Open your doors and look what comes in...
Posted: Mon Mar 21, 2011 8:42 am
Well, at least for me, my search engine optimization is working...last week an unsolicited quote request arrived via email. The initial message asked for a quote for liability coverage for 'products manufactured in the home, to sell at farmer's markets and events, need to easily add additional insureds as events come up.'
OK, I took this to mean GL + Products liability, right? Not that difficult to do...I've got surplus lines markets that do this sort of thing...so I return the email by saying that in order to submit a proper quote, I will need a few minutes to chat and getting a quote is likely to feel intrusive to the business owner who's never gone through the process, but I will need details about the business and also some idea of what goes into the home manufactured products because that's what a company will base its rate on. Oh, and I also gave a broad price range of a few thousand dollars per year so that it doesn't come as sticker shock to the uninitiated.
Well, back comes an email saying that she is 'shocked' at the proposed pricing and that she's coming out of an RLI home business policy that has a cap of $5000 per year in gross revenue and she plowed through that in her first 3 months, and that she is making organic cosmetic products and selling them at farmer's market type venues and her RLI policy was only $250 per year and how can I stay in business ripping people off, and so on and so on....(you guys saw this coming, right?)
So, I chuckle, shrug my shoulders, and send a reply stating that the RLI type policy, or any farmer's market vendor policy is likely to only include GL and product liability is most likely not covered, and if indeed a limited GL policy was her goal, it could best be served by perhaps her personal lines agent, and she should just be aware of the risk of not covering products and completed operations.
After the interaction was done, I couldn't help but think what would happen to this person should sombody buy and use her product (perhaps made in the kitchen) and develop a skin rash, or worse and then ask for compensation, or medical expenses or hire an attorney...that would be the end of the business, and likely whatever lifestyle this vendor had risen to. And of course, imagine her surprise and outrage when the GL carrier denied coverage...after all, isn't 'liability' just for this kind of happening? And finally the agent who either did not, or could not explain the difference in coverage between GL and Products and Completed Ops.
I completely understand the hesitation of someone grossing $30K per year not wanting to spend $4000 on insurance, but holly cow, this is just a claim and disaster waiting to happen. All it will take is one person having a skin sensitivity to whatever is in the concoction.
I'm glad I could be a part of the education process.
OK, I took this to mean GL + Products liability, right? Not that difficult to do...I've got surplus lines markets that do this sort of thing...so I return the email by saying that in order to submit a proper quote, I will need a few minutes to chat and getting a quote is likely to feel intrusive to the business owner who's never gone through the process, but I will need details about the business and also some idea of what goes into the home manufactured products because that's what a company will base its rate on. Oh, and I also gave a broad price range of a few thousand dollars per year so that it doesn't come as sticker shock to the uninitiated.
Well, back comes an email saying that she is 'shocked' at the proposed pricing and that she's coming out of an RLI home business policy that has a cap of $5000 per year in gross revenue and she plowed through that in her first 3 months, and that she is making organic cosmetic products and selling them at farmer's market type venues and her RLI policy was only $250 per year and how can I stay in business ripping people off, and so on and so on....(you guys saw this coming, right?)
So, I chuckle, shrug my shoulders, and send a reply stating that the RLI type policy, or any farmer's market vendor policy is likely to only include GL and product liability is most likely not covered, and if indeed a limited GL policy was her goal, it could best be served by perhaps her personal lines agent, and she should just be aware of the risk of not covering products and completed operations.
After the interaction was done, I couldn't help but think what would happen to this person should sombody buy and use her product (perhaps made in the kitchen) and develop a skin rash, or worse and then ask for compensation, or medical expenses or hire an attorney...that would be the end of the business, and likely whatever lifestyle this vendor had risen to. And of course, imagine her surprise and outrage when the GL carrier denied coverage...after all, isn't 'liability' just for this kind of happening? And finally the agent who either did not, or could not explain the difference in coverage between GL and Products and Completed Ops.
I completely understand the hesitation of someone grossing $30K per year not wanting to spend $4000 on insurance, but holly cow, this is just a claim and disaster waiting to happen. All it will take is one person having a skin sensitivity to whatever is in the concoction.
I'm glad I could be a part of the education process.