There are many things to organise when you are dealing with the processes to set up a candle business. One of the most important aspects to consider is what insurance is recommended for candle makers.
Selling any product comes with risks you may not have anticipated. It makes sense to give yourself as much protection as possible.
In the world of craft makers, you often hear it called craft business insurance. Candles and wax melts have never been as popular as they are today.
Our comprehensive guide on how to set up a candle business takes you through the process of setting up a craft business step by step.
Do You Need Insurance to Make & Sell Candles?
Insurance is an important consideration when making and selling candles. Candles are a product that are burned within the home. There is a very real risk that customers could take legal action against you if a fire happened whilst using your product.
Being self employed opens you up to many vulnerabilities. One of these is the risk of someone making a legal complaint. Therefore, getting adequate insurance protection makes good business sense.
This doesn’t mean relying on your home insurance either – it is unlikely a domestic policy will cover you for business purposes.
Insurance Cover for Craft Stalls & Fairs
Many craft stalls and fair organisers will require businesses to show proof of insurance before booking a table or stall.
It’s events such as craft fairs where you can get your candle business out there and noticed by craft loving customers.
Also, displaying your insurance certificate for your customers will help support your reputation. It ensures you maintain that professional and organised image.
Any type of business that sells its products at craft events should consider public liability insurance for crafters. There are specially designed policies for craft business owners. This is true for candle makers, wax melt businesses, and handmade soap companies. You can be at risk of being liable for an incident just as much as a large company can.
But as a small craft business, it would have a much larger impact, and could mean trading was no longer viable.
See Also: Wax Melt Insurance – advice for wax melt business owners on appropriate insurance cover to consider.
Protect Yourself from Legal Claims
Having a legal claim brought against you can end your small business before it even gets going.
Whether you make candles full time or as a side hustle makes no difference, insurance protects you. Imagine yourself in a situation where a customer takes a candle home, their house burns down and they claim it was faulty. Yes, the customer decided to light the candle and perhaps leave it unattended, but they can still try and blame your product.
Unless you are prepared to suffer huge financial losses, we recommend getting your business insured. The cost of insurance each year is usually less than an hour of a solicitor’s time.
Proper craft business insurance will help protect you from loss of income, legal fees, defamation, and any injury claims. Without such insurance in place, you place yourself at a huge risk.
Your Home Policy Will Not Cover You for Business
Some candle businesses assume that their home policy will cover business items. This can be a costly mistake.
Your home insurance will not cover your small business, even if you run this from your house. The two types of insurance are entirely different and cover separate entities.
You cannot rely on your home insurance. If anything, having a business at home affects your home insurance. Particularly if you have customers visiting your home.
You will need to get in touch with your home insurers and update them with your business details. They may be able to offer you a suitable package for both.
What is Candle Makers Insurance For?
Candle makers’ insurance protects the business from the expense of legal claims, and helps prevent financial losses.
Business owners should consider the impact a business will have on their home too.
You need to consider things such as:-
- Will you be keeping the candle stock in your home? Are there any risks involved with this? Does this stock cost a substantial amount of money?
- Will customers potentially be coming to your home to pick up orders or browse?
- Do you need any expensive equipment to run your business?
- Will you be taking on any employees?
Candle makers insurance policies and what they cover will depend upon your business needs. Let’s look at what policies will commonly cover.
Public Liability Insurance
Public liability insurance is something all small businesses should have.
You should have separate public liability insurance even when working from home. Your domestic policy won’t cover business use. Many crafters showcase their products at fairs and insurance will often be required before participation is allowed.
See also: Craft Stall Public Liability Insurance – our guide to insurance for those attending craft fairs.
It doesn’t matter if your business is big or small, size makes no difference to the legal consequences of a customer making a claim against you. There are different policy levels and prices, depending on your business type.
This means you won’t be liable for the same yearly fee as the bigger companies.
Employers’ Liability Insurance
If you are going to take on staff to help run your candle business then you need employers’ liability insurance.
This will protect your business if an employee claims they were hurt while working for you. Working with candles and hot wax comes with risks so it is important to get this sorted before your employee starts.
Product Liability Insurance
Product liability insurance covers you in the event of an accident with your product. If a customer makes a claim against you, this policy will help protect your business.
There will be certain requirements for this insurance cover to be valid. For candle and wax melt businesses, this would include putting warnings on the packaging and full instructions on how to use the product responsibly.
If you sell a faulty product, this insurance will help with any potential consequences. In most small businesses you operate as a sole trader. This, puts responsibility for any legal action entirely upon your shoulders.
Having your products covered by appropriate insurance will be very reassuring. A legal claim could spell the end of your business.
Stock insurance is a wise idea to have if you hold a lot of your candle stock at once. There can be a lot of money in materials, and the finished product.
Having it stored in your home can put your business at risk of fire or theft. On top of this, there is also the risk of stock being damaged along the way.
Having insurance specifically for your stock can help prevent a loss of income.
Does your candle business need equipment to operate? Then you may need to think about a policy that also covers such equipment.
You might rely on online sales to boost your income. This means anything like a tablet, PC or laptop will be classed as business equipment.
It is easy to confuse home contents insurance with business equipment, however, they are different. You may want to have business equipment insurance if there are resources you rely on to generate an income.
Such insurance can protect your equipment from incidents like:-
- Water damage
- Accidental loss
This is relevant to candle makers and other craft businesses that sell their products online.
Whilst it’s a more unusual product for very small businesses to consider, it’s worth being aware of. Cyber insurance helps protect sensitive online data such as addresses and payment details. If this information falls into the wrong hands, such insurance helps protect you.
It can also cover you with a loss of profits. Should your systems fail for any reason, such insurance will help restore your data.
If you end up with significant custom coming from your own website, this cover may be worth looking into.
When Do You Need Candle Insurance?
You should be sorted with the appropriate insurance for your candle business before your first sale.
From your very first sale as a candle business, you become liable for anything that goes wrong. With the correct policies in place, you protect yourself from any claims that are made. It should be something you sort out once you have set up as a business via HMRC.
Use a bit of discretion here though, if your business is months away from being launched you may wish to wait.
It is worth bearing in mind when you plan to launch, what will be stored in your home and the equipment you need. Accidents can occur at any point so take the insurance out when you feel it is needed.
Put simply, having your wits about you and paying for that insurance means you offer your business a safety net. Without the correct insurance and if something goes wrong, it could be the end and it will be a costly end at that.
You should have insurance in place before you begin selling candles on Etsy. You are solely responsible for this product, even once it has left your online shop. Selling products to the public puts you at all sorts of risks. Get that insurance and you will feel reassured.
It isn’t technically a legal requirement to have insurance to sell candles. However, you put your business at huge financial risk if you choose not to get cover. It also means you may not be able to sell your products at fairs and other events. Many event organisers stipulate their craft traders have and display the appropriate insurance.