Why can I find ZERO information on Product Liability Insurance??

[nickf18]

I've google'd so many times about ejuice product liability and hardly get any information. Makes you wonder just how many ejuice companies even have insurance.

So does anyone know any info that can possibly answer these questions?

1. Is Calco the only legit and trustworthy ejuice insurer?

2. From the very few posts on Reddit and other vaping communities I have seen it's been said liability insurance will run anywhere from $5,000-$10,000 a year. Is this accurate?

3. Does the price of insurance scale linearly with the amount of sales you make? What if you're just starting out selling online and in stores and have very little sales? How can any new company afford 800-1000$ a month just in insurance alone when starting out?

I've been told to just form an LLC, however if I intend on doing online sales I would have to form an LLC in every single one of the 50 states in the US thus have to pay every single fee associated with forming an LLC in each state? At that point I'd save money just getting insurance. + in California (where I live) to form an LLC is $125 + $800 up front and $800 every year after this.

How do vape companies even start? do they just do shit without insurance and hope it doesn't backfire until they can afford these high insurance costs?


Any information would be great...

Also, feel free to add me on skype if you have more information.. "vowelmachine"

 

[outwest]

I'm sure there are many that don't have product liability insurance, especially if the business owner has very little in the way of assets (or has everything in a relative's name). Those figures of $5,000-$10,000 a year seem a bit steep to me, but I do work in a completely different retail industry.

Regarding vaping industry product liability insurance - A quick google and I found a few different ones. I know there's got to be more out there. I met a lady back around 2010 in Houston that was selling product liability insurance and she said that some of her customers included vape shops (I was vaping when met her). I didn't get her contact info, though, because I already had a company for product liability insurance. I use Haas-Wilkerson for product liability insurance. I dunno if they insure vape companies or not. http://hwins.com/


The LLC would be filed where you are based out of. If you open a physical location in another state, you'd file a trade name registration with that state (in my state that's filed with the Secretary of State, though that may vary depending on the state in question).

While an LLC will protect the owner to a degree (it helps to separate the business's liabilities from the owner's), it doesn't fully absolve the owner from liability. For example, if an employee of an LLC is out on a delivery run, using the company vehicle, decides to get drunk, and runs over a pedestrian, only the LLC's assets are at risk (as well as the employee's assets). If it's discovered that the LLC owner KNEW that the driver was drunk (or knew the employee had a tendency to drive drunk) and let the employee drive anyway, then both the LLC's assets and the owner's assets are at risk. The amount of protection an LLC provides will vary from state to state, depending on state law. Typically, though, any wrongdoing that the owner is directly involved in puts the owner's assets at risk.

When an LLC is formed, it's important to take steps to show the separation of the LLC and you. One important one is to keep financial records that show a distinct separation of assets and to not commingle the assets (e.g. have separate bank accounts and separate credit cards). Other things at http://www.elizabethpottsweinstein.com/llc-protect/

 

[nickf18]

I'm sure there are many that don't have product liability insurance, especially if the business owner has very little in the way of assets (or has everything in a relative's name). Those figures of $5,000-$10,000 a year seem a bit steep to me, but I do work in a completely different retail industry.

Regarding vaping industry product liability insurance - A quick google and I found a few different ones. I know there's got to be more out there. I met a lady back around 2010 in Houston that was selling product liability insurance and she said that some of her customers included vape shops (I was vaping when met her). I didn't get her contact info, though, because I already had a company for product liability insurance. I use Haas-Wilkerson for product liability insurance. I dunno if they insure vape companies or not. http://hwins.com/


The LLC would be filed where you are based out of. If you open a physical location in another state, you'd file a trade name registration with that state (in my state that's filed with the Secretary of State, though that may vary depending on the state in question).

While an LLC will protect the owner to a degree (it helps to separate the business's liabilities from the owner's), it doesn't fully absolve the owner from liability. For example, if an employee of an LLC is out on a delivery run, using the company vehicle, decides to get drunk, and runs over a pedestrian, only the LLC's assets are at risk (as well as the employee's assets). If it's discovered that the LLC owner KNEW that the driver was drunk (or knew the employee had a tendency to drive drunk) and let the employee drive anyway, then both the LLC's assets and the owner's assets are at risk. The amount of protection an LLC provides will vary from state to state, depending on state law. Typically, though, any wrongdoing that the owner is directly involved in puts the owner's assets at risk.

When an LLC is formed, it's important to take steps to show the separation of the LLC and you. One important one is to keep financial records that show a distinct separation of assets and to not commingle the assets (e.g. have separate bank accounts and separate credit cards). Other things at http://www.elizabethpottsweinstein.com/llc-protect/

Thanks for the reply. I've been reading online that for INTRASTATE commerce I would have to form an LLC in each state I'm operating in. however I've also read that simply shipping to your customers from the home state is merely INTERSTATE commerce and states cannot require you to form an LLC in their state for doing that.

Do you know if this is true?

I would be making, storing and shipping all products FROM California to other states.

 

[outwest]

Well, I'm not an attorney (and thus none of this should be taken as legal advice), but I've never known of anyone having to file LLC formation paperwork in more than one state. For example, my sister and another party were co-owners of an LLC. She lived in one state, the other party in another. The LLC was formed in the other party's state (for tax purposes the other party's state was a better choice). They did business in other states but did not file an LLC in each of the states. They filed trade name registrations in the other states. Besides, that'd be like a corporation filing their incorporation paperwork in every state, which would be similar to your parents getting a birth certificate for you in every state. It's not how it works. Only one LLC would exist. If you file LLC paperwork in every state, that'd be telling each state that you own multiple LLCs (one in every state).

As for interstate commerce, since you're not physically located in the other states, the other states have no jurisdiction over you or your LLC.

You don't even have to file your LLC creation paperwork in your home state. If you want, you can file it in Delaware or any other state. You would, though, then have to file additional paperwork in your state (in mine it's called Trade Name Registration, and other states would call it something similar). Essentially, where the LLC is formed, that state considers it a domestic company. If you do business in other states (and by that I mean physically go there and set up a shop, I'm not talking about sending mail to a customer) then you would file the necessary paperwork with the state for a foreign company to do business in the state. If you form your LLC in Delaware, then it's a domestic company as far as Delaware is concerned, but your home state of Cali would consider it a foreign company and since your business is in Cali, you'd have to file the paperwork with Cali for a foreign company to do business.

 

[outwest]

To expand on this: Amazon.com, Inc., is a Delaware corporation. You know how you often see things like, "Bank XYZ, a Delaware corporation"? If Amazon filed their incorporation paperwork in every state, theirs would read: Amazon.com, Inc., an Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida. . . Wisconsin, Wyoming corporation. Like I already posted, that's not how it works.

That being said, Amazon.com, Inc. (a Delaware corporation) does wholly own a variety of subsidiaries that have names like Amazon.com LLC (a Delaware company), Amazon, Inc. (a Nevada corporation), Amazon Services LLC (a Nevada company), A2Z Gift Certificates, Inc. (an Idaho corporation), etc. They did this to separate various bits of it from one another and to help prevent the piercing of the corporate veil. It has nothing to do with state requirements. If, for example, there's a class action lawsuit against A2Z Gift Certificates, Inc., then (generally speaking) only the properties of A2Z Gift Certificates would be at risk. If you were to open multiple brick and mortars, in various states, then that would be a reason to file formation paperwork with each of those states (using slightly different names for each and having a parent corporation that owns all of them). That way, if one store were to do something that caused a lawsuit, it would help to protect the assets of the parent company and the other shops.

 

[Larry J]

The advice that has been given here is quite good. However, if you're seriously looking for liability insurance or need advice on forming a business, this forum and Google are not the places you should be checking. Contact a qualified insurance carrier and an attorney.

 

[Whiskey]

Taking a guess here, but maybe because it isn't regulated.........yet..........

 

[Huckleberried]

Sliding this over to Shop Tall/New Vendors