Sweet Cheeks Soap Company

Product Liability Insurance

The other day a thought came to me, how long after you close a business (food products, bath and body products..) would you have to carry product liability insurance.  Would putting an expiration date on the product and have post a  “do not use after such and such a date”  be a sufficient cut off date to cancel the  insurance?  What is your insurance company’s policy on this issue?

6 thoughts on “Product Liability Insurance

  1. Good question, Laurie. I suppose to be absolutely safe you would have to continue to carry liability insurance for a while. However, I often wonder — how many of us have actually had a law suit? And how frequent is it that we would be liable for some issue a consumer finds fault with? The other safe thing would be to incorporate, thereby separating your personal assets from your business assets. That’s the major reason we incorporated in my therapy practice. Let me know what comments you get. Jane

  2. I hadn’t thought about that. I set up my company as an LLC so that, like Jane, personal assets are separate from business assets. I would think that an expiration date would help in your favor if something came up, but I don’t know for sure. Donna

  3. You can purchase “claims made” insurance policy that come with a “nose” and/or a “tail” that cover you (the company) for any period before or after your insurance policy was in effect. For example, a “tail policy” has a provision that permits an insured to report claims that are made against the insured after a policy has expired or been canceled, if the “wrongful act” that gave rise to the claim took place during the expired/canceled policy. That’s what you’re looking for. (Obviously, a “nose” is on the other end, it would cover you for anything that happened before you had an insurance policy, although there would be a specific retroactive date identified in the policy.)

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