Affordable Products Liability Insurance to Protect You and Your Business
Our products liability insurance program is the result of several months of searching and negotiations with various insurance industry specialists to find a program that would insure member businesses at an affordable cost. Our work resulted in an arrangement with an experienced insurance services broker to offer products liability insurance for IBN members at a fraction of the annual premium that would be required by any other carrier. Our program covers both home-based and non-home-based businesses. It also covers any type of consumer products with the exception of meats, cheeses, drugs and nutritional supplements. This makes it perfect for IBN members who sell soaps, cosmetics, fragrances, candles, aromatherapy products, cakes, cookies, brownies, clothing items, home accessories, jewelry and more. The product is tailor made for companies that gross over $5,000 annually, thus being disqualified from products offered by other companies like RLI Corp.
Now, you can now join IBN and get the coverage you need to protect your business -- all with one easy step! Here's a coverage overview:
$1,000,000 annual general aggregate coverage ($2M is available for just $55
more per year!)
$1,000,000 products liability coverage
$1,000,000 advertising injury coverage
$100,000 coverage for damages to rented premises
$5,000 medical expense coverage
Increased coverage is available for members requiring more than this. Plus, there's a lot more to the basic coverage package, including some "floating" coverage to protect your property when you are exhibiting at a trade show, doing a craft show or selling your products on consignment at a boutique! The coverage is extremely competitively priced, and you get it (and all the other great
IBN member benefits!) immediately when you join
IBN!
Frequently Asked Questions and Answers
What kinds of products are covered by the insurance?
What is "handmade?"
How did IBN's products liability insurance come to be?
Who is the insurance carrier?
Who is the insurance broker?
How much does the insurance cost?
When does insurance coverage expire?
How do I increase coverage from $1,000,000
to $2,000,000?
Is payment in advance required, or can payments be
made in installments?
Is the premium refundable?
If I sell my business, is the policy transferable to
the new owner?
Does obtaining this insurance change my IBN membership dues, or any of my other
IBN member benefits?
Is there a cap on gross revenues with this
insurance?
How do I procure this insurance?
When will my insurance become effective?
Do I qualify for the insurance if my business is
located in Canada or other countries outside the United States?
Are cosmetics products made for pets (like dog soap
or shampoo or cat hair oil) covered?
Where do I get my certificate of
insurance?
What if I want to include Additional
Insureds?
Can I get this insurance if my business is located outside of the United States?
Can I join IBN and not get the insurance?
If I want to join IBN, must I also
purchase the insurance?
Why does insurance come with IBN membership, except in certain circumstances?
What if I am already an IBN member? Can I continue
with my membership even if I do not get the insurance right now?
What if I have insurance elsewhere, but
also want to join IBN?
What if I am already an IBN member and now wish
to add the insurance?
What Kinds of Products Are Covered by the
Insurance?
The program covers products such as these: handmade lotion, soap, bath salts, perfume, essential oils,
fragrances, candles, brownies, cakes, cookies, jewelry, clothing, candies,
fragrance oils, base oils, waxes, powders, masks and scrubs.
Any item that is also drug or a nutritional supplement is not covered.
Cosmetics designed for internal use, such as suppositories, are not covered.
Coffee, tea and similar items are covered only if they are sold in a set (such as a gift basket) in conjunction with cosmetics that are covered. If they are sold separately from covered cosmetics, they are not covered.
Children's toys are not covered.
If you are not sure whether your product is covered, contact Mandy Erickson at Stratus Insurance at (866) 395-1308 and she will be happy to assist you.
What is
"handmade"?
The term "handmade" may mean something different to each
person. For purpose of this policy, "handmade" means you either
made it from scratch by hand, someone under your control made the product
from scratch by hand or you purchased the unscented and/or uncolored product
in bulk and added your own scent and/or color and/or other additive to
distinguish it in your line of products. If 80% or more of your products are
"handmade" within this definition, then they qualify for coverage
under this policy.
Again, if you are not sure whether your product is covered, contact Mandy Erickson at Stratus Insurance at
(866) 395-1308 and she will be happy to assist you.
How did IBN's Products Liability Insurance Program come
to be?
When IBN launched in January 2000, there was not a great need for a special insurance program, but this changed quickly as the industry begin to grow and expand by leaps and bounds. By early 2001,
IBN arranged an insurance referral program through a broker who worked closely with RLI Corp. to provide insurance to home-based businesses, and to provide reasonably priced insurance for non-home-based businesses. After 9/11, the insurance industry changed dramatically and it became more difficult to source insurance for non-home-based businesses. RLI Corp. remained the best option for home-based companies so
IBN's referral program continued through them and the broker we worked with. In late 2005, RLI announced clarified that it's policy was to cover home-based "hobby businesses," and that as a result, it would no longer cover businesses that grossed in excess of $5,000 per calendar year. This forced members to either cap their growth at $5,000 a year or grow beyond it and be forced to pay well over $1,000 a year for coverage. While there were other options for some members (including
AARP), the vast majority of
IBN members were stuck.
IBN received more email, phone calls and letters about this issue than about any other issue in the 6 years of its existence. In recognition of the high priority
IBN members placed on this issue, and considering that if it was not resolved, the entire industry was at risk,
IBN made it a top priority for 2006 to find affordable coverage for members so our industry could continue its vibrant and robust growth. On February 13, 2006, on behalf of
IBN's members and the members of the Handcrafted Soap Maker's Guild and the Natural Perfumery Group,
IBN wrote a letter to RLI Corp.'s President seeking reconsideration of their decision and offering alternatives.
IBN invited a meeting, by phone or in person to discuss the options.
On behalf of RLI's president, Assistant Vice President Brian Hoover, responded to our letter. RLI did not change its policy (and we did not expect them to),
but the letter does shed some light on what lead to their decision. Specifically, Mr. Hoover said, "[I]t became apparent that some small business owners were placing heavy reliance on [our] Program for product liability coverage for the manufacturing of personal care products. This reliance presents a substantially greater exposure than RLI can accommodate and threatens the integrity of the Program for the small hobbyist business for which it was designed."
IBN immediately formed a Task Force to address the issue. Suggestions poured in from all over the country. Eventually, one insurance broker stood out as possibly willing to help locate an insurer that would offer low premiums in exchange for volume purchases. Eventually,
IBN entered into an agreement with the broker, who entered into an agreement with the insurer, and
IBN's Products Liability Insurance Program was born on September 8, 2006.
Who is the insurance carrier?
The Colony Group. The Colony Group has been rated "A" by AM
Best Company, the leading provider of independent, third party ratings for
insurance companies worldwide. Their ratings are known as the benchmark for
assessing the financial strength of insurance and related organizations and
the credit quality of their obligations.
Who is the insurance broker?
Stratus Insurance
Services, Inc.
All of your questions about your policy should be addressed as follows:
Mandy Erickson
(866) 395-1308
beauty@StratusIns.com
fax: (801) 763-1374
How much does the insurance cost?
$395 per year for $1,000,000 annual general aggregate coverage. This can be increased to $2,000,000 for just
$55 more per year. Additional premiums may apply for larger companies and companies needing additional coverage.
When does the insurance
coverage expire?
If you have the products liability insurance member benefit, the policy will
expire a year from the day you join IBN, along with your IBN membership. The
insurance broker will not send you a renewal notice. While IBN will
send a renewal notice using the email address on file, this is just a
courtesy. It is your responsibility to renew
your membership with insurance before it expires 12 months from the day you
join or renew, or the policy and IBN membership will lapse.
How do I increase
coverage from $1,000,000 to $2,000,000?
We are in the process of updating the shopping cart to add this option.
In the meantime, once you join, please email
IBN to let us know you'd like the increased amount and we will respond
quickly to make sure that happens. If you want more than $2,000,000 in
coverage, please contact Mandy
Erickson (above) before joining IBN.
Is payment in advance required, or can payments be made in installments?
Payment in advance is required. It is not possible to process installment payments for premiums as low as we are offering.
Is the premium refundable?
No. The policy becomes effective as soon as payment is processed when you join
IBN. The policy will cover you for a year in exchange for payment in advance of the policy premium. You may choose to renew it or not when it expires, but it is in place for a year and the premium is not refundable.
If I sell my business, is
the policy transferable to the new owner?
No. The new owner would have to procure their own coverage.
Does obtaining this insurance change my IBN membership dues, or any of my other
IBN member benefits?
No, it simply adds to your benefits.
Is there a cap on gross revenues with this insurance?
No, but if this program is significantly insufficient for your commercial manufacturing and/or retail establishment, your premium may be higher.
How do I procure this insurance?
Simply join IBN and you will be asked to complete an Insurance Questionnaire
which will be sent to you by email once your payment is received and your
membership application has been accepted and processed.
When will my insurance become effective?
Immediately upon processing of your IBN membership application and your return of the Insurance Questionnaire to the fax number provided thereon.
Do I qualify for the insurance if my business is
located in Canada or other countries outside the United States?
Yes, if you also have a physical street address location (not simply a PO
Box) in the United States.
Are cosmetics products made for pets (like dog soap
or shampoo or cat hair oil) covered?
Yes, if they are handmade by you. If they are made elsewhere and
repackaged for you, or you buy them in bulk and repackage them, they are not
covered by this program.
Where do I get my certificate of insurance?
Mandy Erickson, (866) 395-1308. Ms. Erickson and her staff will issue your certificate of insurance. They can also send you a copy of the Master Policy, or you may
contact
IBN for that. Your certificate of insurance will contain your company name and incorporate the Master Policy by reference. The Master Policy will not contain your company name specifically since the Master Policy applies to everyone who has a certificate of insurance.
What if I want to include Additional Insureds?
You may include up to 5 Additional Insureds during one calendar year. The
first 5 are free. Additional ones are available at $25.00 each. To add
Additional Insureds, send an email
to Mandy Erickson with your business name, your name, full street address,
the name of the Additional Insured and any specific wording the Additional
Insured is asking you to include, as well as any specific instructions on
how best to deliver the Additional Insured certificates to you (email, fax,
etc.).
Can I get this insurance if my business is located outside of the United States?
Yes, if you also have a physical address in the United States where work related to your business is performed.
Can I join IBN and not get the insurance?
Yes, under these conditions:
1. You already have the insurance through another company and you fax a copy
of your current Insurance Certificate to (801) 763-1374, Attention Mandy
Erickson; or
2. You reside outside the coverage area of the policy (you are a non-US
business without a physical US location); or
3. More than 20% of your annual revenue results from the sale of ingredients, supplies,
non-handmade products (as defined above)
and/or non-consumer
products such as consulting or other services.
If I want to join IBN, must I also purchase the insurance?
Yes, unless you meet one of the conditions above. But that doesn't mean you cannot procure products liability insurance since it is available elsewhere. If you are a home-based business with less then $5,000 in annual revenue, you may be able to get insurance through RLI Corp. The contact for this is Sue Hegge at (800) 697-6747. If you are not home-based, but still wish to have coverage without joining
IBN, you can contact Kathy Francis at (800) 332-9256, ext. 135. Sue or Kathy can refer you. You can also check any local insurance companies in your area that provide business insurance. You
may also be able to procure certain types of insurance through your
homeowner's insurance provider.
Why does insurance come with IBN membership, except in certain circumstances?
IBN carefully considered (really agonized over) the issue of requiring purchase of insurance with membership. On balance, since not having affordable insurance was threatening to put so many members out of business, and also prevent others from launching a business with the insurance they needed, it became clear that we would have to be able to deliver volume in order to get an insurance company or a broker to provide insurance to our industry participants at all. If only a portion of members participated, the coverage would be far more expensive -- prohibitively expensive for hundreds of
IBN members who cannot obtain coverage elsewhere. This was a difficult decision for
IBN, but as an organization representing members who desperately need products liability insurance to grow -- and who also need affordable rates -- we had to make it more likely than not that a new member would benefit from, and therefore choose to purchase, the
insurance.
What if I am already an IBN member? Can I continue
with my membership even if I do not get the insurance right now?
Yes, if you are currently a member of IBN, your membership benefits will remain in full force and effect until
it membership expires. Once it expires, you may choose to renew it (and we hope you will!!), and it must be renewed with the insurance
benefit or you can produce your current Insurance Certificate with another
company as outlined above. If you are a current member and wish to add the insurance, please complete the membership application and submit it afresh. In this way, your membership and insurance will start effective immediately and both will renew at the same time next year, but your membership start date will not change.
What if I have insurance elsewhere but also want to join
IBN?
If you have insurance, simply fax a copy of your insurance certificate to
IBN before you complete and submit the membership
application. The fax number is (801) 763-1374, Attention Mandy Erickson.
In the membership application, check the membership
option that says "Full Member Without Insurance" as indicated in the Member Category section of the membership application. Please
email
IBN with questions if you fit into this category.
What if I am already an IBN member and now wish to add
the insurance?
We will prorate your dues so that the newly added insurance and the
membership both come up for renewal at the same time. Please email
IBN with questions if you fit into this category.
So are you an Indie or an outie? Ready to take your handmade beauty business to the next level, joining IBN or renewing your current membership with the insurance you need to ensure your growth into the future? If so, click here to join IBN today!
