As it is with any business, issues can arise in the smallest of ways—your candle company isn’t excluded from that. How do you keep your business safe while still operating normally? What can you do to make sure you are not liable for any injuries or accidents caused by your products?
Can my candle company be sued?
Yes, your candle company is open to legal action if one of your products is defective or causes personal bodily harm. By purchasing insurance for your business, properly labeling and manufacturing your candles, and consulting legal representation, you can limit your liability in most situations.
While your business can be sued for several reasons, there are ways to limit that possibility. Read on to find out more about what issues you may face legally and how you can reduce that possibility for your business.
As you read, note that any advice in this article is for educational purposes only. Consult your legal representation for more information on how you can protect yourself and your business from any unwanted litigation.
1. Familiarize yourself with the industry standards.
Your company will be making items that your customers burn, and there comes an inherent risk in doing so. The best way to make sure you know what you could be facing when starting your candle making business is getting familiar with the industry’s standards.
The ASTM International provides certain standards on candle products, including but not limited to:
- The definition of “candle” and all accompanying accessories, along with designating Imperial measurements as the industry standard.
- All candles should include fire safety warnings and are unobstructed with the word “WARNING” on the label.
- Glass containers are all checked for their durability and strength, along with setting standards for both transparent and non-transparent glass.
- All emissions from candles are limited and do not cause any adverse health effects. Reducing smoke is also key in this standard.
- All candles are burned away from flammable objects.
- All candles and accessors are used properly and under proper supervision.
2. Set up the proper business structure—usually as an LLC.
The simplest way of making sure your business is covered from liability or legal action is by creating a limited liability company. When you create your new business, it’s important for you to make this determination, because it can affect how you pay your taxes to how you operate day-to-day, not just in your worst-case scenarios.
You still have several options to your business structure. If you decide to become a sole proprietor, you have complete control over your business, but that means your personal accounts and your professional accounts are not separated. This means if you are sued, your personal accounts could also take a hit.
A partnership is another option; this just means that two or more people are owning the same business together. A limited partnership means one person has unlimited liability with the other has limited liability. What that means is that the partner with unlimited liability has more control over the other and all funds are passed through that individual’s account. The limited liability partnership means all partners have equal limited liability.
The best option for a candle making business due to the possibility of legal action is the limited liability company. This means your personal assets are separate from your business assets, so if there is a case where your business is sued, your personal funds and assets cannot be touched. Protecting your assets in this way is the most advisable business structure for a candle making business.
Check out these tips and tricks for running a great candle business!
3. Receive the proper permits and insurance.
Creating your business may incur some fees, including when you create your LLC and your business insurance. No matter whether you create your candles inside the home or in a physical location, you will need to include your business in your personal insurance or seek out business insurance. Most candle making insurance covers bodily injury, property damage, and any other personal injury situations.
You will also need certain licenses to operate. A standard business license will make your business official in the eyes of the government and receiving an employer’s identification number will allow the Internal Revenue Service to collect tax on your product. If you are in your own physical space or shop, you will also need a certificate of occupancy.
What do these do to help you stay out of insurance trouble? These licenses make you official. Not having them can cause problems legally, because you could be operating your business illegally—which certainly won’t help your case if something goes wrong with one of your products.
4. Use the proper equipment and quality supplies to prevent fires.
Because you are creating a product that is set on fire, there is always an inherent risk to your product. Make sure you are using the best supplies for the creation of your candles so you can avoid any manufacturing defect lawsuits.
To help mitigate this possibility, make sure you test all your candles before selling them. Knowing what they do and how they burn is key, and providing additional information to your customers, letting them know that your product has been tested, will help give them peace of mind.
When it comes to the proper supplies or equipment, it really comes down to you and what you decide to use. Different wicks act differently with different types of wax, while different types of wax each have varied melting points. Don’t be afraid to experiment with your chosen supplies to make sure you have a knowledgeable understanding of how they react and how each piece of equipment works in your candle making process.
In most cases, proving that a candle is defective comes down to the candle’s design, manufacturing process, or a mislabeled product. While difficult to prove, you can eliminate doubt by both testing your candles and labelling them properly.
5. Create the proper labeling on your candles.
As explained before, the ASTM International have set aside industry standards for candle makers. One of those items are the candle labels—you can save yourself a lot of hassle by labeling your candles properly.
Firstly, their standards outline that the label should be unobstructed and easily read. If you have a text-only fire safety warning, they should include the safety alert symbol and the word “WARNING” in uppercase bolded letters. A text and pictogram warning must also include the safety alert symbol.
Your labels are also required to include your company name, logo, the candle’s weight, the type of wax that you use, the candle’s scent, and your contact information. If it is incorrectly labeled, you may be liable for injuries or accidents, including any allergic reactions from an improperly labeled scent.
6. Include a disclaimer on your website.
A disclaimer included on your website isn’t just helpful for you, but your customers. This disclaimer can also include your exact process in how you make your candles—disclosing your process isn’t proprietary and you can save yourself some hassle if your customers know exactly how you’re making your candles.
You should also include the proper procedure of lighting and using your products. By providing instructions, you cover yourself and you help your customer understand exactly how your products should be used. By providing that list of how to use your product, you can help reduce the likelihood of you holding the blame—well written, explicitly explained instructions mean that if they are not followed as you say, the person claiming wrongdoing is actually at fault for not using your product the right way, eliminating your liability.
There are ways to protect your candle making business from lawsuits or litigation, as included in the article. Note that all advice should be taken in an educational perspective and does not constitute legal advice. For more information, contact your lawyer or legal counsel to find out how you can protect your business.
The biggest takeaway from considering your legal responsibilities is transparency. The more information you provide to your customers, the less likely you will be liable for any sort of injuries or accidents. Being clear and honest about your process means that you’re not hiding anything—which means it can be incredibly hard to litigate against you.
How much money does it take to start a candle making business out of my house?
Not using a physical storefront lowers the price of starting your own candle making business drastically. Because you only need inventory, your business licenses and insurance, a point-of-sale system and any additional marketing, you can start your business with about $1,500.
Do you need insurance to sell crafts?
If you are selling anything online or in a physical store, it is important to have liability insurance. It is not necessary or required to have such insurance, but if something does go wrong and someone tries to sue you for something that you created, having liability insurance can ensure that your business does not go under from the possible litigation.
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Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.
Meet Shawn Chun: Entrepreneur and Candle Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online candle business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a candle business owner at a craft fair, farmers market, retail location or anywhere else I see myself. I know how hard the struggle is to obtain and retain clients, finding good employees all while trying to stay competitive. That’s why I created Candle Business Boss: I want to help candle business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.