Insurance Question

[rjr]

I was wondering today...

Ok, say I start a business and I have insurance. I end my business after a few years and I drop my insurance. Then someone who held onto my candle for five years burns it and catches their house on fire. Then I can get sued and I have no insurance, correct?

The other alternatives are that as a candle maker I plan on holding insurance forever or maybe batch numbers get turned into the insurance co and they cover them forever. I'm pretty sure that's not the case with the insurance co's and I don't see how anyone can pre-determine being able to carry life-long insurance. So, what are the options?

[Noodle]

Do you even have a case if you use an old product? I am guessing that everything pretty much has a standard shelf life. I am also guessing that the customer would have to produce some kind of a receipt that they actually purchased this from you which would indicate the date. I am not sure how it works, but I do think there must be some safeguards in place.

[LynnS]

I never thought about this.I just paid my insurance for the year.I was a little late.That's is interesting.What if the house burns down after you quit selling and don't get insurance.

Noodle, Receipt not likely but maybe your business name on the candle label. Then you still would wonder if it was really yours???? One thing I preach to my customers(think I will put this on my site now) is DON'T put a candle on a warmer UNLESS you take the warning label off.I had a customer tell me I told her to late but luckily she caught it in time.Thankfully it wasn't my candle.

LynnS

[blacktieaffair]

Back when I did wickless tins, I had heard about people not taking the candle label off. So , I started putting the warning inside the candle tin, on top of the wax, folded in half like a hang tag. I figured they'd open the tin and take the instructions out. ( although I have to admit, I was always worried there would be that ONE BRIGHT SHINING LIGHT that didn't open it nor look nor take it out lol )

[Noodle]

I don't make candles, so my concerns are not the same. I just wonder how a lawsuit can take place against a company when the company no longer exists. I don't know the answer.

[GrinningGoblin]

I don't make candles, so my concerns are not the same. I just wonder how a lawsuit can take place against a company when the company no longer exists. I don't know the answer.

While I am no expert, I have been managing a big restaurant for some years. To answer this question it all depends on whether the business and the person are separate legal entities. If you are a sole proprietor you and the business are the same entity, if your business is / was an LLC you are a bit more insulated in what assets a lawsuit can access assuming it is just punitive damages and no criminal negligence.

[EnvyCandles]

Not sure if the OP got her answers...

I am a licensed ins agent, and it is very important to read your policies and call your agent for anything you do not understand! If you had coverage on the date of the incident, you are able to to report a claim... The length of time between the occurance and the filing of the claim (and the length of time between the policy cancellation and the incident) are specified in your contract. This varies based on policy type, type of claim, state, etc... Ask your agent for a timeframe in which you can file a claim.

Let us assume that your coverage is not applicable; if the policy will not pay out, then the next thing would be how your business was set up. Was it a corporation that dissolved? Was it kept as a dba? This will determine who if anyone is responsible. Unfortunately, you cannot prevent someone from suing you, but you may not be found liable... This would be an excellent question for an attorney or an accountant.

HTH

[Abbiepql]

When I asked my insurance agent this questions a while back I was told whatever insurance was in force at the time of the sale would be the company to contact.