Product Liability Insurance?

bizhelp77

Am setting up a small online business at the moment and my accountant recommended that I get product or public liability insurance - I'll be selling baby goods so her concern was if a child choked on a part of a zipper or something and they sued me as a sole trader I would be liable. I'm struggling to get a quote though, most insurers have come back and said it's not possible to quote because I'm selling baby clothing.

Any experience of this? tips? advice? am I being too careful? Head wrecked now at this stage, into week 2 of trying to get a quote and really dont want to proceed any further until I know the score.

delahuntv

Accountants are good at accountancy - not insurance.

If you are sourcing the goods direct from manufacturer (highly unlikely if its a small online business) you would need product liability insurance. But if you are purchasing off a wholesaler or a brand, they have the end responsibility.

Basically if the worst happened (highly unlikely) and someone got hurt though a fault with the product, then they would seek redress from you, but you would in turn seek redress from the supplier. Any case I have heard usually would be Mrs blogss v baby online & baby brand. With the brand insurance paying.

Ring an insurance broker - we use CFM insurances in Dublin for all commercial and liability insurance, but most brokers should be able to advise.

btw - I'm in retail for over 30 years and never required product insurance. But we do have public liability insurance which is reasonably cheap.

pedroeibar1

delahuntv wrote: »

Accountants are good at accountancy - not insurance.

If you are sourcing the goods direct from manufacturer (highly unlikely if its a small online business) you would need product liability insurance. But if you are purchasing off a wholesaler or a brand, they have the end responsibility.

Basically if the worst happened (highly unlikely) and someone got hurt though a fault with the product, then they would seek redress from you, but you would in turn seek redress from the supplier. Any case I have heard usually would be Mrs blogss v baby online & baby brand. With the brand insurance paying.

Ring an insurance broker - we use CFM insurances in Dublin for all commercial and liability insurance, but most brokers should be able to advise.

btw - I'm in retail for over 30 years and never required product insurance. But we do have public liability insurance which is reasonably cheap.

Not necessarily so.
The customer's contract is with the vendor, not the 'supplier', so it is vendor who gets sued. Then the next step is (usually) to apply to enjoin the supplier (s) all the way back to the manufacturer. That can be done consensually at each step or it can be (usually) contested. And it may not even be attempted, after all, who would want to sue a small co. in China? And how enforceable is a judgement? So the buck often does not get passed.
In Ireland it is only a matter of time before any business is sued. As a sole trader all assets are on the line, not to mention the hardship involved in the proceedings.

I agree hat the OP should go to a broker; or else form and trade through a Ltd. company which in its early days would not have sufficient assets to be worth insuring..

bizhelp77

Hi guys

Delahuntv - yep sourcing directly from the manufacturer in Turkey

Have been onto several brokers at this stage, waiting on 2 more to revert tomorrow but all have basically said that its not insurable or they couldnt get a quote because the item is baby related and coming from Turkey.

pedroeibar1 - I think you could be right about the ltd company, its that or source the goods from wholesaler or distributer rather than manufacturer. WHats so frustrating is that I know of 4 other companies using the same manufacturer, we're not reinventing the wheel here just trying to sell something of good quality which will turn us a bit of a profit. Anyhow will see, ltd company isnt too expensive to set up is it?

pedroeibar1

Insurance companies assess risk. That is what they are (well, most of them) good at. Premium rates reflect claims/losses; 18 year old male drivers and childcare products have a higher claims incidence and cost so they are more difficult and expensive to insure. No point in going to several brokers, all go to the same markets, so if one says he just has a PFO letter, most likely all the others will have the same message.

A Ltd Co can be formed for a couple of hundred euro - use the 'Search' function on this forum. Small companies are exempt from audit, so you just have to do a bit of filing annually, outsource it (if you hate admin) for a few hundred. Hopefully after a few years trading you will have built up some assets in the Ltd co and then, when you need to protect them with insurance, you will have a track record and obtaining cover will be easier.