frustrating. I'm so not smart when it comes to this insurance stuff! My hubby just doesn't think it's worth pursuing and thinks I should drop it...and just not sell my soaps. (Of course that makes me all the more determined to figure something out...)

O.K. ... If you are talking about a business where customers are coming into your home to conduct business, you probably need to talk to an insurance agent that specializes in business insurance. I had a policy in Arizona through Hartford that covered my home based business as well as the structure.
I am in West Virginia now and only have my office in my home and travel to my customers to conduct business. I have a standard homeowners policy but carry auto insurance that covers business use of my vehicles.
If I were in the soap business (which I am not), I would also purchase product liability insurance such as what RLI offers or an umbrella policy that specifically covers your product.
Zoning laws may also be in play if customers come to your house.

It is much easier if you only sell at shows or online.

I agree there's a huge difference between making the soap at home and selling it online or at craft shows, and actually having people come to your house to buy it.

After reading the poll thread about business insurance, I looked at what USAA offers (it's who we bank with and have other insurance through) and saw all the different kinds of small business insurance there were. Having insurance to cover people hurting themselves on a business property is totally different from having a policy that just covers if someone gets a rash and wants to sue you or something.

Homeowners insurance wouldn't touch someone else getting hurt in your home because you were running a business. Too much risk for the kind of stuff they typically cover. I mean, some companies won't even cover you if you have a certain kind of dog or if they find out you keep a lot of fabric around (like if you quilt or make garments, it's considered a fire hazard and is too risky for some companies) It can be very fickle.

Even if you're not going to have people coming to your home as a place of business, I could even see some insurance companies having a fit if they think you keep too much lye on hand.

USAA is more lenient about certain things, they just charge more if they think you have or are doing something with a higher risk. However I'm not sure who all would be able to get insurance through USAA. I know everyone can bank with them, but I think there might be restrictions on who is allowed to use their other services. If you have to shop around though it might be worth at least maybe shooting them an email or something.

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"Effective questioning brings insight which fuels curiosity which cultivates wisdom"

Thanks so much for your replies. I really appreciate your time to comment. I'm going to ask more questions of my agent... I believe that my homeowners insurance company isn't willing to take the risk of me having a "home-based business with "skin care products". If I was to get sued due to someone making a claim that my soap harmed them...since I make my soap in my home (not necessarily have people come here to buy) my homeowners company would be sought out to pay up...not a chance they're willing to take. But maybe I could get more coverage through RLI... And maybe that would help...? I will do some more checking...this is not my thing. I just wanna make soap!

No a homeowner's insurance will not cover a business, but that's what the small business insurance is for. It sounds like it's more a matter of making sure that your current homeowner's insurance won't drop you because of your business even if you have business insurance to cover business related problems. That's how I interpreted the situation anyway, I apologize if I misunderstood!

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"Effective questioning brings insight which fuels curiosity which cultivates wisdom"

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Susie
Sometimes A Mistake is so much fun, You just have to do it again!

I have home business insurance (not simply product liability insurance) from RLI and am happy with it. It also covers things like weather related damage and losses at an outdoor show/market. You absolutely can't do candles with it but I just do wax tarts and that is ok with them. Some Home Owners Associations, like mine, do prohibit home based businesses or home businesses that generate traffic to your home. You also may find state and local regulations to be important factors as well as tax implications. A sole proprietorship gives you zero protection if you are sued! Everything you own, by yourself or jointly (yes that means your home, cars, jewelry, savings, etc), can be taken in a lawsuit if you lose more than your insurance covers. That doesn't mean it will happen, but the legal form of your business really does matter. On the bright side, if you do the research now and set up your business accordingly, you have a lot fewer headaches later.

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Linda

I learn so much when I can't leave well enough alone!