Should I buy candle Insurance?
One question I get a lot is, “Do I really need candle insurance?” The answer is ABSOLUTELY YES. I have seen many candle makers express that the warning label makes them not liable for mistakes. I have even heard of some people making customers sign an agreement on their websites stating they are not responsible for damages! Yeah, don’t do this.
Insurance, with restrictions, is available for all aspects of the candle business.
There are many different types of coverage, and finding the appropriate insurance for your needs can be a bit confusing.
Figuring out the difference between the policies, and talking to an insurance rep may not be a huge help. They just want to sell you ANY policy! So here is a breakdown of the different policies and what they do for your business.
- Professional liability insurance protects you if you offer professional services and advice to clients.
- General liability insurance covers bodily injury lawsuits against you if someone trips over a candle while visiting your retail shop or burns themselves when taking one home from the store and spills hot wax on their leg.
- Product liability insurance protects against claims that the product is faulty or defective, harming consumers who use it (or even those who simply inhale its scent).
General liability will protect you from third-party issues.
This type of insurance protects you from financial loss if someone sues you for property damage, bodily injury, or other types of losses. General liability covers your legal fees and any damages awarded by the court in the event that one of your customers sues you.
But what exactly does general liability cover? And what aren’t they protecting me from?
When I initially started looking for a policy I was duped into getting general liability insurance when I really didn’t need it at the time. I asked the rep this simple question. “Does the policy cover my candle business?” Of course, they said yes. This response technically wasn’t a lie, but what I didn’t know is that general liability would not cover a candle accident like a fire. Which is the main reason we candlemakers are looking for insurance in the first place!
General liability covers if anyone was to get hurt on your premises. For example, you are at a farmer’s market and a customer trips over your extension cord and hurts themselves. This is the type of policy you need if you ever plan on selling in person.
Product liability will protect you from issues caused by your products.
Product liability insurance is designed to protect you in the event of a claim by someone who has been injured by the product that you manufactured. It can also be used to cover legal fees for defending against such claims, as well as punitive damages awarded by a jury as punishment for your company’s negligence.
If a customer buys something from your store or website and ends up getting hurt while using it, they may sue you on the grounds that the product was defective or otherwise dangerous when sold. Even if this isn’t true—and even if their actions were entirely their own fault—defending yourself against lawsuits can be expensive: paying $100-$200 an hour for attorneys’ fees can add up quickly! This is why it’s important not only to make sure all potential risks are addressed during production but also after production begins.
Product liability is an absolute must for candle businesses. Since we are in the business of making candles I found it very hard to locate an insurance company that offered product liability for candles. Lucky for you, I have a couple of options you can look into for insurance.
Both of the companies above require you to be a member before you can have access to the insurance. Personally, I use Indie Business Network for all my policies. I have heard the Soap Guild is another great option for candle insurance. Both companies also cover bath and bost products if you also sell those products.
Professional liability insurance protects you if you offer professional services.
Professional insurance doesn’t get talked about a ton, but if you are someone who gives professional advice (candle-making lessons) you may want to add on professional insurance. I have watched YouTube videos where people are giving advice on how to make candles that is not entirely safe. 5 Minute crafts, I’m looking at you! Also, there are cases where people think they are teaching something that is safe when it really isn’t. For example, I’ve seen videos of people overloading their wax with fragrance oil just because they think it makes the final product smell better. Yeah, don’t do that.
Now imagine someone followed faulty advice, and it caused them harm. They could come back and say well, so and so made a tutorial saying it would be safe! This is where professional liability comes into play. If you teach people how to make candles or soaps you want to protect yourself from people saying that you gave them faulty advice.
BTW https://indiebusinessnetwork.com/ also carries this coverage.
So… do you need insurance? The answer is yes. Starting a business takes a lot of time, money, and energy and you wouldn’t want that investment to go up in flames! See what I did there?