The Essential Insurance Guide for Product Businesses – with Gary Ross, Blip

Welcome to the bring your product idea to Life podcast. This is the podcast for you if you're getting started selling products or if you'd like to create your own product to sell.

I'm Vicki Weinberg, a product creation coach and Amazon expert. Every week I share friendly practical advice as well as inspirational stories from small businesses. Let's get started. Hello.

So today I'm speaking with Gary Ross from Blip. I've actually invited Gary to join me on the podcast because I wanted to do an episode for you all about insurance.

Now, please don't turn off, please don't think this is boring. Having the right insurance for your business is vital.

And in this episode, Gary talks through the types of insurance you might need, what they all cover and what happens when everything goes wrong. And you're going to find out insurance isn't boring. Having insurance for your business, for yourself, is absolutely vital.

And Gary makes it all so, so simple and easy to understand. I really hope you enjoyed this episode. It may be one to come back to. There is tons of value here, so I hope you enj. So.

Hi, Gary, thank you so much for being here.

Lovely to be here, Vicki.

Well, can we please start with you? Give an introduction to yourself, your business and what you do.

Right. Well, my name's Gary Ross and my business is just a Blip. We're an insurance provider and we are focused on small business insurance.

I founded Blip probably two or three years ago now, having done 40 years in the insurance world, in the corporate insurance world, finalising my career running a Lloyd's syndicate, having started at 18 in the claims department.

And what I wanted to do is I wanted to create a proposition for small businesses, knowing that the premiums for small businesses are inflated by the cost of getting the business on the books. So I wanted to go direct to our customers, cutting out that cost, giving them a good premium and at the same time letting them share in our profits.

That's what Blip's all about.

Amazing. Thank you. Thank you so much for speaking with me today. So my audience is small businesses.

It's brilliant you've come on because insurance is a topic we haven't covered before, but I think it's a really important one. And I've certainly found through some of the businesses that I've spoken to, and I'm sure you found the same. Not everyone.

Well, hopefully everyone has insurance, but maybe not everyone has all the insurance to cover them for all the things they need. Maybe they don't know what sort of insurance is out there, what they need to be looking at. So hopefully we can go through all of that today.

So let's start with what types of insurance might a product business need? So we can talk about product business specifically, because that's who my audience are.

So when we're talking about those types of businesses, what are some of the types of insurance that they may need to consider?

But when we talk about a product business, are we talking about people that make sell tangible things?

Yes, absolutely, yes.

The first thing that they need to consider is that their main risk is accident. They're out and about, they're making things.

So they really need to consider primarily looking at public liability, because public liability will protect you against accidents that occur while you're running your business.

So for example, if you are, I don't know, if you're building something and you drop a hammer, it bounces and hits next door's brand new car, that's the sort of accident that we're talking about and that will be covered. So it provides cover for accidents that result in bodily injury or property damage. I've just talked to you about property damage.

But of course that hammer could have bounced and hit somebody on the head, which could have caused a catastrophic injury. So that's the first thing. The second thing, as you're a product business, you may very well be making and selling things.

So therefore you need to think about products liability.

Because when you sell that candle or you make that healthy drink at a farmer's market, you know, someone takes that candle home and it causes explodes for whatever reason, causes them burns, injury, maybe even burns down their house, that is product liability exposure. So you need to make sure you've got that covered.

Similarly with a drink example, you know, upset someone's stomach, there was something in it that you didn't tell them about. They had an allergic reaction. That's all products liability.

And products liability not only is when you make something, but even when you sell something or handle something. So you just need to make sure that your public liability policy provides that cover as well. And if it's not excluded, it's usually covered.

So that's what I would say. And then there's ancillary coverages as well.

Can I just ask Gary? So coming back, so when you say you handle products, so let's just say you're a business, you don't make your own products.

Maybe you import products to sell or you curate products so they're not, this is the product necessarily isn't your intellectual property, but you are this, you are selling it. Does that product liability insurance cover you there as well?

Yeah. If you touch it, then effectively you need to protect yourself for, for that product.

Because if you think, you know, you could buy something in and then you sell it on, and by virtue of the fact that you've sold it on, you've attached yourself to that product, you know, if something happens, someone could sue you because you were the primary contact point, because you sold it. And, you know, it's possible that the people that you bought it from are no longer trading. So where does that liability sit?

Now, I'm not saying that you'll be found 100% liable for something that you just sold on, but you just don't know. But your policy would cover that as well. So if you sell it or handle it, that would all constitute a product liability exposure.

Brilliant. Thank you. And I've got one other question on product liability, if that's okay. And is that.

And that is, does product liability cover any type of product or do you need specialist or special insurance if you're selling, I don't know, ingestible, so things you eat or products that go on, you know, skin care, for example, goes onto your body. Is insurance slightly different or does product liability cover it all?

You know, the insurance is pretty much the same, but if you're talking about something very specialist, say like medical, we sort of.

You're sort of borrowing on the medical malpractice with inject injectables, then the likelihood is that your standard policy that you would be able to buy online would probably have some sort of restriction for those sorts of products. So a standard product policy would provide that unless it's excluded.

And you would generally find that medical devices injectables are excluded and you'd need a specialist cover. And one of the reasons for that is that sometimes it's more risky, basically. And also there could be quite a delay in the loss becoming apparent.

You know, you could inject somebody and it could be years before the injury manifests itself.

Perfect, thank you.

Sorry to ask so many questions, but I'm aware that my audience sells like a wide range of things, so I thought, I'm trying to answer the questions for everyone. Perfect. So I'll let you get back.

Gary, you were talking about the other types of insurance a product business might need, so I'll let you get back to your list.

Right. So if I always look at it like a gate. Right, so you said that your audience are people that produce things. Right.

But if you look at the gate, just to talk about professional Indemnity.

If you provide advice to somebody so you're, you're giving them advice about their sales network or to management advice, you know, the damage that usually results from that is a financial loss because of that advice. You know, the advice wasn't very good, there was a financial loss.

So it's almost like if you're an office based risk and you sit here like I am and I'm giving advice, then you know, generally you need to go the professional indemnity route. If you're out and about, it's the public liability products route which we just discussed.

Because that's the primary risk that your, what your activity is going to cause. Irrespective of that, if you have employees, you will need to buy employers liability insurance. That's a statutory requirement.

The minimum limit needs to be 5 million.

And so if you've got people on payroll, that's an easy thing because if they're on payroll, they're an employee and therefore you need to provide that insurance.

And that insurance is designed, if something happens to that employee as a result of their employment with you, there's a policy there to protect you and to protect them, which is why it's a statutory requirement.

But you have to think about if you have anyone that works for you, whether a temporary staff, if they are working for you, in other words, you direct them, they're working under your control. They also could be deemed an employee. So you need, it's quite a broad definition, not just if someone's on payroll. There are exceptions.

So if you're employing close family members, you don't generally need it. It's all in the statute. But it's pretty hard going.

But you can go to the health and safety executive and it gives you a nice little, a lot better explanation than I've just given you.

That's useful to know though, because I'm guessing that means, let's say someone has, I don't know, they have a ten pin a few days a week to pack orders. Let's say that's something that's quite common that people might have. You might not employ that person, you might pay them an hourly rate.

However, if something happened, they slice themselves open, cut and open a box or something, you're liable, is that right?

Absolutely. And what's important is your public liability policy will exclude employees. Employees because it's designed by third parties.

So you know, and it will usually have an employee exclusion because the. Obviously the idea is it goes under an employer's liability cover. So you know, you have to have to be aware of that. And I think so it's.

If you have any form of employee, then you need to look for employees liability cover.

Brilliant, thank you. And what if you are, you work for yourself, it's literally, it's just you.

Is there any sort of insurance you might want to take as a self employed person or as a business owner that protects you?

I would say that it's even more important if you are a sole trader because whether you, whether it's just you working in your business, you know, the risks that I just discussed, I mean they're a bit extreme. The candle exploding, the bouncing hammer, you know, the drink, everything else.

But you know, accidents do happen and if you're found liable for that, you will be sued as the individual.

And if you are, if you haven't got the benefits of the corporate umbrella, if you like, in other words, you're not a limited company, then all of your assets will be at risk.

So in my little example of the, you know, let's take the exploding candle, you know, someone's house burns down, you know, let's just say they've got a boat, it's a 300,000 pound house, they're going to claim 300,000 pound off of you, Vicky, and therefore you can, all your assets will be at risk. So you'd have to sell your own house to pay for theirs. Right.

So it doesn't matter whether you're a sole trader working the business on your own, that doesn't change the risk and it doesn't change the fact that you should think about protecting that risk through public liability, you know, and professional indemnity. If you're giving advice, you know, I think that that's very important, particularly if you're a sole trader.

Brilliant, thank you. And what about self employed insurance, what's that? Because I've heard of that, but I'm not sure what that is.

Well, self employed insurance, I mean, I don't know what that means in this context, but one of the things that you need to think about is I've just described the risks to the business and the risks to the activities that you do. Right. And I would say that's almost like a function of your product.

Whether that's advice, whether that's candles, hammers, whatever you want to call it, Right. You as an individual do not necessarily have all of the benefits that you would have if you were working for a company.

So it's really more about income protection and that can be very expensive, to be honest, because it's an expensive coverage, good benefit. It's not something that we provide at Blip, but I think it's something that people should definitely look at.

What we provide is personal accident cover.

So in other words, if you are, I don't know, if you're a gardener and you dislocate your shoulder playing rugby on the Saturday, which means you can't do any gardening for a period, personal accident basically will provide you an income for a period as a result of an accident. That means that you've got a temporary disability, which means you can't work. It will equally cover if you've got a permanent disability.

So I think when people are referring to that, that's what they're talking about.

It's if you fall ill and there's some sort of benefit cover that you might have, you know, it's all about, you know, term life insurance or life insurance, because a lot of those things that you get being part of a bigger company, which you don't get when you're working for yourself. So you need to think about what your own protections need to be.

Brilliant. Thank you. And have we missed anything else off the list of insurances people might want to consider as a starting point, do you think?

Well, we looked at the big ones, didn't we? Right, we looked, we did, we looked at the, you know, the, the effect of your activities could have.

And I think the second part of that is what do you need to be able to do those activities?

So in other words, you know, you've probably got some business equipment, so you might want to ensure that, you know, particularly if, you know, you might have some, some, some larger machinery. So that'd be more, more contents rather than the handheld stuff. So I think you need to think about that.

And of course there is also goods in transit as we describe it.

So if you have things that have been sent to people, whether that is using a haulier or whether you've driven up the road and delivered it yourself and it was in your car or van. So you know, those things could all.

There could be accidents, you know, there could be a fire on board, I don't know, the, the local Amazon truck which wipes out, you know, all that lovely painting that you've just for somebody, I don't know. So, you know, think about that, that sort of goods in transit cover. So which is the sort of things that make your business run.

So that's a first party cover as we describe it. So, you know, you have a loss, you lose your, you lose your.

I don't know your drill or your, or whatever you're doing, and so you need to replace that. So it's a bit about that contents cover that you have on your house, you know, get, get you back to a position where you're able to carry on.

Brilliant, thank you. And coming back to the stock, I just want to ask you more about that sort of insurance you mentioned, stock in transit.

So I guess that's if you're sending, I don't know, say you're sending your goods to an Amazon warehouse and yeah, the truck explodes. That's quite extreme example.

But is, does it cover you for things like that or is it simply when you're sending your stock to customers via Royal Mail or every. Or however you do it, or both.

However you choose to send it, you know, I mean, unless there's an explicit exclusion. But if you bought that cover, in effect, you'd have, there'd be double insurance in reality.

Because if that Amazon truck explodes, as we've just described it, you know, clearly you've got a contract with Amazon, you know, they destroyed your. Whatever you were transporting and they would reimburse you for the cost. Right. Equally, you've got your own insurance which would also pay out.

And you know, in the world of insurance, you can't collect twice, so, you know, either one would pay or the other. And in that particular circumstance, you'd probably claim from Amazon because clearly it was their fault.

If for whatever reason they wouldn't pay or there was something, then you'd fall back on your own cover.

Brilliant. Thank you. And what about goods not in transit?

So let's just say you store your products in a warehouse or maybe your garage or wherever you have it, and there's a flood and your stock gets completely wiped out. Is there insurance you can take out to protect you for that kind of thing?

Stock, stock and contents insurance.

Perfect. And that, and that covers your stock wherever it's held.

Usually you'd have to, you have to say where it's going to be held. And there would normally be some security requirements. I mean, for example, you know, there might be certain locks.

You need to make sure it's locked because you know the risk.

One of the bigger risks is if it's, if it's stolen, theft, if it's kept outside and it's an open shed, you would, you know, there would, you know, weather damage might not be covered, so you would have to have a little look. But most stuff would be pretty, pretty obvious. I mean, no one would insure you if you left Everything out in the weather, would they?

No. That mean it's almost like your car isn't. You have to tell them whether your car is going to be on your drive or in your garage, that kind of thing.

Thing.

But what I would caution is people do have to have to read their policy and I understand the policy is quite a daunting document. Blip. Our policy wording is 15 pages for the main cover.

But even if you've got a 50 page policy, you know, go to the section that talks about contents and just have a look at the exclusions.

You know, they may not be the easiest things to read, but just read them, make sure you've got the right cover or there's nothing explicit that says, you know, that you have to have, I don't know, barred windows or whatever so that you actually can make sure you've got the COVID that you need. And if you don't understand something, then ask your insurance provider.

Perfect, thank you.

Because that was something I was going to touch on before we move on is I think that hopefully we're not overwhelming people, but I'm thinking for anyone who's running a product business listening to this now, who doesn't have some or all of these insurances in place, it could actually feel quite daunting to think, oh, I don't have this, I don't have this. What about this? Is that something you do at Blip? Are you able to take businesses through the type of COVID they need?

We can talk generally about the covers and we've just introduced some video explainers on our website where you can click on little icons and it will tell you what product liability is or what employers liability is, etc. And we're looking to roll that because we are primarily an online insurance provider and the reason for that is because we're direct to our customer.

Having said that, you know, there's an icon you can click and ask questions, there's a number that you can call and you'll go through to our call centre, which is in North London and talk to somebody and if they can't answer the question, it ultimately bounces back to me and I will email someone back or give them a call because I, I think I've worked in insurance all my life. Right. It's my little passion, which is sad. But you know, we, we've had, we've had a, a hairdresser by professional indemnity exclusion.

So in other words, she was buying cover for a financial loss as a result of advice. Right, well, that's almost impossible, isn't it?

You know, your hair might fall out, but that's not covered under, under a professional indemnity policy. Right.

So we reached out to her and said, look, we see you've bought this, but actually, did you actually mean to the public liability would cover you for this. And actually she bought hired plant. And hired plant is when you get a digger in to lift someone's patio.

Clearly I'll be very surprised if a hair dryer was going to fall in. Do you know, it should have been business equipment. So it's really a question of trying to guide people through, through what they need.

And that's why we're looking to try and push out the, the video explainers so that you can, I mean, you'll get me.

Unfortunately, that's explaining the different types of covers because people don't understand and I think it does cause people, people a bit scared and they quite easily go down the wrong route.

And a lot of insurance provider, you get lots and lots of options for things that you may not even need without actually understanding what your base is. And you need to understand your base.

That's brilliant. Thank you. And I'll make sure we link to your website in the show notes. And thank you for explaining everything so clearly on this podcast.

Well, I'm not, I'm not done, by the way, Gary, but thank you for explaining everything so clearly because I think this will be really useful for people who just listening to this for the first time and thinking, do I need this? Do I need that? It just shines a light on what sort of insurance is available.

Is there, My next question is, is there insurance specifically for selling on Amazon or other online retailers? Is that, is that an insurance that exists?

I don't know why you would need a specific insurance.

You know, if you buy an insurance policy that provides you with your public liability, your products liability, whether you sell through Amazon or not. It doesn't, it doesn't, doesn't matter. I mean, you know, you could, you could sell online. Who doesn't sell online these days, right?

So if you're at your farmer's market on Saturday selling, I don't know, whatever, you're selling candles in my example, but you're also selling them via Amazon. You don't need a specific insurance for that.

All you would need to do is just check that your standard insurance doesn't exclude online sales, which I don't see why it would because ours doesn't put it that way. So, you know, you would just need to buy a Standard cover. But you need to make sure the covers we've discussed before are in your policy.

Perfect, thank you. That was a question I had from my community about whether they needed to have specific insurance for selling on online marketplaces.

So that's really useful to know. Thank you. But it sounds like all of the insurances you've already covered cover you wherever you're selling your products. Yes, yes, perfect.

And there's nothing specifically you need for selling online. So when, if you're taking payments, for example, there's nothing specific you need for that?

I don't believe so, because the payment method will be via Amazon pretty much, or whoever. So, you know, I don't, I don't, I don't see you need a specific insurance.

Perfect. Even if you're selling on your own website and people are making payments.

But I suppose wherever your website's hosted, they would be liable, wouldn't they, for the payment processing side?

Yeah, that would be my understanding.

Thank you. Yes.

There's just a lot, isn't there to think about when you start thinking about all the things that could go wrong, you think there's actually a lot. Which leads me on to have you got any examples, actually?

I mean, maybe this isn't taking us down a good path, but have you got any examples where maybe clients you've worked with or stories you've heard over the years where having adequate insurance has really helped somebody because they've had that cover in place? Because I think it's all too easy to say, oh, I won't bother getting cover for that. I won't need that. I'm sure something will never happen.

I, I would, I mean, clearly I've only ever dealt with the people that had cover because otherwise I, you know, yeah, wouldn't, wouldn't come to me. We, we, we, I mean, interesting stories if you like.

You know, we had a, a customer or a client rather, that had a, a retail outlet that was effectively a hardware operation and one of their customers, a box of hinges, fell off one of the top shelves, hit someone on the head. That's not a particular tragedy. A bit annoying.

But they had meningitis as a result because they had, it's called cochlear meningitis and effectively there were spores at the base of the, of the neck which, when the hinge hit, allegedly caused them to disperse, which caused meningitis which wasn't treated, which resulted in catastrophic brain damage. So that one little accident in that little retail store was a million plus claim, actually.

And I actually handled that Claim personally, when I was a young adjuster and I remember taking the telephone call when the, when the, when the jury came back and you know, we were expecting it because there were, it was a bit, it wasn't particularly transparent as whether the meningitis already existed, etc. Etc. So when the, when the jury returned a verdict of a couple of million, that was a bit of a shock.

And, and if it was a shock to us as the insurer, you can imagine what it would have been to the, to the owner of those premises. So that was one example, because I think the thing I would like, you know, you just don't know how these claims come in.

You know, we, you know, the other thing I would say is that we've probably all been involved in a motor accident in our lives because that's the big things.

What, you know, we, most of us touch insurance and how often have you maybe just touched that car in front of, and they get out, there's no damage, and you say, okay, we exchange details and then a few days later you find, oh, they had whiplash. And clearly, one could argue they didn't.

And then, you know, you'd have to deal with all of that if you don't go through your insurer and who wants that?

I think the big thing is that, you know, if any of these things happen, if you've got insurance, you just pass that over to the insurance company and yes, they will deal with the big picture, so the costs and everything associated with it and any damages, but it's the softer stuff that they'll just take over the claim for you. You haven't got to deal with that person that said they got whiplash. And your natural inclination might be to say you haven't got.

It's ridiculous because, you know, you feel passionate because it was your, you were driving the car and it was only a little touch. We have policyholders where a small thing happens in a salon, eyelash being attached.

The customer then maintains that they had an eye problem as a result, didn't mention it for a week or so. And all of a sudden, and you get passionate about it. You say, well, actually your insurance company will take the passion out. They will deal with it.

I think the most important thing is, and this is why I do think insurers let themselves down a little bit, is that, you know, the policyholder or the person that's happened to, they like to be kept advised because it's their business, it's their passion. And I think that's, that's, you Know, that's, that's, that's one of the things I would say.

But yeah, with lots of interesting claims, usually quite, unfortunately not very funny, but quite horrific. We insured a dive boat owner and the dive master forgot to turn the engine off when he told everybody to get in the water.

So a young 16 year old lad went under the arm, under the propeller, lost part of his skull, permanently disabled. Brain damage. Another claim. I had to go and meet the parents and try to come to some solution.

So we gave him, you know, what was needed in some sort of structured settlement arrangement. So yeah, I mean it's the, it's the raw side of life when, because what we sell, Vicky, is a promise to pay.

I mean you buy a piece of paper and you pay money for it, but it is just a piece of paper. But it is a promise. It's a promise when it all goes a bit wrong that there'll be, that the insurer will be there to deal with it for you.

And you know, that is incredibly important. But it is only a promise and a promise needs to be kept.

Yes.

And I guess for you as a business owner, it's peace of mind that you, you have, you know, the money will be there if something should happen and you need to reimburse somebody. The money will be there because you're paying for it.

And also I guess it gives you the confidence that yes, should something go wrong, and obviously we all hope nothing ever goes wrong, that it will get resolved.

Yeah, you want to put it in, you want to put it in the drawer and hope you never use it.

Yeah.

Because if you have to use it, something's gone wrong, you know, and it may not be a tragedy if you have a bit of stock that gets water damage or if you lose, I mean it's not gonna be great if you lose your tablet or your, or your computer, but they, those things could, you know, maybe quite manageable, inconvenient and yes, it's going to cause you a cash flow strain, but if some of the other stuff happens, which you can never foresee, you know, that and only those life changing events for whatever's happened, I mean, we've always gone to the extreme, haven't we?

I mean it's probably more, you know, more likely that, you know, you'll damage something on route or something or someone to trip up while you've got your stall out somewhere and they'll, you know, alleged that something snagged and they've ripped their club, whatever. But actually it could be a whole Lot worse than that.

And you just don't want to think, you don't want to worry about any of that, you just want it taken care of. So is a sleep at night fully insured, if you like, cover that you hope you never use?

Yeah, absolutely. So hopefully this has been really useful for anyone who.

Well, I'm hoping everyone listening has insurance their business, but there might be one or two that you're missing potentially. I mean, we spoke about some today that I certainly hadn't heard of.

Gary, what would be your number one piece of advice when it comes to insuring your business? What's the thing message you want to leave people with?

I think that you need to think about what your risk is a little bit, I wouldn't say overthink it, to be honest, because, you know, the insurances are fairly, you know, you've got public liability and you've got professional. So think about that, think about if you give advice and it could have a financial loss. Think about the other one is basically accident.

It's something that you do produce, causes damage to a bit of property or a person, then go that route and then, you know, just, just get, get it, get it bought and think about what, what limit you might need, you know, and that's as short as it's long really. But generally speaking, public liability starts at a million and goes up to 10, goes beyond.

But you know, be a bit realistic and if you've got employers, employees rather, then that's a statutory requirement by law, so you need to top that on as well.

Brilliant. Thank you. Thank you so much for everything that you've shared, Gary. This has been really informative, as I said.

I will put the link to your website in the show notes so people can come over and find more and watch this little video if they want a bit more information on any of the policies. And again, thank you so much.

No, thank you. It's been a pleasure.

Thank you so much for listening. Right to the end of this episode.

Do remember that you can get the full back catalogue and lots of free resources on my website, vickyweinberg.com Please do remember to rate and review this episode if you've enjoyed it, and also share it with a friend who you think might find it useful. Thank you again and see you next week.