Insurance, and what your policy excludes

Of the three risks a small maker carries, one dominates in this category and it is the one a general policy is least likely to cover.

Product liability is the one that matters

General liability covers somebody hurt at your premises or your stall. Property covers loss of stock and equipment. Product liability covers harm caused by the product itself, and in skincare that is the exposure that actually exists.

A general policy frequently does not cover injury occurring off the premises from a product you sold, which is precisely the shape of a skincare claim.

Why skincare is different

The product is applied to skin, often to the face, sometimes to broken or sensitive skin, and used daily for months. The realistic claims are irritation, allergic reaction and contamination.

The defense is documentary: a safety assessment, challenge test data, stability data, batch records and a traceable lot code. An insurer will ask about all of it, and a brand that has run the testing is both cheaper to insure and far better placed if a claim arrives.

What buyers require

Retailers, spas and clinics commonly require product liability cover at a named minimum, often $1 million or more, and frequently ask to be added as an additional insured.

Markets and pop-ups have their own minimums. None of these are negotiable at the point of asking, and certificates take longer to obtain than a buyer will wait.

What to tell the insurer

Exactly what you make and how. That you manufacture rather than resell. That you make emulsions rather than only anhydrous products, if you do. Whether anything carries an SPF or a therapeutic claim, because that is a different risk class and possibly a different policy.

And where you operate. A policy issued against an incomplete description is a policy that declines at the moment it is needed.

References