I was surprised to learn recently that giving away a product you make is not much different than selling it! You still can be sued if your product causes or is believed to have caused harm!
I've seen posts on making and giving wooden toys away here. If you give away anything you make you might want some protection.
Here's the full story.
I had commercial/business insurance when I started as a pro woodworker. In my first years I had minimal coverage and I got sued. They sued for 100k more than I was covered for. I sweated out the 14 months that it took for the case to be over thinking I may have to pay 100k for this oddball case that was not my fault! The case was settled, my insurance paid it all and I could finally sleep well again. Needless to say I paid for higher liability limits from then on until I got out of the business.
For years now I've been a hobbiest. I make things for fun now. Just for me and my family. When friends offer to pay me to build things I decline. I don't need the money nor do I want the hassles and costs of business insurance, product liability and tax accounting.
However I wanted a challenge, so I found a creative way to have the satisfaction of designing, building and marketing a product without the hassles and liability.
---- Or so I thought.
I made my wife a gift last year. She loved it. Her friends loved it. A friend who's a stylist said "you could sell these for a lot of money". I said no, then thought about it. The stylist friend is young, inexperienced and we wanted to help her with her business. So I agreed to give her the totes for free to sell. I'd get all the fun of designing and making with no deadlines, hassles or liability. I made some samples and everyone was excited. I was very flattered.
I talked with my lawyer recently and told him how creative my idea was to help someone, have fun and avoid liability. He said "No your wrong".
My lawyer said the deal with the stylist would make me a manufacturer from a liability standpoint and commercial/business product liability was recommended. I called off the arrangement with the stylist just before anything got sold, and everyone is sad. Mostly me. Lesson learned.
I asked my lawyer if any products given away by a hobbiest would be covered by homeowners/personal liability and he wasn't sure.
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