You would think that selling well crafted handmade soap would be fairly easy, wouldn’t you?
Well it’s not. If you want to ensure that you’re not going to lose your home in the process, you have to make sure that you are covered by an insurance product for any soap that you make and sell. Here in Australia it’s called Product Liability Insurance.
To cut a long story short and after some further investigation today, we found that our business insurance, which we thought covered us for making and selling soap, does not. Even though we specifically told the company that we intended on making and selling our own soap when we took it out, we have been told that it was not part of the deal.
So unfortunately we took the decision to delist all of our handmade soap from Little Green Workshops until we find some a company that will cover us for that product. We are risk averse when it comes to the potential loss of everything we hold dear in our sustainable lifestyle. All it would take is one malice individual to take us to court for damages and we would lose the lot. Not something I want to lose sleep about each night even though we have personally been using our handmade soap for over five years without incident.
The funny thing was that every other product we sell was okay, including our workshops. It was the for soap we lovingly made ourselves that was the issue. Sometimes I don’t know how small cottage industries survive in this environment, and I thank our business planning foresight that we did not build our entire simple living business around this one product.
My mission on Wednesday is to seek out product liability insurance that covers us for handmade soap without breaking the bank. Then Kim and I will have to decide if it the cost is actually worth the potential sales we would make. We will have to wait and see.
Anyway, that doesn’t stop us making soap for our own personal enjoyment and for friends and family. We love the fact that we know exactly what ingredients are in our soap and that it is gentle on our skin and gentle on the planet.
In fact, I have something to share with you all. We have a new soap making technique to share with you all. It is our Lemon Cream Pie Soap recipe that I have also made into a video tutorial. You can find the soap tutorial over at Little Green Workshops blog as well as an ingredient and equipment list so you can replicate our results!
Once we have sorted out the insurance issues, I will give you another update about what I have discovered because I had so many emails from you about the process of selling soap when I wrote my last post about the subject.
I suppose it’s all part of the our green business journey. Never a dull day in paradise!
“Never a dull day in paradise” – the great news here is that it IS paradise! 😀
What a shame about your insurance company’s poor listening skills and thank goodness for your vigilance in noticing it. Here’s hoping that you not only find a policy to allow you to once again sell your soaps but at a lower price than your current policy. 🙂
Thanks Jessie Fingers crossed I should have it mostly sorted tomorrow. I can see a change in insurance companies coming up!
I’m hearing your frustration Gavin! I ran a sustainability course for a local council and was asked to have Public Liability Insurance and Professional Indemnity Insurance! I got both… : /
Oh, doesnt your soap just look almost edible. I bet it smells fantastic.
Insurance – it takes me almost a two months of negotiations each year to insure 3 companies, large factory, plant & equipment, multiple houses, 10 motor vehicles PLUS public and product insurance. Its exhausting. The final tally is so big, i then have to finance it over the next year. Arghhhhh Though i do have a good broker –
Skye Oldham
Account Manager
Austbrokers Countrywide
t 03 9835 1363
skyeo@abcountrywide.com.au
Sadly for small business the insurers that employee engineers, chemists etc that would take the time to understand what processes you are using and therefore the likely risk will tend to overlook small businesses since the turnover and premium is low. But I’m sure if you found someone you would be a long term customer!
If you don’t have any luck dealing with insurers directly try some of the larger brokers. Some will have pools of business they place with insurers at set minimum-premiums so small turn-over businesses are rolled together and underwritten together, averaging the risk across the pool.
Good-luck.
Hi Gavin,
I was using GIO business insurance. It is $723.00 per year. I still consider this too costly however as I only sell a small amount of soap. I would be interested if you find a cheaper option. cheers. Sarah
RLI Insurance for is only around $300, but is not available in every state.. Good luck
Hi Gavin,
I was using Broker, $1,000 a year. Soap is a funny business. But very addictive. At the moment I am still looking for another insurance. Best of luck to both of us and all the love of soap makers out there.
Kind regards
Mag
Hi Gavin,
Did you ever solve the problem of product insurance? In the US they seem to overcome it with group insurance via a soapmaker’s association but their insurance only covers members in the US.
Does a similar group exist in Australia do you know?
Regards
Sheri
Any information on soap making insurance will be appreciated immensely. We paid $1500 a year 4 years ago. We would like to start again. We sold over 1000 soaps and had no complaints.