[DriverInc]

I read in an earlier thread how you need Liability Insurance if you sell clothes to a retailer.

Wanted to get opinions on if people have used liability insurance and where I can obtain liability insurance?

The last thing I would want is for my company to get sued.

Thanks

 

[badalou]

Why would you need insurance. I sell to stores and I don't have insurance. If your the manufacture of the shirt then I can see problems but just selling a shirt or adding your design and reselling I don't believe could cause any problems.

 

[aokusman]

I agree with you badalou. Since you are not the manufacturer how could you be responsible if something goes wrong. What liability issues could arise with a t-shirt anyway?

 

[Sac printer]

It may be a good idea to have Liability Insurance if you sell in Retail stores.. Preston and Coming out swingin covered this in a thread a while back.

 

[Solmu]

Comin'OutSwingin' used to sell insurance, so not surprisingly he has some

He'd certainly be the one on the forums with the most experience, so... would Mr. Swingin' please step up to the podium?

This question seems particularly relevant:

What liability issues could arise with a t-shirt anyway?

 

[badalou]

OK I am confused. Are you say selling "in" retail stores or "To" retail stores. There is a big difference. I know a lot of sales people including myself and my reps for my product and none have product liability insurance for product they sell to retail stores. The manufactures of the products do and the only insurance the sales people have is for themselves and cars they drive.

 

[DriverInc]

OK I am confused. Are you say selling "in" retail stores or "To" retail stores. There is a big difference. I know a lot of sales people including myself and my reps for my product and none have product liability insurance for product they sell to retail stores. The manufactures of the products do and the only insurance the sales people have is for themselves and cars they drive.

Thanks for the replies. I would be selling TO the retailers. The manufacturer is custom making the shirts, so maybe it won't have the insurance you would possibly get from using brand name shirts and just putting a screenprint on it.

I'm very new so that is just an assumption. I PM'd comingoutswingin a couple days ago and got no response, so that's why I started this thread. It was mentioned in another thread and that's why I posed the question. However it didn't go into too much detail on how to obtain the insurance.

 

[DriverInc]

What liability issues could arise with a t-shirt anyway?

This is also an answer that I'm seeking. Hopefully I do not need liability insurance.

 

[Comin'OutSwingin]

Sorry about the response DriverInc. I have been extremely busy, but I hope this will answer any questions you or anyone else might have about it. If not, just let me know and I can tell you as much as I know!

Yes, I did sell insurance a couple of years ago. I mainly sold life and health insurance, but was also licensed to sell property and casualty insurance. So I don’t know a lot about product liability insurance or business insurance for that matter, and really only studied it when I sold my policy to myself! But I would be happy to share what I do know.

Product liability is something that affects anyone selling products that will eventually end up in the hands of a consumer, whether that be manufacturers, wholesalers, or a retailer. Selling online is retailing.

So any person/company involved in the chain of a products life that will be sold to the public is open to liability. So if you are buying blank Gildan’s from a company and something should go wrong (I’ll cover specifics later), everyone involved can be sued. That’s Gildan, the wholesaler you bought the Gildan’s from, you, and if you sold them to a store that sold them to the consumer, the store also.

Product liability is a state matter. There are no federal laws concerning product liability, so the laws will vary depending upon what state you are in. Someone bringing liability claim must prove that there was some defect in the product. Even though state laws vary on liability, those defects usually fall in 1 of 3 categories: Design defects, Manufacturing defects, and Marketing defects.

Design defects are probably not that big in t-shirts, and I can’t think of something inherently wrong with the actual design of a t-shirt that would make it defective.

Manufacturing defects definitely can affect us. I know there are some here that sell shirts for babies and toddlers. If you happened to apply some flocking or other embellishments that may come off after the product was sold, and an infant were able to take it off and choke on it, you very well could be found liable. At the very least be involved in a lawsuit. And once a jury gets a case, you never know what might happen. So protection in the form of insurance is definitely a consideration.

Marketing defects are those that deal with things such as not warning about the dangers of a product, or not labeling products properly. In our business that would specifically relate to the labeling and relabeling of shirts. The FTC has standards pertaining to what should be included on the labels of fabrics, including t-shirts. If someone is allergic to a certain fabric, and you mislabeled your shirt or relabeled it incorrectly, you could be liable for medical bills for the consumer.

If you are selling to retailers, yes they have their own insurance, but you must remember that EVERYONE involved in the process of bringing an item to a consumer can be held liable if there is a problem. The same is true if you sell online. You are the retailer bringing that item to market, directly to the consumer. If a problem arises from shirts you use, you can’t just say “it’s the manufacturers fault, I’m just selling it”.


Product liability insurance is not expensive. Especially because the risk of injury is minimal in regards to selling t-shirts, but you would have to contact an agent in your state to get an accurate quote. It’s definitely something worth looking into.

Hope this helps.

 

[Solmu]

So any person/company involved in the chain of a products life that will be sold to the public is open to liability.

I thought this would be the case.

Product liability insurance is not expensive.

...and this.

But it's nice to have it confirmed, thanks.

 

[RAHchills]

Thanks Greg. So are their special companies that offer business liability insurance or can I just go to my current insurance provider and get hooked up?

 

[Comin'OutSwingin]

Some of the big ones have it, but some don't. You would just have to check.

There are also some companies that specialize in it.

When you shop for it, make sure that you tell them that you specifically want Product Liability Insurance. Some companies will offer General Liability Insurance but you would have to add Product Liability to that policy. Other companies include it with a General Liability policy. So just make sure that what ever you get, whether it has to be added on or it's included, that you have Product Liability.

 

[badalou]

I checked with my rep back east who handle over 15 lines of product and he does carry liability insurance. He is a commissioned sales. he said if he had to get insurance it would have to be for each of the product he carries, each product not each company. If it is "Product Liability". He does carry company liability in case he drives into a retailer that has failed to pay on time.. He was kidding on that last note..

 

[RAHchills]

hey thanks Greg. I'll check into it.

I checked with my rep back east who handle over 15 lines of product and he does carry liability insurance. He is a commissioned sales. he said if he had to get insurance it would have to be for each of the product he carries, each product not each company. If it is "Product Liability". He does carry company liability in case he drives into a retailer that has failed to pay on time.. He was kidding on that last note..

so lou, by product we're talking about shirts compared to sweatshirts and not each shirt design... right?

 

[DriverInc]

Any idea on the costs of obtaining this insurance?

 

[Lolo]

Hello,

I am new to this too, but what if your company is an LLC-- wouldn't that protect you enough if something went wrong?

 

[Comin'OutSwingin]

personally, yes. But your company would still be liable!

 

[WackoWasko]

If we start off as a partnership, is it possible to switch to an LLC later on, or should we just hold off a few more months? We have very little money to start with, and I'm not quite sure we can afford starting off as an LLC.

 

[splathead]

If we start off as a partnership, is it possible to switch to an LLC later on

Yes, you can incorporate later after you have formed a partnership.

 

[selzler]

Insurance wouldn't be without it. About 12 years ago I had an one of my workers mess up and the ink started to peel of a kids shirt and the kid peeled some of and stuk it in his mouth and choked. The parents contacted me and told me about the problem. About 4 or 5 days later I got a letter handed to me by the police dept. Well long story short I got suited contacted the insurance and went to curt and the insurance and I lost $250,000 for medical, pain, parents pain, and more items were on the suit papers. Just remember lawyers will find a way to try to get you its there job it the way they make their money.