13 replies to this topic

[Drewed]

I saw the other post on insurance and didn't want to junk it up with my slightly off topic posts, so I made my own thread. My questions is about insurance, but not as it relates to a business, but as to a hobby.

I have been asked to demo for various groups (all at their locations,) but some of them require me to carry insurance. I'm thinking that if I become an LLC, then the most I could get sued for would be anything I have under the LLC name. At this time, that would amount to nothing.

My forge is in my shed, and that is covered under home owners, so I really only need something for the demos. Do they offer such a thing?


Small rant after doing some google research: I love how somebody could knock down my "keep away hot work" fence at demos, drunkly stumble in my forge, knock my anvil over, pick up MY hammer, hurt themselves with it, and then sue me! That is just messed up!

[Fe-Wood]

as far as the advice I've been given from my accountant and others, an LLC or a Corp. will only slow down a law suit. If the company has no $$ they just go up the food chain until they find the $$. Insurance is your best bet.

[DennisG]

aaah, the sue happy US. Why work when you can sue someone to pay for your life.

Good luck with your search for an insurer, and hope it is never needed.

[son_of_bluegrass]

SNIP

My forge is in my shed, and that is covered under home owners, so I really only need something for the demos. Do they offer such a thing?

SNIP

I'm afraid I can't offer advice on finding insurance. But if you smith for a living (or maybe even just some profit) you may or may not be covered by home owners. Some insurance companies have different policies for "home" and "home based business". At least that is something I've heard, I'm not a doctor and don't play one on T.V.

Good luck.

ron

[Drewed]

Right now, smithing is just a hobby. I have not sold a signal piece of work. Nor do I expect to anytime soon. Long term plan is to be able to earn enough to buy more coal and metal.

[son_of_bluegrass]

If it's just a hobby, check to see if your home owners covers you. I've also heard that as a hobbyist some home owners insurance will cover you if you are engaged in your hobby away from home. Again I'm not a doctor nor do I play one on T.V.

[civilwarblacksmith]

I recently had the same quandry with needing insurance. Abana used to have an insurance program through Hartford. It was not easy to get. They now have a better plan, that will cover your shop as well as liability for you to do demos. Do not become an llc or corp.. A sole proprietorship is the best way to go. I have a mil. in liability and it runs about $116 every quarter.

[Dan Manders]

Do not become an llc or corp.. A sole proprietorship is the best way to go.

This is only true if you have minimal assets aside from your shop. If someone sues you and your insurance doesn't cover it, as a SP your tools aren't the only thing that can disappear. A single member LLC only offers slightly more protection, as it is still very obvious from a courts perspective that you and the business are the same thing. Your personal assets are generally well protected behind a multi-member LLC, which can be as simple as getting a trusted friend or family member to agree to sign on for a small percentage of ownership.

[stuarthesmith]

my company is an LLC, and my "ol lady" is the multi-member!

[Ric Furrer]

Just to muddy the waters here...I have a sole proprietor LLC.
Insurance via "Society" in Fon du Lac,WI and have an extra rider for shows which covers my product to,from and at.
they also cover me when I teach in the shop provided I limit myself in some ways.

Insurance is NOT like photographs where it is better to ask forgiveness thanpermission. It is best to lay out all of what you wish to do and then do that. If you hide things they can drop you...after the occurrence of the claim. Do not give them any reason to.
Tell them what you wish to do and ask how that effects the policy..it is a service industry to some extent and they want you to give them money.

You should shop around, but it will be in a small range of costs....and it is cheap compared to a claim against you.

Demos are an odd thing...there is a reason THEY want YOU to have insurance.

Ric

[MattBower]

Here's an article on piercing the corporate veil. Good reading for any small business owner. http://www.nolo.com/...veil-33006.html

[JoshuaH]

Thank you for posting that MattBower. That was very informative and helped clarify somethings for me.

[Gromgor]

As a former insurance agent, and keep in mind this varies from state to state, I can tell you that your homeowners might cover "losses" but not being sued. Now, most HO policies have a set amount for liability, but this covers things like slip and falls, burnings from the stove, a limb falls out of one of your trees and crushes somebodies car, etc. In the event of a fire, and your insurance company REALLY needs to know you have a forge, what kind of fuel it uses and if it's vented/screened/all the details, if your shop burns down they will replace your shop and tools. This tends to fall under the section in your insurance contract dealing with unattached structures. Usually you get 10% of the value of the home, however that is very often increased at a very low increase in cost.

If you are blacksmithing as a business, you need to pursue commercial liability and property coverage. The property coverage covers...property. Simple as that. It will spell out what kind of losses it will cover you for, what amounts and in what way it will repay. Whether it will pay a depreciated value based on how long a tool is expected to be used, or if it will simply pay to replace the tools.

The Liability Coverage is what will protect you if you are sued. Make sure your insurer knows precisely what kind of things you make. What value, whether they are for large industrial, smaller home construction, ornamental, etc. Keep notes of all the items you make. In fact, a portfolio is not only good for displaying to an insurance agent, but also to customers. If you are going to be holding classes, or will have "trainees/students/paid peons" they need to know about that too.

Full disclosure to your insurance company is 100% ideal. Like a lawyer, they need to know. Because just as soon as you fail to mention that you make sharp, pointy knives and store them hanging from wires from the ceiling, one of them will fall, hurt somebody and they'll say "whoa whoa whoa whoa whoa...Yeah, no." There's a LOT of grey area an insurance company is willing to work in. It may cost a bit more in premiums, but they'll back you. They just need to know about it.

[Jakesshop]

Glad to see this tread started, it was a wake up call for me as I too I'm starting to do more demos away from home. Going to call my accountant, insurance agent and my lawyer next week. I'm already covered when I do a California Blacksmith Association sanctioned events, but I'm now doing Ren Faires and charity events.