Soap Business Insurance: Most Common Types
For the most part, starting a small soap-making business is simple and easy. As long as you have the right tools, a good recipe, a place to work, and your business license, then you’re ready to start selling your soap to the world.
However, there’s one thing that many first-time business owners forget about, and it's business insurance for their specific business and industry. Similarly to most crafters insurance and artisan insurance, such as candle business insurance, insurance for soap making business is designed to protect you and your business from financial liability claims that could arise from customers, employees, and even your landlord.
Below, we’ll explain the difference between the three most common types of liability insurance for soap makers:
Product liability insurance
Public liability insurance
General liability insurance
Product Liability Insurance For Soap Makers
Product liability insurance is one of the most common types of insurance of soap makers and is designed to protect you and your business from claims resulting from defective products. Thankfully, these claims aren’t too common in the soap-making industry.
However, there’s always the chance that you’ll have a disgruntled or injured customer seeking compensation. Here are some examples of product liability claims that you and your business could face:
The customer has an allergic reaction to an ingredient in the soap.
The customer sustains a chemical burn from an ingredient in the soap.
Your product packaging was incorrectly labeled or failed to mention safe-use instructions.
All of these instances could be grounds for a claim. In addition, without product liability coverage, you could be held personally liable for paying for the individual’s medical bills or inconvenience fees. As long as you have coverage, though, your insurer should cover associated costs.
If you primarily sell soap online, then you may only need a product liability policy.
Public Liability Insurance For Soap Makers
If you sell soap as a vendor or have a brick-and-mortar retail store, then you’ll also want to have public liability insurance for soap makers. This type of coverage is designed to protect you from third-party customer claims that result from a customer being injured within the premises of your business. Public liability claims could stem from a number of different events, but these are some of the most common in the soap-making business:
Your business sign falls down and injures a customer standing below.
A customer trips over cords or wires on the ground of your shop or vending location.
A customer’s child picks up a bar of soap or other ingredients and eats them.
Allergic reactions to ingredients in and around your shop.
To put it in simple terms, the difference between public and product liability insurance is in what’s covered. Product liability protects your business from claims against the soap you sell. Public liability protects your business from third-party and customer claims that occur within the walls of your physical business.
General Liability Insurance For Soap Makers
If you have a larger workshop or retail location, use heavy-duty soap-making equipment, or have employees who help you out, then you may find that it’s best to purchase a comprehensive general liability insurance policy for soap makers. This policy will provide you with both product and public liability coverage and cover claims from employees and team members.
It’s typically a little bit more expensive than purchasing either public or product liability, but general liability coverage often more affordable than buying both product and public liability coverage separately.
