Insurance, and what your policy excludes

The moment money changes hands, the framing your insurer has been using stops matching what you are doing.

Three separate risks

They are distinct and a policy can cover one and not the others.

General liability. Somebody is hurt at your stall, or on your premises.

Product liability. Somebody is harmed by the product. Rare with dry spice and not zero, and this is the one a wholesale buyer will ask about by name.

Property. Loss of stock or equipment. Spice inventory is quietly valuable and is frequently excluded from residential cover once it is commercial.

Your homeowner policy is not the answer

Many homeowner policies cover incidental activity and stop covering anything once there is a business. Extension guidance on farm-direct marketing makes the same point about farm liability policies: a general policy often does not cover injury that occurs off the premises from a product you sold, which is exactly the shape of a food claim.

Adding business liability cover is usually necessary once you are processing or selling at markets, and that is a conversation rather than a form.

What buyers require

Farmers markets increasingly require product liability cover, commonly at over $500,000, and a wholesale buyer will frequently specify $1 million or more and ask to be named as an additional insured.

Those numbers are not negotiable at the point of asking, and the certificate takes longer to obtain than the buyer will wait.

What to tell the insurer

Exactly what you do, including the parts that feel minor. That you grind and blend rather than only repack. That you sell at markets, online, and wholesale if you do. That you store inventory at home if you do.

An accurate description is the whole basis of the cover. A policy issued against a partial description is a policy that declines at the moment it matters.

References