# Do these business insurance rates sound right? E-commerce General & Product Liability Cost



## funkygator2 (Apr 15, 2007)

Hello. I plan on doing a store online to sell baby clothing w/ desings. After reading a few tread regarding business insurance (general & product liability), I called an insurance co. who gave me without any property (for inventory stock, your machines, ink, and any other business property) comes to $848.40 per year. It affords the following coverages: 

$2,000,000 per year liability limit 
$1,000,000 products/completed operationsliability per year limit 
$1,000,000 Personal Injurty/Advertising liability 
$1,000,000 per incident liability limit 
$50,000 damage to premises rented to you (i.e. if your business caused damage to your home) 
$5,000 medical payments to others 
$500 liability/property damage deductible per claimant 

Is this price about the going price?


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## stuffnthingz (Oct 1, 2007)

I have similar coverage (I actually compared my plan line for line with your items listed above) for $260 per year with State Farm, you might want to give them a call.

However, I have only 8k in product coverage, perhaps you carry more $ in inventory/blanks (you did not list this value)?

Included in my rate is a rider that covers my laptop in case of damage. Since I am online my laptop is pretty critical to the business.

I recently got the insurance plan because I pack all this equipment and blanks with me to events and one day I realized, wow I have alot of "stuff" I would be very sad if something happened to it all...

Good luck!


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## funkygator2 (Apr 15, 2007)

The quote does not include my equipment which is about worth about $2K (not including inventory). My inventory is low since I am starting (demos/samples only), but I was not asked about it. I am new at this and I am trying to get the insurance first to then get everything rolling. I wasn't aware that state farm had general and product liability for ecommerce. I have them for my vehicles, I will give them a call. Also, are what is your business structure? and do you also design for babies? I was told that the fact that the clothing were for babies made a difference. Not sure if that is so? By the way thanks for the info.


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## stuffnthingz (Oct 1, 2007)

I am online selling out of my home, with a few mobile vending events a year for marketing my websites. The category State Farm's Underwriter put me in was "Catalog Sales". I even said that I do some Web consulting and they lumped it all together in that one category.


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## funkygator2 (Apr 15, 2007)

Wow!!! I like you premium much better than mine! That for sure!! What is your business structure? Do you think that could make a difference?


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## mystysue (Aug 27, 2006)

I have a store front.. and my insurance is very similar to yours in coverage.. but alos includes my equipment which is worth prolly about 40,ooo .. and a rider for others property when out on jobs.. Its in the 600.00 a year range.. .. and its thru allstate.


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## splathead (Dec 4, 2005)

$800 is too much for a home based operation. 

1. Call your homeowners insurance agent and ask about the cost for a business rider.

2. Then go to here to compare costs RLI Home Business Insurance Applications and Rates and see the rates they would charge you. For liability without property it won't be more than $250 or so.


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## scpromos (May 27, 2006)

I have heard that if you sell products for infants or children the cost goes up due to product liability. That might be the reason it's so high, but I would definitely shop it around a bit.


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## peteVA (Nov 11, 2007)

Way too high!


Rates do vary around the country, as they are generally regulated by each state. And with all of the bad luck in Florida in recent years, I'm sure the rates are higher than most. But they should not all business policies to make up for hurricane losses.

You nee to do more shopping and frankly look at the limits. $ 2,000,000 selling tee shirts is more than I'd think you need. Most basic business policies include a $ 1,000,000 ballon that covers anything missed by the specific things mentioned. That should easily cover you.

Keep shopping. I have been paying in the $ 300 range for a real shop and real inventory.
.


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## splathead (Dec 4, 2005)

scpromos said:


> I have heard that if you sell products for infants or children the cost goes up due to product liability.


Toys, yes. Apparel, no.


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## splathead (Dec 4, 2005)

peteVA said:


> You nee to do more shopping and frankly look at the limits. $ 2,000,000 selling tee shirts is more than I'd think you need.


No, this is the limit you should get. It's standard nowadays and if you are going to do a show or festival, this is the limit the promoter is going to require.


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## funkygator2 (Apr 15, 2007)

Thank you guys. My primarly concern is having insurance incase a baby has an allergic reaction to the ink, etc. But I will definately shop arround. I wonder though, if the fact that I told him I was selling off the internet only had anything to do w/ it? Also, since the bus. will be register in florida, but would be primarly online sell, I wonder if I could get insurance from another state?


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## stuffnthingz (Oct 1, 2007)

I asked about the 2 mil and was told it was standard.


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## splathead (Dec 4, 2005)

funkygator2 said:


> Thank you guys. My primarly concern is having insurance incase a baby has an allergic reaction to the ink, etc. But I will definately shop arround. I wonder though, if the fact that I told him I was selling off the internet only had anything to do w/ it? Also, since the bus. will be register in florida, but would be primarly online sell, I wonder if I could get insurance from another state?



Typically insurance is rated based on your home state, but will cover you anywhere in the U.S. Because you are in FL, you pay surcharges due to hurricane assessments, especially on property insurance.

You want to make sure whatever policy you buy has Products Liability. This is the coverage that would protect you against allergic reaction lawsuits.


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## funkygator2 (Apr 15, 2007)

Thanks again. That's what I am hoping to get (2K and product liability.) What do you guys ask for when you call an insurance co. for a quote?


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## pitbell85 (Mar 12, 2008)

Oh boy insurance companies. They want their money but good luck getting them to pay out.


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## LittleDogy (Jan 15, 2008)

Wow,

insurance?........

I'm happy that you are talking about rates. If I am 100% online and I take on the reponsibility of replacing my equipment if I have loss, do I need insurance?

What type of bad things can happen to my company if I am doing onlines sales only?

What do I need to protect myself from?


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## splathead (Dec 4, 2005)

LittleDogy said:


> Wow,
> 
> insurance?........
> 
> ...


Primarily products liability. an example would be if you sold an improperly labeled item and the person who bought it was allergic to it. Or your ink ran in the wash and destroyed a full load of clothes. Stuff like that. Remote, but possible.

If you ever decide to do trade shows or arts/craft fairs, insurance is usually required.


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## sunnydayz (Jun 22, 2007)

My insurance is only $23 per month and that covers liability, equipment and all inventory. The reason also you need it is to cover your business in case your house burns down or something. Regular home owners insurance does not cover business expenses. I was required to have insurance also to make sure my equipemnt was covered for the leasing company. I have well over $20,000 worth of equipment to though


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## TSW2005 (Jul 28, 2006)

I have storefront, and shop. About 1,000 square feet. Also a trailer and complete mobile shop (embroidery, press, cutter, etc). All are insured, 2 mil, like yours, 100K in equiment and product, and covers me in the shop and on the road. $500 ded. 


$810 annual. metlife. 
Mass Policy.


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## action (Jun 19, 2008)

I am a commercial insurance agent, that quote seems a little high for only General Liability Coverage. The coverage listed is General Liability Insurance (GL). The base rate for GL is determined by total annual revenue or anticipated annual revenue and number of employees. There are few other rating factors but these are what make the bulk of the rate.

The more revenue you bring in, the busier you are! This creates greater liability because...well, you are doing more. If you have additional employees that also creates greater liability, now you have others that can generate a loss for you company.

2mil is standard for the commercial insurance industry in general. If you are concerned with allergic reaction to ink the Products/Completed portion of the policy will cover for you loss and this is already included with GL.

I think you shop around! That State Farm price sounds really good!


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## action (Jun 19, 2008)

Every business owner has an exposure!!!!!!!!!!! Insurance is one way to make sure you are covered in case the unforseeable happens. Why do you need insurance? To protect against litiguous claims of trademark infringement, piracy, theft or duplication of intellectial property i.e., logos, proprietary graphic art, chemical reactions to inks...etc. 

Every business owner needs insurance for protection.


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## Teeser (May 14, 2008)

Be sure you contact an independent insurance agent/company who will get quotes from many companies for you. I'm sure you can find a policy for less.


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## Brooklyn Junior (May 20, 2008)

You should consider yourself lucky to get a $848 quote. When insurance companies hear the word "baby" they don't want to get involved. We had a very hard time getting insurance and we payed a lot more than $848 for the same coverage. Keep us posted if you find something cheaper. Good luck
N


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## action (Jun 19, 2008)

Hi Brooklyn Junior aka Nadia!
I am a full time commercial insurance agent here in AZ. I also have a small home business that provides screen printed shirts and embroidery. I will transition this into a full time career, hopefully before the end of next year!
If you are only printing & embroidering on childrens clothing I don't see why it would be a rating factor. If you are paying 848 for a home based business maybe you should shop around. Independant Insurance Brokers (i am a captive agent with Nationwide) have an advantage for finding you a great company at a decent price. You should shop three reputable companies and see which company does the best in providing you with the coverages you need. I've seen huge price differences for the same coverages, there is no reason to pay more for the exact same coverage. It appears by this thread that State Farm has the best price so far, they have a great reputation!


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## funkygator2 (Apr 15, 2007)

Here is the latest quote I got, and I must say that although it's not as inviting as the $260 that TM is paying, is still a whole lot better than the previous quote and it offers more coverage for $376.51. I also found out that my homeowner insurance already covers $2500 worth of bus./personal equipment. If I need more coverage of this type, they said I could call them and add more coverage. Thanks to all of you for the info & suggestions.


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## splathead (Dec 4, 2005)

Good Job! Now take that $500 we saved you.....tell us what bar you are going to be at....and buy us all a drink.


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## Solmu (Aug 15, 2005)

splathead said:


> If you ever decide to do trade shows or arts/craft fairs, insurance is usually required.


I've noticed (here at least) some will take care of it for you, but at an additional fee.


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## vargaslei (Oct 22, 2017)

What insurance are you using if you don't mind saying? Thanks


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