For inventors, insurance is generally the last thing that is thought about. As with any new business, it needs to be considered, and seriously shopped for to ensure quality and a decent price. Many manufacturers will not move forward with an invention if they lack liability insurance.

A former executive director of the now-defunct inventors congress, tells of an invention that wined a long-standing, reputable company. The company decided to diversify by adding an independent inventor”s creation to its line of products. The invention injured someone who sued, bankrupting the firm.

"That was the end of the 100-year-old company". The moral of the story — No matter how ingenious the invention, if it spawns a liability claim as a result of an injury, everyone associated with that invention (the inventor, manufacturer and licensee) may end up in bankruptcy court.

Liability insurance and the underwriters who offer it provide a “life preserver” in the event of such problems. Unfortunately, finding suitable liability insurance isn”t all that easy, according to Alan Tratner, founder of Inventors Workshop International, an inventors’ networking organization. In fact, he says, the inability to obtain liability insurance keeps many inventors from getting their products to marketplace.

Tratner contends liability insurance brokers are often unwilling to deal with independent inventors, not so much because of the risks associated with new inventions, but because of the time-consuming nature of giving price quotes to inventors who never bring their products to market. Thus inventors are often hard-pressed to find a broker who will take the time to research insurance for them — No matter how serious the inventor is about getting his or her product on the market.

One insurance broker in Canoga Park, California, disagrees with Tratner. He guys that provided an inventor has the money to pay premiums “Insurance is available for just about any product” But therein lies central deterrent: COST.

“With all the costs involved in staffing a business, insurance is something inventors mentally set aside until their product is successful,” the agent adds. Inventors don”t want to shell out large amounts of cash to Insure a product that may not even make it in the marketplace.

Nevertheless, product liability insurance may be something you can”t do without. Often, manufacturers refuse to deal with inventors until the proper liability insurance has been secured.

Making a Deal

While liability insurance may exist for every product, the trick is to find a company willing to insure your particular product at a price you can afford. More than 15 years ago, Steve and Barney Jankowski of Pittsburgh invented “Close light, a device that uses a system of strong, woven panels, secured by Velcro fasteners, to enclose outdoor scaffolding on construction sites construction companies normally enclose scaffolding with plastic, but this often rips close tight panels on the other hand, are durable and reusable.

Unlike many new inventors, the Jankowskis sought liability right from the start, but didn’t have much luck at first. Price proved the major hurdle. They received quotes as high as $25,000 for liability insurance, but finally they found a company that provided liability insurance for just under $2,400/year.

For that price, both the product and the company were protected from lawsuits stemming from Injuries associated with their product, or even from accidental damage to clients” property. Almost all inventors insure their product and their company for liability because if a customer is determined to file a lawsuit against your product, he or she is just as likely for liability because if a customer is determined to file a lawsuit against your product, he or she is just as likely to come after your company.

Finding an Agent

When you are looking for an insurance broker, don’t let your fingers do the walking in the telephone directory. Instead, ask around for referrals, or ask other Instead, ask around for referrals, or ask other small-business owners who handles their business insurance.