[philldetman]

Hi.

Can anyone advise me if i need any insurance to make and sell stuff from home? or rather, if i ought to?

I don’t have any currently as i sell mostly via POD sites, but as i’m going to be making my own stuff to sell shortly i wonder if i should get some insurance?

i’m thinking for things like if someone orders 100 or 1,000 shirts and then doesn’t pay after i made them cos they don’t like them.. or if someone gets a rash from a shirt i supply or whatever and sues, just don’t wanna get sued or be too much out of pocket so want to operate properly and safely.. if that’s even possible these days?

cheers.

 

[TABOB]

There are a few types of business insurance.

i’m thinking for things like if someone orders 100 or 1,000 shirts and then doesn’t pay after i made them cos they don’t like them.

Business insurance will not cover this.

The only compulsory types of business insurance are employers liability (if you employ people) and public liability (if you allow customers in your shop). You can get other types of business insurance if you like but they are not compulsory.
I operate as a limited company with zero net revenue and zero assets, so there is no money to claim anyway . If I ever get sued for a rash (very unlikely), I would be asking for evidence of the exact cause, and obviously pass the blame to either the shirt or ink manufacturer.

 

[philldetman]

There are a few types of business insurance.

Business insurance will not cover this.

The only compulsory types of business insurance are employers liability (if you employ people) and public liability (if you allow customers in your shop). You can get other types of business insurance if you like but they are not compulsory.
I operate as a limited company with zero net revenue and zero assets, so there is no money to claim anyway . If I ever get sued for a rash (very unlikely), I would be asking for evidence of the exact cause, and obviously pass the blame to either the shirt or ink manufacturer.

Thanks, very helpful.

I am not operating as a LTD currently, just a sole trader. Though I can see that changing next year.

Seems like there's nothing for me to insure for at this point then.. My gear will be covered by home contents.

Now let me try and think of another reason why one might need insurance...

 

[PatWibble]

Product liability is absolutely essential. A rash is a minor detail - if the handle drops off a mug full of hot tea someone can damage their cobblers beyond repair. If you sell some defective PPE to someone who gets killed or hurt, you are liable.


Liability cannot be limited, excluded or restricted under the Consumer Protection Act, so to you can't pass the blame to your suppliers. The consumer doesn't have to prove any negligence on your part, only that the product was defective and that the product was the probable cause of any injury or harm arrising from its use.


Employers Liability (min cover of £5 milliion) is compulsory if you have one or more employees.
Public liability is not compulsory, but advisable.


Some insurance companies offer small business packages that cover employers, public and product liability. They usualy work out cheaper than having separate policies.


You haven't even mentioned the impact on your household insurance. If you are trading from home without the necessary amendments to your policy then you probably won't be covered when your heatpress catches fire and you burn down a row of houses....

 

[philldetman]

As it's just me, then it seems employer's liability isn't required right?

So if i read this correctly, i should get Product Liability and perhaps Public Liability too?

Once I have my gear, i'll be in touch with my home contents provider to see what they say about it all.. and if they offer the above.. and if not then will see where else i can get cover..

Thanks again Pat, very helpful as ever

 

[PatWibble]

As it's just me, then it seems employer's liability isn't required right?

So if i read this correctly, i should get Product Liability and perhaps Public Liability too?

Employers liability will be a waste of money (but if you ever become ltd you will be an employee).

Public liability too, unless you have people coming into your premises, or if you trade on a market or event, or if they are likely to come to harm due to some unforseen circumstances such as ( for example) a sign falling of the facia of a shop. There is a small chance that delivery drivers, reps etc might sue you if they hurt themselves on your premises.


Product liability is more essential, given how you have described your circumstances. There is potentially no upper limit to liability claims, so your home could be at risk.



Like I said, it might be cheaper to get an 'all in one' policy than trying to find product liability on its own. You might even find one that includes household insurance



If you are trading from home it might be in breach of your mortgage/tenancy agreement which will probably invalidate your household policy.

 

[philldetman]

Employers liability will be a waste of money (but if you ever become ltd you will be an employee).

Public liability too, unless you have people coming into your premises, or if you trade on a market or event, or if they are likely to come to harm due to some unforseen circumstances such as ( for example) a sign falling of the facia of a shop. There is a small chance that delivery drivers, reps etc might sue you if they hurt themselves on your premises.

Product liability is more essential, given how you have described your circumstances. There is potentially no upper limit to liability claims, so your home could be at risk.

Like I said, it might be cheaper to get an 'all in one' policy than trying to find product liability on its own. You might even find one that includes household insurance

If you are trading from home it might be in breach of your mortgage/tenancy agreement which will probably invalidate your household policy.

Understood on the Ltd bit and the employee.. will bear that in mind for if/when i switch.

i won't have anyone coming anywhere near my home and don't intend to trade at markets or events yet though i will have various deliveries made of course.. but i'll take the risk on that one.. noted then for if/when i setup a stall somewhere..

Will look for product liability and/or a bundle as you suggest once i'm setup proper.

I did make it clear that i'm WFH to my mortgage lender but will have it clarified as to what point the line of what's acceptable moves.. thanks for giving me a heads up on this.

cheers.

 

[binki]

... My gear will be covered by home contents. ...

I doubt it. Insurance companies are scum. Burn down your house with a heat press and find out.

We didn't have insurance for a long time. Now we do since we are financing some new equipment. We went through our homeowners insurance and they brokered it to The Hartford. $500/yr for everything.

I don' t think you need it at this point. Just operate as a hobby until you start making some bank.

 

[TABOB]

if the handle drops off a mug full of hot tea someone can damage their cobblers beyond repair.

This could happen, but unless it happens to multiple people, what caused the fracture will be very difficult to tell. You could put some warning labels, such as "inspect carefully before use! Hot liquids can cause severe burns" etc.

Liability cannot be limited, excluded or restricted under the Consumer Protection Act, so to you can't pass the blame to your suppliers.

That's a contradictory statement. I'm not a legal expert but these people may be https://www.lawdonut.co.uk/business/marketing-and-selling/consumer-protection/product-liability-faqs Section 2 and 3 are interesting. As I said, it is not compulsory to have insurance for this. I have it because it comes with the package, but I never had to use it.

The consumer doesn't have to prove any negligence on your part, only that the product was defective and that the product was the probable cause of any injury or harm arrising from its use.

Proving that the product was defective at the time of the supply is a requirement, and not easy to establish.

Employers liability will be a waste of money (but if you ever become ltd you will be an employee).

Who's going to sue who?

I doubt it. Insurance companies are scum. Burn down your house with a heat press and find out.

.

UK insurers are not as bad, so if the equipment is listed in the contents they will pay. I never had a problem with insurance payouts.

 

[philldetman]

This could happen, but unless it happens to multiple people, what caused the fracture will be very difficult to tell. You could put some warning labels, such as "inspect carefully before use! Hot liquids can cause severe burns" etc.

That's a contradictory statement. I'm not a legal experts but these people may be https://www.lawdonut.co.uk/business/marketing-and-selling/consumer-protection/product-liability-faqs Section 2 and 3 are interesting. As I said, it is not compulsory to have insurance for this. I have it because it comes with the package, but I never had to use it.

Proving that the product was defective at the time of the supply is a requirement, and not easy to establish.

Who's going to sue who?

UK insurers are not as bad, so if the equipment is listed in the contents they will pay. I never had a problem with insurance payouts.

Don't know how to do all that fancy multi-quote stuff but..

A warning sounds like a good idea. I suppose the handle could fracture in the post, even if packaged properly.. Though from your link i suppose taking reasonable steps to avoid the damage would be proper packaging.

I will contact my home buildings/contents provider once i have my stuff in place and make sure to specifically mention what i have and what i'm doing with it.. to ensure the equipment and building in which it sits (my house) is properly covered.

Can anyone recommend any packages in the UK? I presume we're talking a few hundred quid a year, rather than a few thousand? i hope

 

[TABOB]

Don't know how to do all that fancy multi-quote stuff but..

It's just like auto insurance. You get just the compulsory cover, and add the optionals.
Just like with Auto insurance, the price doesn't change much with most add-ons, but varies depending on location and size of operations.
Use comparethemarket.com to get quotes.

 

[PatWibble]

That's a contradictory statement. I'm not a legal expert but these people may be https://www.lawdonut.co.uk/business/marketing-and-selling/consumer-protection/product-liability-faqs Section 2 and 3 are interesting.

Nothing is contradictory. Any terms that you try to impose that limits or transfers your liabilty to a third party supplier are not effective under the Consumer protection Act.


If you are printing onto a product you are 'reconditioning' it, and are liable. Putting a mug into a heatpress at 190c and then putting it into cold water to stop the sublimation process can effect its integrity/safety. If you print a shirt it is your responsibility to ensure the inks are safe to use.

You are also processing the product, not just repackaging it.



Proving that the product was defective at the time of the supply is a requirement, and not easy to establish.


Any customer making a claim will probably be using a 'no win no fee law firm'. They will have far more experince in proving liability than you will have in providing a defence.


You are entirely missing the point of insurance. When someone makes a complaint you pass it directly to your insurance company, who take it from there on your behalf.



You could put some warning labels, such as "inspect carefully before use! Hot liquids can cause severe burns" etc.


It is your responsibility to supply goods that are fit for purpose, not the consumers responsibility to check them.







Who's going to sue who?


Only Ltd companies with a sole director who owns at least 50% of the shares ( and no employees) are exempt from Employers liability. That rules out most family firms. You can be prosecuted by the HSE for not having Employers liability insurance when you should have it. Big fines.

It isn't just about being sued. If your heatpress electrocutes you you can claim. If you end up with COPD from 20 years of huffing plastisol/sublimation/solvent fumes in a badly vented building, you can claim. You might not be succesful, but you can claim.





UK insurers are not as bad, so if the equipment is listed in the contents they will pay.


Not true. If you are running a business from home your insurer needs to be fully appraised. Any breech of mortgage/tenancy terms or planning permission will most likely invalidate insurance.

 

[TABOB]

If you print a shirt it is your responsibility to ensure the inks are safe to use.

This would be impossible. I have to rely on the assurance provided by the ink manufacturer and the relevant certifications.

You are entirely missing the point of insurance. When someone makes a complaint you pass it directly to your insurance company, who take it from there on your behalf.

I'm not, and I will sure do if it ever happens, but it is very unlikely in my case.


There is no need to be paranoid when starting out. That's all I'm saying.

 

[philldetman]

I would say i'm one to do things as properly as possible being keen to remain on the right side of the law and covering myself to a sensible degree so as not to get burned in hot water (if not by the heat press) some time in the future.

I sense a middle ground is best found here between both arguments, but importantly this has made me aware of considerations that i hadn't yet.. er.. considered

So i'm checking what my lender needs from me to be happy for me to operate my business from my home (and getting clarification where the line is between what is and isn't allowed from their standpoint) and will ensure my insurer will cover everything too..

Then i'll look at product liability and perhaps public (and even employers later on as required, once i actually get up and running proper.

thanks very much.

 

[PatWibble]

This would be impossible. I have to rely on the assurance provided by the ink manufacturer and the relevant certifications.

That would be you taking reasonable steps toward 'ensuring that the inks are safe'.


There is no need to be paranoid when starting out.


Paranoid,cocky or unaware of the implications? If you own a home or any other substantial asset then it is more likely to be one of the latter two.


Insurance works on paranoia. I haven't claimed on mine once in over 30 years trading, but I still pay it.

 

[TABOB]

That would be you taking reasonable steps toward 'ensuring that the inks are safe'.

Which is what any decent person would do.
However, if people get sick and turns out to be because of the inks, whose fault will it be?

 

[PatWibble]

Which is what any decent person would do.
However, if people get sick and turns out to be because of the inks, who's fault will it be?

That would be for your insurance companies legal team to argue!!!!
Liability under the Consumer Products Act can be joint and several, and since you have modified the product you could be in the frame as the producer.



The CPA clearly says that everyone in the supply chain can be held liable. Any distinction further than that is for the lawyers to argue and the judge to decide.


That is why Product liability Insurance is essential.

 

[wardaxan]

Yes, it's possible. Different insurance companies may offer different insurance terms. Don't hesitate to ask the insurance companies for details.
If you do it regularly, it will be easier to get a discount and save money. In the event of a manufacturing error on your part, the insurance company will reimburse the entire real value of the product. There is a comprehensive E&O policy package, which can even insure you against delays in deliveries on your part. This includes cases where your product does not meet the description, and the customer will want to return it. Such cases are also insured.

 

[Rezorios]

I would be happy if anyone recommended me a reliable place to buy a business insurance