For your best business protection and savings, we recommend bundling GL with some other important coverages on one Business Owners Policy!
Soap is one of the many necessities that people simply can’t go without. The oldest recorded mention of soap was a simple recipe that was unearthed in the ruins of ancient Babylon over 5,000 years ago. Since then, the entire world has changed. We have electricity, vehicles, heated showers, and smartphones.
But guess what… People are still excited to buy authentic handmade soap!
Despite big soap’s multi-million-dollar marketing efforts to replace handmade soap with synthetically derived body wash, old-fashioned handmade soap is more popular than ever. In fact, it’s even become somewhat of a “luxury item,” as many customers are willing to pay higher prices for authentic, all-natural soaps.
In this article, we’ll break down the different types of liability insurance for soap making and soap makers so you can decide which one is best for you. Then, we’ll outline some of the average rates that you can expect to pay for monthly and annual premiums, answer a few soap makers insurance-related questions, and even give you tips on finding affordable and cheap insurance for soap makers.
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 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.
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.
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.
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Now that you know a little bit more about the different types of liability insurance for soap makers, you’re probably wondering how much it’ll cost to purchase coverage. Given that the soap-making industry is a low-risk business to be in, general liability insurance coverage is usually quite affordable!
In the table below, you’ll find the average rates that top insurance providers charge for soap making insurance. The numbers below assume that you’re purchasing a $1,000,000/$2,000,000 general liability policy . The average annual premium for this level of coverage is $39 per month or $468 per year, depending on your location, sales volume, and other business-related risk factors.
| Insurance Provider | Average Monthly Rate | Average Annual Rate |
|---|---|---|
| Soap Guild (HSCG) | $31 | $369 |
| State Farm | $33 | $401 |
| USAA | $25 | $295 |
| The Hartford | $47 | $568 |
| Geico | $41 | $487 |
The rates above are a good place to start if you’re trying to calculate your average business start-up costs. However, your individual insurance rate may vary, depending on a number of different factors ranging from your annual sales to the city you live in.
Ultimately, the best way to find cheap soap-making insurance is to compare quotes from different insurance providers. When you compare quotes, you take power out of the insurers’ hands and allow yourself to view the different rates and perks offered by competing insurance companies. This allows you to pick the most affordable insurance policy.
To get started comparing soap business insurance quotes today, simply click the ‘ Get Quotes ’ button below! After answering a few basic questions about your business, the quote generator will help you compare rates from the leading providers of soap-making insurance on the market and find the best coverage at the cheapest rate!
Making soap and candle making both involve a very similar process and require similar tools and materials. As such, many soap-making companies also make handcrafted candles (and vice versa). One of the most common questions we’ve seen is from shoppers wondering if they need to purchase a separate candle making insurance policy.
To answer the question, a general liability policy should be able to cover both the candle and soap-making aspects of your business. As long as they’re both done under the same business (not separate business entities), then you’ll only need a single liability policy for your business.
Here’s where you may run into some pricing discrepancies. Usually, handmade soap insurance is very affordable, and prices will be similar to what you’ll find in the table above. However, if you have a larger operation that uses expensive (or dangerous) mechanical equipment, then you may find that your insurance premiums are higher.
When it comes to any business, the larger your operation is, the more it will cost to insure your business.
When you’re comparing quotes from different insurance providers, you should also take care to research each company and make sure that they’re a good fit for you and your business. In our opinion, one of the best soap-making insurance companies (and one of the most popular) is offered by the Handcrafted Soap and Cosmetic Guild. Here’s a brief review of the company to give you some background.
The Handcrafted Soap and Cosmetic Guild insurance (HSCG) offered by the Soap Guild is easily one of the best insurance policies available to artisan soap makers. It’s designed to provide liability coverage for small businesses that specialize in making handcrafted soaps and cosmetics.
The HSCG was formed in 1998 in Ohio. Since then, they’ve focused on educating soap makers through their annual conferences where small business owners can network and share knowledge. They also provide comprehensive business insurance solutions for soap-making businesses, including public liability coverage, general liability coverage, product liability coverage, professional liability coverage, property insurance, and even personal insurance.
The main reason that customers go with HSCG insurance is that it’s an insurance policy designed specifically for the soap-making and cosmetics industry. Additionally, members can take advantage of the perks of being part of the Soap Guild.
Pros:
Designed by soap makers for soap makers.
Added perks from being a member of the HSCG (educational resources, guild conferences, etc.).
Wide range of insurance coverage available to suit any of your small business needs.
Excellent customer service support.
Cons:
Not a good choice if your business sells more than soaps, cosmetics, or candles.
Not designed for resellers; just handcrafters and artisan soap makers.
Best For: Small to mid-sized soap-making, cosmetics, and candle businesses.
Average Cost: $31/month for general liability coverage.
Rating: 4.5/5
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