“Member benefit insurance” is an integral part of the membership benefits for Soapmaker Members, not an optional add-on.
Why did the HSMG decide to include insurance as a member benefit?
The HSMG implemented the member benefit insurance program in September 2006 as a way for soapmakers to have access to reasonably priced insurance at a time when insurance options for small businesses were severly limited. The lack of affordable insurance was threatening many members’ ability to stay in business and making it extremely difficult for new soapmakers to start businesses. The industry as a whole was being potentially crippled. It took a great deal of research to find a suitable insurance program that could provide the required benefits at an excellent price (considerably below typical business liability insurance).
Why can they offer such good rates?
These rates are based on having a large group of participants. Our group is combining with the Indie Beauty Network so we can get enough participating members to make it worthwhile for the insurance company. With all members of the HSMG and IBN participating it reduces what the insurance companies call “adverse selection”. Adverse selection is the idea that the people who need insurance most will buy it (like a sick person wanting to get health insurance). When everyone participates, the insurance company knows they aren’t just getting the people who feel they are likely to have a claim, so their underwriters think there is less risk – and the price goes down. The whole idea may or may not be true, but that’s one of the things they take into account when calculating the insurance premiums.
Who qualifies for the HSMG member benefit insurance?
An HSMG Soapmaker Member who resides in the 50 US states or Washington DC (US territories and Puerto Rico are excluded). Also, in order to qualify more, than 80% of your sales must come from handcrafted items.
Do I have to have a business in order to qualify for the insurance?
Anytime you make and sell products it can be considered a business, even if you only do it in your own name as a sole proprietorship. You don’t have a registered business name to qualify – and the HSMG won’t be checking your tax returns as to how you report any income you get from selling your soaps!
For more details about the insurance, visit http://www.soapguild.org/member/insurance.php
Maria Gelnett – P&S Chair