Anyone sell toys or furniture for kids? Liability issues?

[Josh Reet]

Does anyone here sell wood toys or furniture that they have made for children? I'm thinking arts fair type thing rather than "buddy at work paid me to make his kids a bunkbed".

I'm just curious how the liability issue works. Obviously anyone can sue for anything in the USA, and people are especially sensitive to stuff involving their kids. Do you have liability insurance? Did you create a LLC or incorporate your business? Are you just flying without a net?

I ask because I've had a couple ideas of stuff that I am pretty sure I could sell locally or via art/craft fairs. But the income wouldn't come close to being worth the headache that a lawsuit from some idiot would be worth.

[Howard Acheson]

Yes, liability is an issue. Best to discuss with your insurance agent and/or a lawyer.

Be aware also that there are coming regulations requiring the certified testing of toys or other items intended for children. Has to do with hazardous materials like lead or other chemicals in wood or decoration.

[David DeCristoforo]

It's not just the lawsuits from individuals you have to worry about. I had a friend who manufactured bunk beds. Thousands of them were sold through various outlets. One day he got a call from someone in the Fed. Govt. informing him that the regulations for safety rails had changed and they wanted him to recall all of his beds and retrofit them with new rails that were in compliance with the new regs. At first, he laughed them off but after he realized that they were very serious, he had to close up shop. He and his wife quietly packed up the shop one weekend and slipped out of town to points unknown, never to be seen in these parts again....

[Josh Reet]

Yes, liability is an issue. Best to discuss with your insurance agent and/or a lawyer.

Be aware also that there are coming regulations requiring the certified testing of toys or other items intended for children. Has to do with hazardous materials like lead or other chemicals in wood or decoration.

Yeah, I know it's an issue. I was hoping to hear from some folks here. Though now that I think about it, this might be the sort of thing that people are hesitant to talk about publicly with their name attached. So any PM's would be welcome as well.

I know what I'm going to hear if I go to the insurance agent. But that's his job, sell insurance.

[Josh Reet]

It's not just the lawsuits from individuals you have to worry about. I had a friend who manufactured bunk beds. Thousands of them were sold through various outlets. One day he got a call from someone in the Fed. Govt. informing him that the regulations for safety rails had changed and they wanted him to recall all of his beds and retrofit them with new rails that were in compliance with the new regs. At first, he laughed them off but after he realized that they were very serious, he had to close up shop. He and his wife quietly packed up the shop one weekend and slipped out of town to points unknown, never to be seen in these parts again....

That sucks.

But I don't intend to do anything quite so large scale. A good lesson to keep in mind though.

[Thomas Williams]

Talk to your insurance agent. There may be an endorsement for your current homeowners policy that would provide liability coverage for a home based business. It is not as expensive as you might think.
The real expense of flying without a net" is when you do get sued. The cost of your defense (ie your lawyer) can quickly become way more expensive than the insurance policy. Proving you didn't do anything wrong can be more expensive than being wrong.
Also, in most areas if you are selling goods, you will have to have a vendors license and collect sales tax.

[Mort Stevens]

I only do woodworking as a hobby, but my father sells stuff through various outlets and his philosophy is this; insurance only invites lawsuits, no one is going to sue you for a few hundred thousand, but if you have a 1 million or 4 million policy you can be sure every ambulance chasing lawyer is itching to get their share of it. What he did to protect himself was to set up a master lease on the shop and all the equipment, so that if someone did sue they wouldn't even be able to get that.