Business Insurance for Candle Makers

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Business insurance is designed to protect a business owner’s financial assets and is an essential investment for a candle maker.

 

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About General Liability Insurance

All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL).

Some of the risks CGL insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

While businesses aren’t legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.

Learn more about the risks covered by general liability insurance.

COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE WOULD COVER FOR A CANDLE MAKER

Example 1:  When hosting a candle party in a customer’s home, you forget about a candle that was lit. The candle burns down and eventually causes a fire that burns the customer’s kitchen. General liability insurance would likely cover the damage to the kitchen and its contents.

Example 2: When selling candles in-person at a craft show, a glass candle holder is dropped by a customer. The glass shatters and severely cuts the customer. Should they sue, general liability insurance would likely cover the customer’s injury.

Example 3: You accidentally post inaccurate information about a competitor in comments on social media, and the competitor seeks compensation for the damage you’ve caused to their reputation. General liability insurance would probably cover any legal fees or settlements associated with the incident.

Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It’s always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.

COST OF GENERAL LIABILITY INSURANCE

The average candle maker in America spends between $450-$1,500 per year for $1 million in general liability coverage.

Check out the chart below for a snapshot of average CGL expenditure across a variety of industries:

Graph showing average price of general liability insurance prices per industry

Several factors will determine the price of your policy. These include your:

  • Location
  • Deductible
  • Number of employees
  • Per-occurrence limit
  • General aggregate limit

You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.

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OTHER TYPES OF COVERAGE CANDLE MAKERS NEED

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all candle makers should obtain:

 Product Liability Insurance

Selling candles exposes your business to potential risk long after transactions are completed, and product liability insurance helps protect against some of those risks. For example, a child might become sick after eating a candle, or a candle’s flame might cause a house fire. Even if your product isn’t at fault, affected customers might still file expensive lawsuits against the business. Product liability insurance often covers such risks and resulting lawsuits.

Product liability insurance may be purchased as a standalone insurance policy or through a package policy.

TYPES OF COVERAGE SOME CANDLE MAKERS MAY NEED

In addition to the policies outlined above, there are a few other types of coverage your candle makers may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

 Commercial Property Insurance

Any workspace or storefront that your business has should probably be protected by commercial property insurance. Property insurance normally covers commercial facilities as well as the equipment kept in them.

If you run a home-based candle making business, there’s a good chance that you still need commercial property insurance for the workspace in your house. Most homeowner’s insurance policies won’t cover commercial workspaces, leaving a coverage gap if you don’t get commercial property insurance.

Commercial property insurance is frequently available as part of a business owner’s policy (BOP).

 Commercial Auto Insurance

Vehicles that are used for commercial purposes often have to be insured with commercial auto insurance. Business-owned vehicles always need their own commercial auto policies. Personal vehicles that are used for both private and commercial driving might need commercial auto coverage depending on the particular situation.

If you use a personal vehicle to deliver candles, make sure it’s properly insured both when it’s driven for private use and when you’re driving for business reasons.

ADDITIONAL STEPS TO PROTECT YOUR BUSINESS

Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.

 

With this in mind, here are three things you can do to better protect your business:

  • Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
  • Set up a limited liability company (LLC) to protect your personal assets. (Refer to our guide for step-by-step instructions on how to form an LLC in your state.)
  • Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.

FREQUENTLY ASKED QUESTIONS

What is included in a business owner’s policy?

A typical business owner’s policy includes general liability, business interruption, and property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.

What is the difference between business insurance and general liability insurance?

“Business insurance” is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.

Do I need insurance before I start a business?

You should invest in coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.

Will insurance protect my business from everything?

Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.