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Adult sexual products have become increasingly popular in recent years, with the market for such products reaching an estimated $40 billion in revenue during 2020 alone. That’s a very BIG industry by any measure. Despite their popularity, retailers of adult sexual products face unique challenges when it comes to obtaining business insurance coverage. This article will explore the importance of insurance coverage for adult sexual product sales and the challenges associated with obtaining coverage.
Why is insurance coverage important for adult sexual product sales?
Insurance coverage is essential for any business that wants to protect itself against potential risks and liabilities. This is especially true for businesses that sell adult sexual related products, which are subject to a range of legal and regulatory requirements. Without insurance coverage, retailers of adult sexual products could be exposed to a range of risks, including:
- Product liability claims: If a customer is injured while using a sexual product, the retailer could be held liable for damages. Product liability insurance can help protect retailers against these types of claims.
- Premises liability claims: If a customer is injured on the retailer’s premises, the retailer could be held liable for damages. General liability insurance can help protect retailers against these types of claims.
- Cybersecurity breaches: If a retailer’s website is hacked and customer data is stolen, the retailer could be held liable for damages. Cyber liability insurance can help protect retailers against these types of claims.
- Business interruption: If a retailer’s business is interrupted due to a natural disaster or other unexpected event, business interruption insurance can help cover lost income and expenses.
In addition to protecting against these risks, insurance coverage can also help retailers and makers of adult sexual products comply with legal and regulatory requirements. For example, many states require retailers, including those in the business of selling adult sexual products to obtain certain types of business insurance coverage before they can legally operate.
As an operator, you will face many challenges associated with your business, including obtaining insurance coverage.
Despite the importance of insurance coverage for adult sexual product sales, retailers in this industry face a range of challenges when it comes to obtaining coverage. Some of the most common challenges include:
- Stigma: There is still a significant amount of stigma surrounding adult sexual products, which can make it difficult for retailers to obtain insurance coverage. Many insurance companies view adult sexual products as high-risk products and may be reluctant to provide coverage. You’re not likely to find the same insurance companies advertising on TV willing to offer a policy. Having an experienced agent familiar with your type of business is key to obtaining the right coverage at the right price.
- Lack of underwriting guidelines: Insurance companies may not have underwriting guidelines in place for adult product sales, which can make it difficult for retailers to obtain coverage. Without underwriting guidelines, insurance companies may not know how to assess the risks associated with selling adult sexual products.
- Lack of data: Insurance companies rely on data to assess risk and set premiums. However, there is much less and limited data available on the business and product risks associated with selling adult items. This lack of data can make it difficult for insurance companies to assess the risks associated with providing coverage.
- Regulatory requirements: Many states have specific regulatory requirements for retailers of adult products, including insurance coverage requirements. Retailers that fail to meet these requirements may face legal and financial consequences.
Tips for obtaining insurance coverage for adult sexual product sales
Despite these challenges, there are steps retailers can take to increase their chances of obtaining insurance coverage for adult sexual product sales. Some tips include:
- Work with an experienced insurance broker such as us: An experienced insurance broker can help retailers navigate the insurance market and find coverage that meets their specific needs. A broker that specializes in the adult product industry and with a good working knowledge of First Amendment (and lack of for many items) will have a better understanding of the unique risks associated with this industry and can help retailers find coverage that is tailored to their business.
- Provide as much information as possible: When applying for insurance coverage, retailers should provide as much information as possible about their business and the products they sell. This can include information about the safety features of the products, the customer demographic, and any risk management protocols in place.
You don’t have to beg an agent or an insurance company to write a policy for you, you just have to find the right agent who knows which business insurance companies want your business and will compete to gain it. You’re in a highly profitable business, albeit there is not reason for you to give up more of your profits than needed. Plus, by working with an agent who values you as a business owner, you’ll have the respect you deserve.
Lastly, keep in mind that if you’re considering selling online, the rules change from location to location, so work with people who can help guide you through.