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Selling small bits and legal cover

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L2wis

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Hi all,

I really been looking into the far future at the possibility of selling some small turned items such as pens, tea light holders... That kind of stuff, however I stumbled across product liability insurance and the likes and now a bit phased about what I might or might not need.

Would trading under a limited company remove the need for the cover?

What do others do?

I also looked into selling toys as such but from what I can tell you need them to be safety tested and stuff which would rule that out.

Interested to find out previous experiences.
 

L2wis

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at this stage I think I'm going to avoid toys for the time being, thanks for the link though I will have a read.

I contacted a firm regarding product liability yesterday but they said they wouldn't cover me due to my product material being wood and the risk was too great due to splinters!!! :shock:
 

Hudson Carpentry

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I have product insurance for my wooden items so your either working from home or are in touch with the wrong insurers.

Anything you sell professionally to the public that you have manufactured or made should be covered by your insurance. I don't think its a legal requirement and going limited will have other effects on your business that you probably will not desire and im sure it has no bearing on the need for insurance.

Having the insurance means if any harm becomes from your items then your insurance stops you from being sued (well not in a true sense, the insurers feel the hit and not your bank account). If you was a ltd company then its the business that gets sued but again the insurance is the difference from bank corrupt and still trading.

Insurers find it very hard to underwrite for product insurance if your working from home. The difference in price if they do underwrite you working from home is hundreds.

When I was classed as working from my home workshop it was £700 for 2mil product and public (Swanson). Now I have a commercial shop its £600 which also includes machines, tools on site and off, theft and fire, in transport cover and a range of other (Alliaz - throught Lloyds TSB Bank)

HTH
 

L2wis

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That is some really great info there Hudson thank you very much! The insurers I talked to yesterday said that it was something they were not prepared to insure but not to say there wasn't other insurers out there that would insure me.

I think i might need to take a rain check on the whole idea as I only really wanted to sell one or two pens. I have a full time job so wouldn't have much product output.

Perhaps a trade fair would be better suited to myself? But wouldn't you need the same sort of cover for that? I guess Ebay is always an option too. I was really keen on having my online little retail shop.

It's a bit of a pandora box is it not!
 

L2wis

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John regarding craft fairs do you not require the same sort of cover? I think craft fairs might be the sort of route i'm forced down.
 

Jonzjob

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As far as craft fairs were concerned the insurance idea never even crossed my mind. In fact, I doubt that it crossed anyones who was only doing craft fairs, but today is probably so PC and so different to 7 years back?
 

L2wis

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Who knows! I contacted ian at the website above and he was very helpful! Cover for public/product liability starts from £71. Ian also confirmed that his company insure woodworkers / Woodturners.

I'm really pleased as £71 isn't a massive investment.
 

marcros

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i would suggest that you make a stock of items, and get your insurance immediately before you start selling. Whilst £71 isnt a massive investment, it is if you only sell 2 pens a month!
 

L2wis

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thats exactly my plan marcros, I'm going to build up some stock, register as sole trader take up insurance then launch website. (in that order) :)
 

Jensmith

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Are you not going a bit over the top for selling a few pens? It's no more than a hobby really, unless you're making a significant income from it and selling a lot of stuff per week.
 

L2wis

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In some ways I guess so but I wouldn't want the risk of being sued with all the claim and a blame going on these days.
 

paultnl

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I am not a lawyer, but phrases such as "sold as seen", or "no liability accepted" etc. have been seen in a number of sales recepts. Rather than spending money on questionable insurance policies, it may be better to spend it on good legal advice.
 

Hudson Carpentry

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I can only see that one ending in tears.

Sold as seen is normally only protecting yourself from a return if the item don't operate as originally intended or don't look at expected in areas they failed to inspect and wouldn't protect anyone from a fault in the items manufacturing resulting in the end user becoming injured. The term no liability accepted I can see being laughed at in court when little Johny the 3 year old chopped his little finger off and the court side with the mother and the judge utters the sentence "to make such a statement in your sales contract is admitting you know your items are not up to standard, your a discredit to other pen manufactures, I hear by fine you £***,***".

I would imagination no liability accepted would more be for people selling items that hasn't been manufactured by themselves or they do not own copyright etc. This term as a sales condition certainly wouldn't protect the manufacture (craftsman) if there item caused injury or death to the end user if became under normally recommended usage. You could of cause use the term to protect yourself from things like for eg ink leaking onto expensive carpets etc but really that liability would lye with the manufacture of the pen workings anyhow.

It just like when an eBay user puts in there returns policy, returns only accepted if dead on arrival. Wrong they just don't know the law as under the distance selling act you can return any item for any reason (excluding damage of no fault of the seller or currier, also some items are excluded for hygiene reasons like earrings if you have unsealed them and underwear if tried on) and with out giving a reason for upto 14 days after purchase. Infact I have just brought something off someone that stated Returns only accepted if DOA. How many people may know what DOA means??? (non of this is a dig paulntl)

Insurance is always a good thing and £71 a year is excellent. However im with others, if its two pens a month and its not a business then really do you need to take it this far?? Either way you are still liable as you made and sold the item.

Craft fairs like any market are a public event, you and your products are mixing with the general public and public liability is required by law, this may however have been sorted by the event organiser or covered in the grounds insurance anyway. If not the event organiser should at least alert you to this fact so you can get cover, at the same time its also there job to ensure you prove to them before trading that you have cover so liability is pasted. As most craft fairs are on public grounds and small scale insurance is normally covered in your stall fee, after all if someone slips on your product thats on the ground its the responsibility of the market staff to ensure there grounds are safe and they will be liable. This is only true for markets where you are not renting a "pitch" ie your not renting a set size of "pitch/plot". This paragraph is only about public and there safety, non of this paragraph is regarding injury or death to end users that purchase your made items as a result of normal recommended/intended use.

HTH
 

L2wis

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A lot of great info there Hudson, thanks for taking the time to write it. I agree with you that a terms and conditions cannot exclude anyone from trading standards / law. If it could I don't see why anyone would buy the insurance.

@paultnl I think legal advice would certainly clear ny questions up. I'll ask my friend who is married to a lawer if she would know about these things.

The online shop is something I would want to grow so I do feel it's worthwhile exploring these topics despite at the moment looking a bit excessive.

EBay alone would take £1.40 off every pen I sold at £10 and that's before paypal fees are taken off! By running my own online shop it would massively reduce that overhead, that and I think it might be quite fun.
 

Jensmith

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I think you might be surprised how little you may sell. I've had my online shop for 18 months and it's only just got to 2 sales a week. Before that it was 1 every few months.

People don't have much money to spend on stuff and they're also not prepared to pay for your time. I couldn't find a way to make pens profitably. The materials in themselves cost a fair bit for a decent kit.

By all means have a go, but don't be disappointed if you don't sell anything. Just getting people to look at your shop is really hard in itself. Believe me, I know.

I really wouldn't worry about insurance or anything until you find out if you have a product that sells. It's not a business until you're selling a significant amount and you'll be lucky if you make a profit overall.
 
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