? about ins. calling all jargon savy people

[amieelynne]

I have been calling around trying to find out about getting insurance...for the day that I eventually start selling my stuff. I heard back from one today in the mail with a proposal for a plan, the details of the plan and the price. I'm confused a bit about the language and was hoping maybe a couple of you experienced guys might help me out...

I called and specifically said that I wanted product liability for homemade candles that I make myself. the agent mentioned that I should also get regular liability in addition to the product to cover if an accident happens at a craft show (I had thought that would be the responsibility of the host--someone slips on the floor that's not neccesarily my fault) ok, I said work it up...I got a letter today and this is what it says:

====================================

enclosed is a quote for general liability insurance for your retail business. the coverage excludes product liability and completed operations. this means the coverage provided would benefit you at the event. I could not get a quote for your inventory because you do not have a store location. the coverage is 1,000,000 per occurance and a total policy limit of 2,000,000.

..................then on the next page it says...................

2,000,000 --- general aggregate limit

excluded --- products/completed operations limit

1,000,000 --- personal/advertising injury limit

1,000,000 --- each occurance

100,000 --- damage to premises rented to you

5,000 --- medical payments

deductible:500

premium:518

so this is NOT products liability right? what is general aggregate liability, and is that something I should have anyway? all I want to do is cover my butt if someone does something stupid, burns their house down and blames my candles. when I called I explained that--so I'm not sure, if this wouldn't cover that, why he got this type of policy and forwarded it to me for approval. this is the ONLY agent that has gotten back to me, out of maybe a dozen called---I'm getting very discouraged in addition to being confused

[disturbed]

Hope this helps. You can find more at http://www.aeslic.com/Glossary.htm

General Liability Insurance - Coverage that pertains, for the most part, to claims arising out of the insured's liability for injuries or damage caused by ownership of property, manufacturing operations, contracting operations, sale or distribution of products, and the operation of machinery, as well as professional services.

Aggregate Limit - The maximum limit of coverage available under a liability policy during a specified period of time regardless of the number of separate accidents that may occur or the number of claims that may be made.

Product Liability Insurance - Protection against financial loss arising out of the legal liability incurred by a manufacturer, merchant, or distributor because of injury or damage resulting from the use of a covered product.

Completed Operations Insurance - A type of insurance that cover's a contractor's liability for accidents arising out of jobs or operations that was completed by the contractor.

I'd call/write the agent and state directly what you want to have covered. The agent may not understand fully, or he may expect you to already know. Hey look man, let's say someone buys my candle, lights it, and it burns his house down, am I covered?

If he/she is unable to totally explain the terms and conditions of your policy, keep shopping.

My understanding of product liability and craft shows - If someone picks up a jar and cut their finger you are covered. The product caused harm. If they are walking around and fall from a wet floor, unless it's your show (you manage it, set it up, promote .....) this is none of your concern.

Your home owner's insuarance might cover your inventory. State Farm covers us 100% for our house, home business (not candle), inventory, autos, and life insurance.

[Daisyd'Light]

You should be able to add this coverage to your home insurance, and possible get a discounted rate. You are not responsible for slips and falls (per my uncle at state farm) He also said that everything done in the home is covered under your home insurance. Hope this helps.

[wonderfullywicked]

He also said that everything done in the home is covered under your home insurance. Hope this helps.

Please, please, PLEASE check with your homeowner's insurance before assuming that this is correct. MY homeowner's won't cover inventory or product in my home. They are specifically EXCLUDED. But my general liability/product liability will cover my product and inventory anywhere.

Edited to add: I'm sure that it differs from company to company and I wasn't saying that Daisy was wrong. My homeowner's insurance would not take on the additional liability for business insurance.

[Daisyd'Light]

Please, please, PLEASE check with your homeowner's insurance before assuming that this is correct. MY homeowner's won't cover inventory or product in my home. They are specifically EXCLUDED. But my general liability/product liability will cover my product and inventory anywhere.

Edited to add: I'm sure that it differs from company to company and I wasn't saying that Daisy was wrong. My homeowner's insurance would not take on the additional liability for business insurance.

Yes, please check, there may be a specific clause. (Sorry, forgot to mention that) Each policy is differant, and are sometimes specific to each home owner.

[Beth-VT]

Not necessarily. Many carriers will NOT cover you for either liability or your inventory, or even possibly your HOUSE if it burns down because you were manufacturing candles in your home and had an accident.

When I approached my carrier (at the time) looking for coverage, they immediately said "no" and added the stipulation that if in the future I have a claim related to the manuf. if candles, like my house burned, etc., they would NOT cover it. They also stated they would non-renew if they knew I was doing anything in the home.

Ended up having to switch carriers, and get a commercial policy that gives me product AND general liabilty coverage. It covers my inventory up to XX amount, covers me at shows for loss as well as accidents of others.

I could NOT get a rider on my homeowners policy.

Insurance is not easy to find, and most of the popularly advertised carriers won't touch us. Be very careful that you are getting the coverage you need......the policy you were quoted does NOT cover your inventory, nor does it provide product liability (which is the most critical) so I'd say it's worthless. Continue your search.

I do not have a retail location, all is done through home, and pay $550/yr for a $1M policy. That is cheaper than most, $800-$1000 seems to be about the norm. HTH.

[amieelynne]

I callled the agent and finally touched base, I told him that this is not what I was looking for and he said that is all that he could offer. I'm just getting so frustrated because it seems that either no one wants to deal with this type on insurance or those that will won't deal with me because I am so small and just starting out.

I know that my homeowner's won't cover anything, if they "knew" officially that I was making candles in my home they would cancel my policy--was informed by my agent, she said to continue as normal without notifying them--IF there is an accident they will cover any damage to my home, not inventory, but then cancel me. she said the same thing when I had a pool installed and bought a trampoline--insurance is a b^%&*( in massachusetts..lol

Beth...if I move to vermont would you hook me up with your agent? lol

[Bev]

Seems to me that a person should quit cooking, too. You can burn your house down as easily cooking spaghetti as you could making candles. Insurance is a pain. I was fortunate in that I was able to add $1 million product liability insurance on my homeowner's policy. But each company, each locality, is different.

[Beth-VT]

Beth...if I move to vermont would you hook me up with your agent? lol

You bet . Either VT or NH.

Bev, I couldn't agree more it's simply ridiculous. I'm waiting for the day that insurers stop covering auto's, since they're soooooooo dangerous. Don't they kill a tad more people than candles do?

[amieelynne]

it seems that I'm caught in a catch-22 here, I'm too small for any of the "big" guys to deal with and the little guys can't afford to take the risk assignment for a candle manufacturer. I do still have my sense of humor because I laughed out loud when the last agent told me that once I had 3 years worth of risk evaluation behind me it would be easier to find a company to underwrite...lol...how am I going to get three years if I can't get written in the first place!!??

thanks everyone for all the advice...

[Kimberly]

it seems that I'm caught in a catch-22 here, I'm too small for any of the "big" guys to deal with and the little guys can't afford to take the risk assignment for a candle manufacturer. I do still have my sense of humor because I laughed out loud when the last agent told me that once I had 3 years worth of risk evaluation behind me it would be easier to find a company to underwrite...lol...how am I going to get three years if I can't get written in the first place!!??

thanks everyone for all the advice...

Being an Insurance Agent myself I know your senario all too well. And what this Agent told you about the experience really is true. With Business insurance it is rated on amount of experience and your gross annual income. The Insurer needs to know the exposure they are taking on. If you have zero experience then they see it as a fly by night operation. It isnt that you have zero yrs experience...you have obviously been making for a bit...thats what you need to say.

And the policy Declarations you posted...you are right..that is not Product Liability. They quoted you a BOP (Business Owners Policy) or at least that is how our BOP policies look here in NY. You could function under that policy but the only thing that has me worried is the "Completed operations excluded" thing. That is what PL Ins is COMPLETED PRODUCTS OR OPERATIONS.

When you talk to a potential Agent tell them if you are going to have an actual Store Front...if you are then you go with a BOP policy. If you are like the majority of us here, then you want Product Liability.

Most Homeowners WILL NOT cover in home business/manufacturing. A Homeowners policy is just that...for your home. Most companies do not want to take on that sort of exposure. So please do not assume your Homeowners will cover you. There are people here on this board that have coverage under their Homeowners but I can tell you it differs from State to State and from Company to company. I just hope that it is sufficient coverage.

It is good that you are looking around now for coverage. SOme people here have been looking for a while for affordable coverage. Good Luck!

[amieelynne]

Kimberly,

thanks very much for the info. I do not have a storefront and told them that. what I said was that I have been making candles for almost a year now, testing extensively during that time and I am getting ready to make the move to sell in the near future. I mentioned that I also do bath&body--specifically lotions, creams etc...but that I do not plan on selling that for a while if ever, I am still just playing around and testing with that (I mentioned it because I wanted a quote with and without the B&B just to know). I told them that I hoped to do maybe 3 craft shows this coming fall/winter to get my feet wet, and then maybe an average of 6-8 next year--they asked about income but I really had no clue because I haven't started selling yet...but when pressed for a figure I said maybe $1500 (I know, I am being optimistic..lol). I know my homeowners will not cover me, have already talked to my agent and she played the "hear no evil, see no evil" bit when I mentioned that I made candles in my home..lol. I really want to find insurance before this fall...I would like to do at least one show to see what it is like and how they work, but I'm too nervous to do it without any insurance because I am on a first name basis with murphy and his damn law I have sold a few candles already, but it's mainly to friends/co-workers so far...so I know them but still worry about what could go wrong.

Being an Insurance Agent myself I know your senario all too well. And what this Agent told you about the experience really is true. With Business insurance it is rated on amount of experience and your gross annual income. The Insurer needs to know the exposure they are taking on. If you have zero experience then they see it as a fly by night operation. It isnt that you have zero yrs experience...you have obviously been making for a bit...thats what you need to say.

And the policy Declarations you posted...you are right..that is not Product Liability. They quoted you a BOP (Business Owners Policy) or at least that is how our BOP policies look here in NY. You could function under that policy but the only thing that has me worried is the "Completed operations excluded" thing. That is what PL Ins is COMPLETED PRODUCTS OR OPERATIONS.

When you talk to a potential Agent tell them if you are going to have an actual Store Front...if you are then you go with a BOP policy. If you are like the majority of us here, then you want Product Liability.

Most Homeowners WILL NOT cover in home business/manufacturing. A Homeowners policy is just that...for your home. Most companies do not want to take on that sort of exposure. So please do not assume your Homeowners will cover you. There are people here on this board that have coverage under their Homeowners but I can tell you it differs from State to State and from Company to company. I just hope that it is sufficient coverage.

It is good that you are looking around now for coverage. SOme people here have been looking for a while for affordable coverage. Good Luck!