Do We Need Liability Insurance?

by Lynn Decker.
(USA)

jmj-question-mark-teal-on-parchment-500x500-jMy partner and I make jewelry and we are considering setting up a partnership to sell jewelry on line, consignment and craft shows.

Do we need liability insurance?

My partner’s concern is that she owns a home which she feels can be attached if someone decides that they contracted some horrific disease from one of our products-an exaggeration to be sure, but nowadays anyone can sue anyone for anything.

Would appreciate any advice or experience anyone has had with insurance, nuisance or real litigation?

Thanks in advance..

Lynn Decker

 

 

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  • Mary Ann says:

    I’m glad you asked this question and I’m curious about the responses. My big concern is a child swallowing a bead or an alergic reaction to a metal in a component. I am a sole proprietor, so I am sometimes concerned that I’m putting my family’s assets at risk, and I don’t want to go through the hassle and expense of becoming a corporation or LLC. I’m looking forward to the responses.

  • Barbara says:

    I’m interested in hearing what people say, as well.

  • I set up my business as an LLC because I wanted that level of protection for my home etc. It wasn’t a big hassle but there is some expense with set-up.
    (I think it was in the $500 range) Renewal each year is budgeted into my costs. I also purchased liability insurance for $300/year because a couple of shows/events I did required this. (I have since dropped these shows from my schedule)
    I work with a local promoted at Markets and they provide the insurance and most of my major art shows also provide this. (it’s part of the fee paid)
    If you are not protected by your business set-up I would personally recommend insurance because you never know what will happen. I would also check with your local county business office for their recommendation.
    Good Luck
    Cindi

  • It would definitely be advisable to purchase liability or product liability insurance to protect you both from judgments against you or your company. Here are a few articles that will help you understand the purpose of insurance and the benefits and drawbacks of partnerships and LLCs.

    LLC Basics

    Obtaining Business Insurance

    LLCs and Limited Liability Protection: A 50-State Guide

    Partnership Basics

  • I’ve made jewelry for 10 yrs and have not purchased any insurance. The shows I do, provide the insurance for the crafter’s participating.
    As far as a child swallowing a bead, I guess you could just state on your piece, not intended for children under the age ??.
    I also do this as a hobby, as I work a full time job, and only do 6 shows a yr. and sell my jewelry at a local store, who also has insurance.

  • Nancy says:

    My husband and I purchased liability insurance that is just a rider with our homeowners insurance. We do shows and are also in a gallery. The insurance covers theft for both in our home and at shows, but they don’t cover the gallery unless we owned the gallery. We are covered for personal liability which is an issue at shows, but we don’t have customers come to our home so it is not an issue there. If you can avoid having people come to your home to see your jewelry, that is best. I definitely recommend getting it. Some show sponsors also require it, especially if you are doing outdoor shows. As Cheryl said in her comments, some shows will offer temporary insurance to cover that particular show, but it isn’t very expensive to have it added on to your homeowners insurance and you’d be covered year-round, good piece of mind in my opinion. Good luck!

  • Initially I did not purchase the liability insurance. However, living in NE Kansas and doing outdoor shows, I decided it was a good investment. The winds here are horrible and there have been instances of tents blowing into other tents during the shows. This will cover you and pay for the damages if you are at fault.

    I also am licensed to sell Kansas State University logo jewelry which requires the insurance as well.

    ACT Insurance provide a good yearly policy for $265 per year. This is very reasonable rates for the coverage.
    actinspro.com/?gclid=CJaCv-OhhLcCFQef4AodH1QAAQ

    Having this policy will also allow you to set up in most malls which require you to have liability insurance.

    I feel it is a small price to pay for a piece of mind. Hope this helps.

  • Pam says:

    I have not purchased insurance up to this point. I do include my return policy in the bag with every purchase, and I’m now thinking that I should add a disclaimer to my receipt that states the item is not intended for children under a set age – should contact my state and find out what the child protection act had to say on this subject. Might look at that law to see what age would be appropriate. I appreciate the input here – something I had not thought much about!

    I do a few outdoor shows, and my own tent is well weighted (wind would prevent my setup long before it would move my tent) so I’m not so much worried about my own tent damaging another party’s, but I am concerned when I see so many others out there with little or no securing of their tents. I’ve seen canopies literally take flight and roll – it is not a pretty sight, and would concern me for the risk to my own property as well as to myself. I’m always amazed at how unaware many are of how a canopy can be transported by what feels like just a little breeze! 😀

  • Several shows I do or have done will only accept applications if the vendor can show they have liability insurance. It’s usually one million per occurance and has to have all the producers listed as insured as well. Mine runs about $500 a year.

  • Rose says:

    Thank you Cyreathia Reyer -that ACT policy is less for annual coverage than my agent quoted for 2 days coverage. So happy!

  • Michael bergstein says:

    You absolutely should have it to protect your assets. In addition, many of the shows are now requiring the vendors to provide evidence that they have coverage

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