However, unforeseen risks can affect your cosmetics business. Because it is a highly competitive and fast-growing industry, you should get business insurance to cover your firm against the unexpected. Notably, the cosmetics industry has its unique set of risks, and finding the right insurance products is paramount. This article highlights critical insurance products that a cosmetics business must have.
Trade Show Insurance
Trade shows are an excellent way for cosmetics business owners to interact with potential customers, investors and industry peers. They also provide an opportunity to get your beauty products out to potential customers. Naturally, attending a trade show is an investment because the money you spend on travel, marketing and booth set-up is worth the business prospects. However, what do you do when you cause bodily injury to someone or damage another attendant's booth at an expo? While you might think that a general or professional liability insurance cover such risks, your policy could contain exclusions relating to trade shows. A trade show insurance cover protects your business against uncertainties during the duration of an expo. For instance, if you perform a free mini-facial on a customer and they develop an allergic reaction, trade show insurance will cover the medical costs.
Product Recall Coverage
Cosmetics businesses that make signature beauty products thrive because they cater to a specific market segment. For example, beauty products made from natural products sell better as customers find more about their benefits. However, issues such as cross-contamination are common in the production of beauty products. It can lead to the release of batches that pose an imminent threat to a customer's body. When it happens, you must remove affected batches from the market. Sadly, product recalls are expensive since you must hire more staff to conduct the recall, notify customers, incur shipping costs and dispose of affected beauty products. A product recall insurance cover takes care of all the costs, allowing you to address the root cause of the problem.
Excess Liability Insurance
Ideally, your primary insurance policy should be enough to cover potential financial loses and damages your cosmetics business incurs. However, some claims can exhaust a policy's limits and other business resources, rendering your cosmetics business bankrupt. For instance, if your skincare products cause skin problems to thousands of customers, your primary insurance policy might not be enough to settle medical costs and compensations. As such, excess liability coverage is vital since it adds to the original policy's limit. Therefore, if compensations exhaust the professional liability insurance limit, excess liability insurance takes over and settles the rest. Most importantly, excess liability insurance protects your cosmetics business from going bankrupt.
Contact a company that offers business insurance for more information.