Soap Making Business Insurance
Getting insurance for your soap making business is essential.
This is because soap making businesses need to be protected from a variety of different risks, such as trademark infringement allegations and vendor disputes.
Business insurance coverage is also a must when it comes to protecting your business assets against damage, theft, and employment law-related claims.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Soap Making Business
General liability insurance is — generally speaking — one of the most important insurance policies for soap making businesses.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Even so, it is important to understand that not all soap making businesses will be fully covered with a simple general liability policy.
This means that — depending on your risks — you could benefit from considering additional coverage options. These include:
- Workers’ compensation insurance: This will protect you from employment law related disputes, such as bodily injuries and wrongful termination claims.
- Commercial property insurance: This policy covers the cost of repairing and/or replacing your business’s equipment in the event that it gets damaged.
- Business interruption insurance: This will protect your lost income in the event that you are required to temporarily close down due to a covered risk.
You will also need to find a coverage provider that works for you. Even though there are several great options available, we recommend prioritizing online insurers over traditional brick-and-mortar ones.
This is because online insurers use AI in order to offer personalized coverage (instead of a live insurance agent) and thus benefit from having fewer operating costs.
This allows them to offer significantly more affordable rates.
Let's Find the Coverage You Need
The best insurers design exactly the coverage you need at the most affordable price.
Cost of General Liability Insurance
The average soap making business in America spends between $400-$1,500 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a soap making business to other professional industries using the graph below.
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.
Find the Best Rate
Discover the best coverage at the lowest rate in our low-cost business insurance review.
Common Situations That General Liability Insurance May Cover for a Soap Making Business
Example 1: A customer visits your business to pick up their order and trips over your front steps. They want you to pay for their medical bills. A general liability insurance policy will cover the expenses related to the injury and any expenses related to lawsuits, including settlements, court costs, and attorney's fees.
Example 2: A customer claims that a certain soap product advertised as being able to heal dry skin or eczema did not heal their excessively dry skin. They sue you for false advertising. In this instance, your general liability insurance would pay for your attorney's fees and any payouts awarded by the judge.
Example 3: A rival soap making business files a lawsuit stating that you harmed their business with your verbal or written words. Your general liability insurance should cover the expenses related to the lawsuit, including attorney fees and any settlements or judgment awards.
Other Types of Coverage Soap Making Businesses 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 of the most common types of coverage:
Commercial Property Insurance
Even if your soap making businesses is inside your home, you may still need commercial property insurance to specifically protect your soap making equipment and supplies from unforeseen damage, like from a weather event or fire.
Commercial Auto Insurance
If you deliver products to stores and customer homes via a vehicle, even if you also use that vehicle as your personal transportation, you will need commercial auto insurance. This is because many individual car insurance policies do not cover accidents caused while driving for work or for hire.
Product Liability Insurance
Product liability insurance protects you in the event that someone becomes injured by your handcrafted products. This includes medical expenses incurred if your products cause an allergic reaction, burn, or another injury.
Cyber Liability Insurance
If your soap making business has a website that contains customer information and/or payment methods, you will need cyber liability insurance in order to protect you against lawsuits that are the result of your website getting hacked.
Workers’ Compensation Insurance
Workers’ compensation insurance is needed if you employ other individuals to help you manufacture and/or sell your soap on your property. This insurance pays for medical bills and other expenses that are caused by on-the-job injuries.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your soap making business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Soap Making Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial 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.
"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.
Yes you do, although this isn’t a legal requirement.
This is because you will want to get your business insurance before any disputes arise, and the safest way to go about doing this is to ensure that you have it before you begin interacting with clients.
All in all, this can end up saving you thousands of dollars in the long term.
Not necessarily. Certain exceptions may be written directly into your soap making business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.