The Cosmetic & Beauty Product business is a booming industry. Every year hundreds of new skincare and cosmetics products come to market. For these to reach their full sales potential, many need to appear in retail markets, be added to web stores or be offered on television. In order to do so or be properly protected from claims and suits skincare and cosmetic companies are required to maintain Product Liability Insurance.
Castle Rock Capacity Insurance Agency Currently offers Product Liability Insurance for the Beauty Product and Cosmetic Industry including coverage for:
Skin Cream, Lotion, Age Cream, and Moisturizer
Perfumes & Colognes
Is Product Liability Insurance for Cosmetic Manufacturers & Distributors is Difficult to Obtain?
Not for us. Product Liability for several products are simple to obtain, however the Cosmetic and Skincare Market is much smaller and many insurance carriers will not write Product Insurance for Cosmetics, Skincare Products or Perfumes. However our long list of carriers gives us access to Product Liability Markets many other brokers do not have access to.
Insuring your Cosmetic Products Insurance through us offers you optional benefits such as:
- Product Liability Coverage for discontinued products or prior acts
- Product Liability Coverage for new and start-up businesses
- Product Liability Coverage for anti-age creams, make up, deodorants, lipstick and hair care products.
- Premises Liability for your Retail, Distribution, and Manufacturing facility
- Primary insurance limits are available up to $5,000,000, with excess limits up to $20,000,000
- Blanket Vendors Additional Insured Endorsement Included
- Waiver of Subrogation Endorsement Available
- Primary & Non-Contributory Endorsement Available
- Options available for product recall expense coverages
- With Sales under $200,000 – In many cases Insurance Premiums are available under $1,500.00
Who Should Have Products Liability Insurance?
Anyone that is responsible for the design, manufacture, sale or distribution of a component or end user product. This applies to any business or individual that manufactures his own product or even if the product’s manufacturing is subcontracted out buy another operation, even if the operation is overseas. Keep in mind that although your operation is not technically manufacturing the product, if you directly import the product, you are liable for it; if you designed the product, you are liable for it; if your name is on the product, you are liable for it.
What is the average cost of insurance for a Cosmetic, Skincare or Health & Beauty Aid Product?
Although we are typically asked this question, there is typically no “out of the box” price for the cost of insurance for a skincare manufacturer or distributor so terms like typical, average, customary, standard, normal do not have any bearing. Several factors come into play with regards to rating, such as; the nature of the product, the annual sales volume, your sales stream, the origin of the product. Also, your sales volume and limit of coverage also come into play. In the same way asking the average cost of a make up product means little or nothing when looking at a tube of mascara, because they can easily range from $1.89 up to $30.00 or more, the same applies to insurance, and the company purchasing it.
So… What Does Products Liability Insurance Cost for a Cosmetic Company?
Products liability insurance costs for Cosmetics are much like any other liability insurance product. There no real average rate because they are based on the specific type of product you manufacture, retail or market. There are some products that pose very little potential to cause harm or damage and there are others that have a higher propensity to be risky, and therefore carry higher premiums. We can tell you this, an entry level policy for a cosmetic company can be as low as less than $2,000 a year.
How is a Products Liability Insurance Policy Rated for Cosmetic Companies?
A Products Liability Insurance Policy is rated on several factors.
- If you are not manufacturing the product, does the manufacturer name you as an additional insured on their policy?
- What is the product you are insuring
- How many of these products will be distributed into the market
- What are they used for and who will be using them
- How long are they intended to last
- Who formulated them
- What are the ingredients
- Where are they manufactured
- Who is manufacturing your product
- How clearly defined are the usage instructions, directions and guarantees and or warranties that are provided with the product
- What claims does the manufacturer or distributor make about the product, either in writing, demonstration or in media.
How much Products Liability Insurance do I need for my Cosmetic or Skincare Company?
The amount of coverage required can vary, important factors to consider when shopping product liability insurance limits are: How much coverage do my vendors require me to have to stock my product? What do I stand to lose if our company is sued? Because claims or allegations against cosmetic manufacturers can be severe or even more likely… FREQUENT, you may want to discuss your insurance requirements with vendors or an attorney before making any decisions.