Many successful manufacturing businesses start out as very small ventures, often developed and operated within a small space inside their residential home. The production of specialty soaps manufactured and sold as gifts or skincare products is an excellent example of this type of small-scale manufacturing operation. Because of their small size and limited profit potential, owners of small soap manufacturing companies may feel that they do not need to protect their business by providing it with insurance coverage.
If you currently own a small soap-making business or plan on starting one in the near future, here are three important reasons why you should consider purchasing appropriate insurance coverage as quickly as possible.
Protection for product liability claims
While the risk for liability is likely to be less for soapmakers than it might for some other types of manufacturing businesses, product liability issues can still arise. For example, if the formulation or manufacturing process is incorrect for a batch of soap, skin irritation or other problems could occur when customers use the product. Customers who claim they were affected by the manufacturing error might feel compelled to use the legal system to seek damages for their discomfort, creating significant legal expenses for your company. Small businesses who purchase manufacturing insurance can rely on their coverage to help them navigate product liability claims more successfully.
Protection when hiring employees is necessary
As a small-scale soapmaker, you may still be working alone to create and sell your products. As you grow, however, you will likely need to begin expanding your business by adding employees. Although crucial for business growth, employees add risk factors that business owners will need to consider, including the risk that employees will be injured while working or make mistakes during the manufacturing process that could result in increased liability concerns for the business owner. Manufacturing insurance policies can be written to provide small business owners with coverage for many of the employee-related issues they will likely face as their company expands.
Protection for the residential structure
Most basic home insurance policies do not cover any business activities conducted inside the home. Therefore, any instances of damage to the structure or injuries to people related to the business would not be covered under their homeowner's insurance on the structure. The purchase of specific manufacturing insurance tailored to the needs of your business will help ensure that your company and home are protected from risks.
To learn more about manufacturing insurance, contact a company like Fullsteam Insurance in your area.