Insurance for Selling Handmade Cosmetics & Skincare

You need business liability insurance to sell cosmetics, including general and product liability.

General liability coverage protects your business against claims of third-party injuries or property damage, like if a customer slips and falls at your booth or shop. Product liability is essential for cosmetics makers and sellers because it helps cover claims and legal costs if your product causes harm, such as an allergic reaction.

Both general and product liability insurance are available with ACT Pro.

You can legally sell homemade beauty products by following all FDA cosmetic regulations and maintaining safe manufacturing practices. This includes using proper ingredient labeling, keeping your workspace and tools sanitary, and following best practices to prevent contamination. You must also avoid making medical or therapeutic claims about your product.

Staying compliant also means tracking your batches and ingredients in case of future safety concerns. For full guidelines, review the FDA’s cosmetic regulations.

While you do not need a special license to sell handmade cosmetics, most cosmetic sellers still need to meet basic business and regulatory requirements, including:

• Having a general business license from your city and/or state
• Obtaining a sales tax permit, also called a vendor’s license
• Following FDA rules for safety, ingredients, and labeling

Requirements vary by state and city, so check your state’s Secretary of State website and your local government to confirm the exact permits and registrations you need.

Most handmade cosmetics businesses benefit from annual coverage, since it protects both your business and the products you make throughout the year. ACT Pro offers the broadest protection for beauty makers, so it’s better if you sell year-round, run an online shop, or need coverage for product-related claims.

Event coverage is helpful when you only need short-term protection, such as selling at a single craft show or market. ACT Go gives you fast proof of insurance for one-day or weekend events.

Both policies include an instant Certificate of Insurance (COI) and free, unlimited additional insureds, which many venues and retailers require. Compare policies to learn more.

The following products are excluded (not covered) under the ACT handmade beauty policy. Additional exclusions may apply, so be sure to review your policy documents for the full details on what is and isn’t covered.

• Hair relaxing, curling, or straightening products, which means any chemical product marketed for sale or use for the purpose of relaxing, curling, or straightening hair
• Any product that contains cyclosiloxanes, parabens, diethanolamine, dimethyl sulfoxide, guani-dine carbonate, ammonium thioglycolate, tolulene, dibutyl phthalates, phthalates, pthalate esters
• Dietary supplements – meaning products taken by mouth that contain a “dietary ingredient” intended to supplement the diet. Including, but not limited to, vitamins, herbs, minerals, extracts, concentrates, botanicals, etc.
• “Ethical pharmaceuticals”, meaning any drug, vaccine or medicine, which cannot be distributed to the general public by any means other than through the prescription of or usage by a licensed physician or medical doctor duly accredited by a recognized medical professional association, such as the
• American Medical Association
• Furniture
• Formaldehyde, formaldehyde products, or formaldehyde-containing materials or products.
• Hand sanitizer not in compliance with the United States Food and Drug Administration requirements for over-the-counter topical antiseptic or antimicrobial products effective on or after the date of manufacture
• Invasive body inks, dyes, or permanent cosmetics
• Inversion tables
• Nail curing lights
• Plug-in electrical products
• Products containing alcohol, except for hand sanitizer described above
• Products developed with or containing human stem cells or human stem cell media
• Products or equipment implanted on or within the human body
• Products, supplements, or additives that, at any time, are recalled, including, but not limited to a recall classified by the United States Food and Drug Administration to be a “Class I Health Hazard”, meaning a situation in which there is a reasonable probability that the use of, or exposure to, a violative product will cause serious adverse health consequences or death, as defined in the Code of Federal Regulations, Title 21, Chapter 1, as amended
• Products containing cannabidiol (CBD) or tetrahydrocannabinol (THC)
• Suppositories
• Tanning beds or equipment
• Toys (except when sold in conjunction with an eligible beauty product)

If you need liability insurance for any of the excluded products above, visit Insurance Canopy to get a quote that’s tailored to your business. Insurance Canopy is a sister company of ACT.