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“Tell people what they need to know, not what they want to hear…”
Up0Hi Tal,
Sorry for the delay in coming back to you – being away for 3 days has created a weeks worth of work
…The simple part – yes, as a disability services worker you will need some form of Professional Indemnity coverage as you are providing a professional service.
Now, lets get to the Liability side of it…. a professional service provider and a jewellery maker are at opposite ends of the spectrum when it comes to liability exposures – one is more public liability related (trips / slips etc) whereas the other is product liability related (injury from products).
The issue that arises is that a professional services liability cover (which you sometimes can get in conjunction with a PI policy – same insurer and written on what is called ‘follow-form’ (in conjunction with the PI policy to minimise gaps in cover) doesn’t usually provide the right types of Product Liability coverage (if it provides any). Because also the premiums are pretty cheap as an add on, most insurers aren’t looking to cover the manufacturing / assembly exposure.
Conversely, a Public and Products Liability policy covering a maker would need to have the activities of the disability services provider noted for cover to be applicable also. The issue you have here, is that, if you place your PI with one insurer and your PL for your disability work is somewhere else (or even with the same insurer but under a different setup) then there is the potential for gaps to occur.
It may be better to look to separate the two business ‘units’ separately and cover them as follows:
– Disability Services: PI & PL under 1 policy (or adjoining policies)
– Other Activities: a separate PL policy.
The one thing you need to ensure – if you do it this way you need to tell the Disability Services insurer that you also do XYZ and you don’t want this covered under their policy (unless they specifically want to cover it – happy days if the cover is right for you) and the insurer for XYZ that you do disability services and that you already have cover for that (so they can exclude those activities). It can be hard because insurers sometimes won’t let you have two policies for the same ‘Entity’ and if you are becoming a sole trader then you are one entity with different trading names.Sorry if the above is a bit confusing – let me know if you have any questions or need to clarify.
Regards,
Mark
[The above is General Advice Only and does not take into account your specific circumstances. Please ensure that you seek appropriate advice from a licensed professional before acting upon any of the contents above.]
Up0mel2017, post: 259345, member: 111019 wrote:I have a small online business selling handmade goods from fabrics e.g. cushion covers, pouches, wallets etc. It initially started out as a hobby but it has been growing, so I’m looking at setting it up properly as a business.
Recently I’ve started making baby bibs and I am wanting to add them to my inventory. However I was looking into product liability insurance and I must say I’m a little overwhelmed! Would someone kindly shed some light on whether it is necessary, and if it is, how would I go about organising it?
.Hi,
Basically, you need to take out a public and products liability policy which covers all the activities you do – this allows for an insurer to work out whether your business is acceptable and on what terms they will insure you on.
You don’t need to take out cover (its not compulsory) but if one of your products causes injury or property damage you could be held liable to pay compensation – do you have that type of money? Even if you weren’t liable, do you have the funds to pay for legal costs in the event of something happening? If the answer to either of these is ‘No’, then you use insurance to transfer your risk away to an insurance company.
How do you organise it? If you know what you are doing, then you can go online. But you need to know what you are doing as you are the ‘expert’ – undertaking something people take years to learn (I have been in the game 16 years and am still learning). Otherwise, you contact an insurance broker and they can do it for you – you get their expertise on your side.
Regards,
Mark
Up0Hi Tal,
Just responded to your message – I am just returning home from training seminars so when I get a moment I will put up a response (its a little bit convoluted / detailed but I will try and make it as simple as possible
Regards,
Mark
Up0Hi,
Our office covers a number of clients who make similar things to you – I am just in transit at the moment but I will respond when I can (in the next few days). There are a few insurers that do it without issue
Regards,
Mark
Up0chelseaa, post: 259157, member: 110959 wrote:Hello,I’ve been trying to find out what sort (if any) of insurance I should have to cover myself and my company.
I’m selling my handmade art online… other people are saying I don’t need insurance or insurance companies think my business is ‘high risk’ and wont cover me?Anyone have any personal experience or knowledge about this sort of thing?
It would really depend on what risks you have and what you want to transfer to an insurance company. Unfortunately from what you’ve mentioned above there’s not enough detail to make suggestions on what you should consider. I would suggest getting in contact with an insurance broker to discuss your business.
One thing – what companies are saying an artist is high risk? I’ve insured plenty on my time so I can’t see what the issue is…Regards,
Mark
Up0Hi Cindy,
By all means you can contact our office if you like – I currently don’t have any openings personally but one of our staff can assist you.
Regards,
Mark
Up0Byron, a lot of who you use can depend on what you do.
As an example our brokerage doesn’t have any ‘volume’ based products so the prices we get may be more than some brokers, but people line up to get tailored advice (which you can’t get from a volume based pigeonholed product). It also depends a lot on what you do – some clients need a tailored product and negotiations whilst others are happy with off the self (like all businesses).
I’ve seen a lot of bigger brokers go the way of becoming call centres and just relying on a computer program form the cheapest price for small clients as there is not much earn from them – that I personally believe to be completely disingenuous – It removes the whole ‘advice’ reason and value add that a broker should be providing…Up0Cindy G, post: 258636, member: 52969 wrote:Yes. I have had many who says they don’t cover the scope of my business at all. Found a broker for over 30 underwriters and she says only 1 might want to accept me …. might?!! Sigh. Of all the obstacles I’m prepared to encounter this is definitely not one of them. I am hoping to get a second quote for comparison. We have hundreds of imported skincare in this country. Surely more than 1 underwriter provides product liability insurance in this scenario.Might? They either do or they don’t. If they have provided you with a firm quotation with no subjectivities (ie no conditions subject to the quotation being valid) that means you can bind cover with them.
As for underwriter numbers, think of it this way:
– I deal with 120 or so.
– Approximately half don’t do General Liability cover.
– A large percentage don’t cover beauty Products.
Then it comes down to the terms of the underwriters themselves. A number of ‘hard to place’ facilities Have minimum terms – Can you afford a $5,000 minimum premium (which is what a lot of underwriting agencies charge)? A $10m Turnover has no issue with these figures, but for a $100,000 turnover it’s not feasible.
I am not saying that this is usual but the market is getting harder than it was 12 months ago. Also your mainstream insurers aren’t wanting to cover these items.
As I said earlier, for the SME market I can think of 3 that may assist – then it would be a matter of properly researching others / alternatives.Up0Have you spoken to an insurance broker? I can think of a couple of insurers / underwriters off the top of my head who could be suitable but they all deal through insurance brokers (not direct to the public).
Up0My thoughts – perhaps under a Management Liability policy, perhaps under a General Liability policy. General Liability needs to have some form of injury / damage (and injury is defined in the policy wording), whereas if there are actions taken for breach of law etc then it falls back to the running of the business (which is the premise of a ML policy).
Up0My Advice “Don’t let gender be the driving force of who you deal with – the best person for the job is the best person, be them male or female”.
Too many times I have seen a particular experts overlooked for networking events purely because of their gender – Yes a ‘Women in Business’ event may be geared towards females but if the best presenter is a Male, then why not utilise him? And the same for Men’s groups….
Up0Just curious – why has this been give the title ‘Business Insurance’? I would be interested to know what type of insurance cover people think his alleged incident falls under….
Regards,
Mark
Up0Good to see that you have this sorted. I do, however agree with various points on the risk management that needs to be undertaken (I topped my network in Australia in a risk management course last year so I feel I have a few credentials when it comes to RM)…
Two points:
– Repackaging does take on similar risk to a manufacturer. I know plenty of insurers who will do the retail aspect for a product but not the manufacturing exposure.
– The worst thing the insurance industry could have done is move towards ‘pigeon hole’ underwriting. It actually devalues the whole underwriting process.Feel free to PM me the product, who you tried and who you eventually got cover through – am always interested to see how the general public purchase their cover….
Regards,
Mark
PS. And yes – an online business still has Public Liability exposures.
Up0bluevallytextiles, post: 255314, member: 102812 wrote:Some say I may also need liability insurance, which I don’t quite understand as no one will come to our place to get products.Although people will not be coming to your premises, you still have Liability exposures in relation to your business – take parcel to the post and bump into someone because you weren’t looking where you were walking (that’s Public Liability) / your products causing injury (that’s Products Liability).
And because you are the importer you are deemed to be the ‘manufacturer’ under Australian Consumer Law – the buck stops with you.Liability isn’t a compulsory cover, but it is piece of the risk management puzzle – you are basically transferring specific business risks to an insurer. Certainly if you are running a business I would recommend having it.
Regards,
Mark
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