Do You Need Insurance to Sell Your Own Skin Care Product?

With society's interest in staying healthy and looking good, the amount of cosmetics and skin care products available to consumers continues to increase. If you have a background and experience in cosmetology, esthetics, business or science, you might be able to make a lucrative career creating and selling your own line of skin care products. Although it's not always required, several types of business insurance exist to protect your company against every imaginable type of risk you may encounter.

In most cases, you won't need approval from the FDA to produce and sell your own skin care products. However, it's a good idea to review and follow FDA guidelines. If a customer experiences any type of adverse reaction to your products and reports you to the FDA, your products may be subject to federal investigation, addressed as a public health hazard and ultimately recalled. Carrying liability insurance cannot prevent this from happening, but it covers any damages associated with such claims. For instance, if one or more consumers experience a rash, illness or any type of serious affliction as a result of using your products and sues you -- civilly or in a class action suit -- product liability insurance will protect you against any monetary damages.

The law does not require that you carry property insurance when manufacturing and selling your own skin care products. However, you'll be taking a huge risk operating without some level of coverage to protect your investment. Without property insurance, you will be fully responsible for all monetary losses incurred as a result of theft, vandalism, fire or natural disaster. Such losses include stolen, damaged or destroyed stock, inventories, materials, machinery, equipment and even the building itself. Whether you are working in a home-based business or manufacturing products in your own plant, commercial property insurance is an important component in recouping your losses in such events.

While making and selling your own line of skin care products, it's quite likely that you -- or your employees -- will be responsible for a considerable amount of driving. Basic auto insurance does not cover any type of damages that occur while driving for business purposes. This includes transporting ingredients, materials, employees and delivering products to retailers or individual buyers. You'll need to carry a commercial auto insurance policy to cover such claims.

As an independent manufacturer and retailer of skin care products, you are essentially a self-employed contractor. Unless you have another job that provides you with health insurance, you will have to provide your own personal insurance benefits. If you employ a significant amount of staff members you might also consider providing group health insurance benefits and workman's compensation is typically required.