Ockapella Print and Design sell homewares and fashion items made from Australian fabric at the Saturday Kiama Produce Market at Black Beach.

"We have attended this for about three years, and it has been well-run and pleasant to deal with," co-owner Gilian Clapham said of the Kiama market.

"We have built up a small but good customer base there - with tourists boosting this."

However, Ms Clapham and co-owner Michael Doherty claim the running of the market had changed recently.

"Kiama Council demanded all stalls have not only public liability, but product liability as well," Ms Clapham said.

"This is a normal demand for stalls that sell food or cosmetics, but not our products."

"What is the danger in our products?" Mr Doherty said. "We're all fabric."

Ms Clapham said no market had ever asked them for product liability.

Council general manager Michael Forsyth said it was now a requirement that stallholders have public and product liability insurance, as many stalls included food chemical compositions.

He also cited an example where more than 120,000 items of clothing and bedding were recalled from major retailers, after they were found to be tainted with a carcinogen.

"It can be the ones you'd least expect," he said.

"We encourage people to renew insurance to include product liability, which will only be an incremental increase. . We've also directed people to various insurance products which seem to be at low cost."

However, Ms Clapham and Mr Doherty said it would be too expensive to walk away from their existing insurance policy.

"[It would be] a minimum for us of $850-$1000 in order to cover product as well. We can't afford to just throw away $1000 to attend one market once a month.

"It's so retrograde . . . they should be encouraging people like us."