When do I need Product Liability Insurance, and what to avoid

Sam & Oliver

Sam & Oliver

I plan to have my first run of production finalized and at my door by August 1st.  But... then I will literally have a palate of sauce in the garage... Before I even crack open the first bottle or make the first sale, when should I get a lawyer or insurance agency involved?
 
What should a start-up company be focusing on for insurance, and is there any obscure coverage that (if missed) could lead to financial disaster?
 
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What ^^ said x 2. You need it in place from day one, and if you are going the co-packer route they will likely need to be a named insured on your certificate and you on theirs...at least in FL anyway :-)

We have a $2M policy too
 
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Do NOT get a lawyer!  It's INSURANCE.  Shop at a couple different business insurance agencies.  Most companies that advertise on TV do not deal with business insurance.  Food processing insurance is not that unusual, you just need to find agent who are familiar with various business types. 
 
And Shop Around.  Some here got a quote for $2,000/yr.....kept looking and eventually got the same coverage for $500.
 
 
Mine is ~$500, but I don't have car or markets added on, just product liability.
 
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GeminiCrow said:
yeah, don't pay more than 500-600 per year....the right company should be able to offer a competent policy for around that mark.
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Sort of....It could be more, it could be less.  Get reputable insurance (I'm with The Hartford now), and the add-ons can add up. 
 
I have liability insurance at 2M
 
I have a blanket policy because I'm doing 9 festivals this year, probably 12-14 next year. I don't want to pay each time I add an event, so I pay a bit more up front. 
 
I have insurance on my pallets of sauce - right now I have 12 pallets worth of sauce in the whse space I rent at my distributor, soon to be 15. That's 5-figures before the decimal. If lightning strikes the building its in, it sure would suck to lose all of that money when my sauce burns to the ground. 
 
I also have the sauce in my delivery vehicle insured - while normally not a concern for farmer's markets, when I'm doing a festival and have 70 cases of sauce in my van, fair market value on that is over $5K. And normal auto policy ain't gonna cover it. Hell, the normal policy won't cover the manufacturing costs. 
 
Pay for what you need to pay for, appropriate to the scale and breadth of your business.
 
If any of the above is applicable to you, sign up for it and pay for the insurance. It's worth it if anything happens. 
 
And hey, if the warehouse my sauce is in never burns to the ground, at least I rested easily at night knowing I was covered. In the long run you're not spending much to protect a lot. 
 
That's my $0.02 anyway. 
 
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Most retail stores require $2m minimum. We ran into a hotel chain requesting $5m so we'll be going through a dist. for that instead since they have that type of coverage.
 
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Kalitarios, I know I'm a little late to this conversation, but make sure your co-packer puts you on THEIR policy.  Grocery stores may ask you to do the same for them.  It's a standard practice but helps distribute your liability.  I have Hartford too and pay $650 for 1M, which includes car insurance and product coverage while driving.
 
Ken
 
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GeminiCrow said:
I have 1m, but may up it to 2m for kicks soon.
yeah, don't pay more than 500-600 per year....the right company should be able to offer a competent policy for around that mark.
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Hey Dov,
 
I posted about this on another thread... would you be able to PM me some good agent leads?  Insurance is my final hurdle and I'm not having much luck.  I need something fairly quickly.  I need to sell some sauce this year and hopefully get established and set up next to you in Brooklyn next year.
 
Mark (TSK)
 
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Mark, contact a couple of your local business insurance agents.  Not "vehicle only" agents.  Find agents that deal with businesses.  They can help you.  A food business is not all that uncommon.  Food Trucks, salsa/sauce makers, caterers, they all need insurance.
 
And as has been posted, pay attention to what they write up.  Lucky Dog needs more insurance than I do (Markets, vehicles, market riders, distributors -vs- wholesale only for me with a bit of refrigerated salsa)
 
Good Luck with your final hurdle and with your new venture!
salsalady 
 
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salsalady said:
Mark, contact a couple of your local business insurance agents.  Not "vehicle only" agents.  Find agents that deal with businesses.  They can help you.  A food business is not all that uncommon.  Food Trucks, salsa/sauce makers, caterers, they all need insurance.
 
And as has been posted, pay attention to what they write up.  Lucky Dog needs more insurance than I do (Markets, vehicles, market riders, distributors -vs- wholesale only for me with a bit of refrigerated salsa)
 
Good Luck with your final hurdle and with your new venture!
salsalady 
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Will do... thanks.  I'll post when I'm all up and running.  Hopefully in the next couple of weeks.
 
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Yeah, What Ann said.
 
PM me and I'll give you my guys number, but he is local to me. Not sure what the protocol is. I'm sure he may like the business, but maybe it's better you had someone local who you can visit in person when need be. In the the last 8 months, I have been in constant contact with my agent, as a lot of the events I do, often require a COI, so I am getting educated as we go....A visit to his office is not a problem, and we have even done lunch a few times.
 
I googled insurance agents in my area and just started calling. When speaking to them though, I did try and make it easier for them, by telling them that allot fo my peers were able to secure liability insurance with 'Hartford'. First two people I reached out to couldn't make it happen (for reasons unknown), but the third guy got me insurance in a few days and I was ready to go....Recently upped mine to $2mil, as that is what the NYC Expo is requiring....
 
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