Liability

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Magicniner
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Joined: Thu May 30, 2013 4:40 am

Re: Liability

Post by Magicniner »

SteveHGraham wrote:Talk to a lawyer about incorporation. The whole purpose of incorporation is to avoid liability.
Good advice, though the fashion for pursuing company officers and directors directly where any excuse can be found has reached us from your side of the pond meaning one can still lose one's house in legal fees, if there isn't insurance in place to cover that eventuality.
toddalin
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Re: Liability

Post by toddalin »

I market an alternator bracket that I designed and have made for me. I sell to/through Classic Industries as well as on the Internet. They asked me for my 2 million liability insurance naming them.

http://www.headerbracket.com/index.html

I informed them that the small profit I make on them wouldn't begin to cover the cost of the insurance. Then I didn't heard from them for a while. Then they started placing orders again and asked for my insurance again. I again informed them I don't/won't carry it and they continue to place orders.

On another note, I am a environmental consultant working part-time for myself from my home. I've been in this field since 1978. Again, professional errors and omissions insurance is a regular requirement that I don't to carry. But my clients actually wave the insurance requirements for me. When you're good, you're good!
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ctwo
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Re: Liability

Post by ctwo »

The reason I'm thinking of it this way is because of the likely scenario, where someone wants some machining to modify a part for a race motorcycle. There is a failure somewhere and the rider dies from a crash. The life insurance carrier and others (medical) may come to cover their liability, which they will pay and then pursue me. I think this is the more likely case where individual's/families are filing lawsuits - I think there is usually another force behind many lawsuits like this than individuals deciding to go after people for rather benign reasons. There may be some wiggle room in claiming the failure was from another reason, assembly or abuse, and it may be difficult to prove the actual cause, but that might not even matter once it goes to court and lawyers start talking - anything could happen, even me winning the million...LoL

This kind of case seems much different than making parts to a design specification that is delivered by a customer. I recall the lack of concern when I worked for a small machine shop too, but I think the risk of something actually failing was slim, and then for any to actually cause another significant issue even less.

I also wonder a bit about having industrial machinery in a res neighborhood. Filing paperwork and setting up official shop is not just more costly than it would be worth (since I am not really running a business), but could attract some unwanted attention.
Standards are so important that everyone must have their own...
To measure is to know - Lord Kelvin
Disclaimer: I'm just a guy with a few machines...
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SteveHGraham
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Location: Florida

Re: Liability

Post by SteveHGraham »

Magicniner wrote: Good advice, though the fashion for pursuing company officers and directors directly where any excuse can be found has reached us from your side of the pond meaning one can still lose one's house in legal fees, if there isn't insurance in place to cover that eventuality.
In the USA, you have to meet a high burden of proof when piercing the corporate veil.
Every hard-fried egg began life sunny-side up.
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SteveHGraham
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Re: Liability

Post by SteveHGraham »

toddalin wrote: Then they started placing orders again and asked for my insurance again. I again informed them I don't/won't carry it and they continue to place orders.
Oddly, one effective way to discourage lawsuits is to forgo insurance. No one wants to pay a lawyer $450 an hour to recover all the assets of a person worth $3000.
Every hard-fried egg began life sunny-side up.
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ctwo
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Re: Liability

Post by ctwo »

Well, Steve, I think you repaired someone's lawnmower part, like the spinny part. How do you sleep at night?
Standards are so important that everyone must have their own...
To measure is to know - Lord Kelvin
Disclaimer: I'm just a guy with a few machines...
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SteveHGraham
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Location: Florida

Re: Liability

Post by SteveHGraham »

They'll never take me alive!
Every hard-fried egg began life sunny-side up.
LIALLEGHENY
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Location: Bohemia, NY

Re: Liability

Post by LIALLEGHENY »

They may not take you alive, but your family won't be left with anything either.

State laws will dictate what kind of home based business you can and can't have. As long as you don't have big trucks showing up dropping of material, crates, what have you, you probably won't have any problems. Anyone questions your machines....it's your hobby. Just protect yourself....LLC , or S-corp.

Nyle
Hopefuldave
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Joined: Wed Jun 01, 2011 8:17 pm

Re: Liability

Post by Hopefuldave »

A million in liability insurance isn't so bad, place I used to work had to get 100 million liability cover for my company car - I had to use it airside at Heathrow Airport, at night, I could have run into a 747 full of passengers...

Dave H. (the other one)
Rules are for the obedience of fools, and the guidance of Wise Men - Douglas Bader
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WesHowe
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Location: Huntsville, Texas

Re: Liability

Post by WesHowe »

Just a mention about Homestead Protection. Both in Florida (where Abom is) and here in Texas a property you live on (within certain limits) is considered a Homestead and cannot be seized for debts (including judgements) of any sort, except (of course) taxes or money loaned to buy or improve the property.

That is why OJ was able to keep his mansion in Miami despite the Brown family having a large judgement against him. Yes, it might be possible for them to seize some of the equipment (as they did taking some of OJ's sports memorabilia and trophies), and maybe not, as equipment used for farming or ranching is protected also as part of the homestead.

Those in states with no such protections have a real worry though about this.
RSG
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Re: Liability

Post by RSG »

Interesting topic Ctwo!

I ran into something similar a few years back were I was asking about my machines being covered under my home policy. They said yes......unless I sell my stuff which I do sell a bit. They immediately told me if they find proof of it they would void my entire home insurance policy. I make fishing reels for god sakes, not sure how someone is going to injure themselves on that. Regardless I had to go and purchase a separate policy (CGL) and show them proof. I should note I'm in Canada but I'm sure the laws are similar in the US.
Vision is not seeing things as they are, but as they will be.
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SteveHGraham
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Re: Liability

Post by SteveHGraham »

LIALLEGHENY wrote:They may not take you alive, but your family won't be left with anything either.

State laws will dictate what kind of home based business you can and can't have. As long as you don't have big trucks showing up dropping of material, crates, what have you, you probably won't have any problems. Anyone questions your machines....it's your hobby. Just protect yourself....LLC , or S-corp.

Nyle
I don't think my church buddy will sue me for the free work I did on his lawnmower, but if he does, I'll just run off and move in with John McAfee.

One of the wonderful things about code enforcement is that there is no jurisdiction that punishes violations it doesn't know about.

My dad's rotten deck needed to be removed, and the city wanted us to get permits! Unbelievable. Permits, to REMOVE a dangerous deck which was a lawsuit magnet. It would have taken weeks and cost hundreds of dollars.

I paid some guy (licensed and insured) to come in and do it under the radar. If the city finds out, I'll ask if they want me to put the rotten wood back.
Every hard-fried egg began life sunny-side up.
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