|
Home-Based Personal Care Business Task Force
UpdatesFor
additional information on HBN's Products Liability Insurance Program, and to
get a quote for your business, click here
for the names and contact information for HBN's referral sources. Februrary
21, 2006: RLI's Assistant Vice President responds to HBN's February 13
Letter. Click here to
view the letter in PDF format.
February
13, 2006: Final Letter to RLI With Signatures Was Faxed Today. Click here to
view the letter in PDF format. (Signatories with names and addresses are
excluded from this copy for privacy reasons.)
January
9, 2006: Draft Letter To RLI With Instructions On Becoming A Signatory
December 20, 2005: Task Force Launch
December 19, 2005: Notice of RLI Corp.'s Decision
Not To Renew Personal Care Products Liability Insurance Coverage For
Home-Based Businesses Grossing Over $5,000 Per Year
January 9, 2006: The below letter is a
draft of one that is going to be sent to the president of RLI Corp. Below
the letter you will find instructions on signing on as a signatory to the
letter, which will also be submitted to the insurance commissioners of all
50 states. This letter is a final draft and some minor changes will be made.
Since time is of the essence, a second draft will not be circulated.
Task Force Co-Leaders Marie Gale (Handcrafted Soap Maker's Guild), Anya
McCoy (Natural Perfumery Group) and Michele Miller (National Association for
Holistic Aromatherapy, tentative) are signatories.
Mr. John Michael
President & CEO
RLI Corp.
9025 North Lindbergh Drive
Peoria, IL 61615-1499
Dear Mr. Michael:
On behalf of
the combined membership of the
Handmade Beauty Network, the Handcrafted Soap Maker's Guild, the National
Association for Holistic Aromatherapy and the Natural Perfumery Group,
we urge you to reconsider RLI Corp.'s recent decision to terminate
products liability insurance coverage for home-based manufacturers of
personal care products that gross in excess of $5,000 per year. We believe
that this is an issue of paramount importance to the ability of small
businesses across the country to continue to contribute to a robust
American economy, as well as individual communities and states across the
nation.
RLI's
decision, which was announced with no warning to its customers, has single
handedly destroyed the ability of thousands of businesses across the
country to continue and grow. While we appreciate your past efforts to
serve home-based manufacturers, we are disturbed that RLI is implementing
this new policy notwithstanding the fact that not a single policy has been
invoked to cover a single loss in this industry. These manufacturers had
come to rely on your coverage in order to grow their businesses to the
point where traditional insurance was affordable. Because many retail
establishments will not do business with a manufacturer unless they can
produce a Certificate of Insurance, your decision has left thousands of
men and women across the nation without the ability to earn a living.
It is my
understanding that no RLI policy has ever been invoked or resulted in
a coverage loss to RLI. The company's decision seems even less
reasonable and more mean-spirited in light of that face. Please consider
this letter a request to implement a policy change that is more reasonable
under the circumstances. Alternatives include:
* increasing
the premiums for business that gross in excess of $5,000 per year, rather
than cutting them off altogether;
* increasing
the gross revenue base to $50,000
so that more businesses can be covered; and
* decreasing
the amount of coverage provided per policy.
Because we
are concerned that RLI's decision will be of interest to insurance
regulators around the nation, a copy of this letter and several others are
being sent to them so that they can have first hand knowledge of how this
decision is adversely affecting the citizens and economies of their
states.
In an age
where Social Security is in danger, health insurance costs are sky
rocketing, pension plans are grossly under-funded
and job security is going the way of the dinosaurs, it is even more
important for companies with the power to partner with small businesses to
create an atmosphere where business of all sizes have an opportunity to
succeed. RLI's decision to cease providing products liability
coverage for companies that gross in excess of $5,000.00 per year slays
the aspirations of entrepreneurs across the country. We are further
concerned about the message your decision sends -- that supporting small
business is not important to RLI and the insurance industry as a whole at
time when it is increasingly important for individuals and families to
become more self-reliant.
These and
other economic factors have made it crucial that people assess their
talents and gifts in an effort to create a business that allows them to
provide for the needs of their families while also planning for the
future.
Mr. Michael,
RLI's decision is right now, as you read this letter, is causing hundreds
if not thousands of businesses to cease operations. This affects
individual families, communities and the nation as a whole. We believe
that RLI has a tremendous opportunity to continue to be an industry leader
by making changes that protect its assets without killing the dreams and
aspirations of the small businesses that form the backbone of this
nation's economy.
I am
available by phone at (301) 464-4515 and at the addresses above to
continue a dialog about this important issue.
Thank you for
your time and attention.
SIGNATORIES
INSTRUCTIONS: You
do not have to member a member of HBN or any other organization to sign on.
You must only be a person who agrees with the contents of the letter and has
an interest in helping to further the ability of affected small business
owners to thrive and grow. To sign on as a signatory to the letter, email
your contact information and a statement requesting to be added as a
signatory. Follow the exact format below to be included. You MUST put RLI
LETTER SIGNATORY REQUEST in the subject line or your request will NOT be
considered. The deadline to be included in close of business Tuesday,
January 10, 2006.
I, {insert name} have read the letter to RLI and request to be
added as a signatory.
ABC Company
123 State Street
Anywhere, State xxxxx
Due to the number of requests we will receive, we will not be able
to respond to any individual questions. If you have any doubt about being
included, please do not ask to be included. You may also contact RLI
yourself, as well as your broker (if any) to express your concerns. Thank
you!
December 20, 2005: HBN's Founder & President, Donna Maria Coles Johnson, Esq., announced the formation of the Home-Based Personal Care Business Task Force.
December 19, 2005: HBN's Founder & President sent the below email letter to HBN's 450 members on December 19 and 20, 2005.
Dear HBN Members:
Over the weekend, I received news from Sue Hegge of Wells Fargo Rural Insurance Services that RLI, the company that provides products liability insurance for home-based businesses, is making filings with state insurance regulators that significantly change the way it offers products liability insurance to in-home businesses. Specifically, beginning with February 1, 2006 renewals, and beginning with January 1, 2006 new business, RLI will offer coverage only if an in-home business' gross sales total less than $5,000 per year. My understanding is that RLI is reevaluating all of its insurance business, but I am told by Sue that there seems to be a special emphasis on the personal care products industry. While RLI's goal has always been to cover very small businesses, it seems that they are now narrowing the scope of that minimal coverage.
I have received no explanation of the basis for this drastic change though I suspect strongly it has to do with the fact that there has been very significant growth in the number of small businesses manufacturing personal care products on a small scale in the home. Perhaps the increase has been so significant that RLI's exposure far exceeded the amount of premiums it was receiving from its insured customers. Whatever the case, despite the fact that I am unaware of any in-home personal care products company EVER having to invoke its RLI policy to cover damages of any kind (do you?), it is quite clear that RLI's coverage of "incidental" or "hobby type" businesses is being drastically curtailed nationwide.
This leaves dozens if not hundreds of HBN members exposed. For some, it means keeping sales at less than $5K per year or paying several thousand dollars more than gross sales to pay insurance premiums. For others, it means operating without insurance. For some, it may even mean closing doors altogether. In any case, in-home businesses are hard hit by this change and it seems quite unfair, particularly at a time when it is more important than ever for people to own a business of some kind in order to enjoy the tax benefits and other benefits associated with entrepreneurship.
Having just been notified of this change over the weekend, I am still wading through the full implications. I want each of you to know that I consider this to be a top priority for 2006. I am not an insurance expert and while most of you know I am an attorney, I have very little experience where products liability is concerned. Nevertheless, I suspect that the stars are lining up for me to tackle this issue on behalf of members implicated by it -- not as an attorney for any particular member, but as a small business policy advocate. I am determined to learn as much as I can in the coming weeks and months and work with all impacted members to find alternatives and perhaps even convince RLI, state insurance regulators or even Congress that the ability of an insurance company to eliminate a huge and growing sector of the economy in one fell swoop is devastating not only for the businesses impacted, but also for their families, their communities and society in general.
I don't know what I can do, but I am a firm believer that a small group of people can make a positive difference. To start with, I am collecting a list of impacted members from the insurance representative we use. I should have it later this week. If you would like to volunteer with me to participate on a task force to address this issue, please email me and put INSURANCE in the subject line. Please answer these questions in your response:
1. business name
2. state you are in
3. annual gross sales (projected for 2005)
4. insurer (RLI or someone else, or state if you are not insured)
5. how this change will affect you
I will collect the information received and touch base with you shortly after the New Year.
Thanks,
dM
|
