Question: Liability
- Thread starter Beathard
- Start date
Andrew Biggs
Moderator
Hi Beathard
With FEGA not that I'm aware of.
Cheers
Andrew
With FEGA not that I'm aware of.
Cheers
Andrew
not sure of that. about 10 years ago i was ready to work an arrangement with the gunsmith at a local gander mountain outlet. he liked my work, and we were ready to have a go at it. that is until i had to come up with 1 million in insurance coverage !
fegarex
~ Elite 1000 Member ~
FEGA looked into it several times for some sort of "group" thing but all state laws differ so it made it impossible.
bigransom
Elite Cafe Member
State Farm has excellent business policies that can cover a range of issues for your business and work, from liability to equipment and assets. As well, don't forget your digital assets and stored intellectual property in the case of loss with unrecoverable backup. Their rates are very reasonable, and you can taylor things to your company structure and needs. Been with them for years - excellent. And, we've shopped our needs several times in the commercial ins. market and no one comes close to them for quality of policy coverage, flexibility, and economy of coverage.
scottd.
scottd.
diandwill
Elite Cafe Member
As a jeweler, we have insurance, of course, but we also have a simple statement on our invoices that treatments to gems, undisclosed situations etc (primarily filled gemstones) are not our problem. We have been offered a coverage, by our insurance company, against damage to customers gems and jewelry while in our possesion. It would cost several hundred a year, and could be worth it, if that kind of damage occured regularily, but then how long could you stay in business with that kind of reputation. In the 25 years I have been a jeweler, it would have been used twice, the first time it cost us $25 to have a replacement piece of Lapis cut, the other $1100 to replace a Montana Sapphire that allegedly was damaged by us. When it left the shop it was fine, somehow later it fractured and was our fault. We searched for, found and purchased the replacement stone, just to keep our name 'clean'. Don't know if it would be worth it to pay for the extra insurance, then have the premiums go up if used.
If you are talking about firearms, the customer should be well aware of the quality they can expect, if you are unsure of your gunsmithing abilities, have them get the piece dismantled and brought to you ready to cut, then re-assembled by a professional. A good gun safe should protect against fire for up to an hour, and anything beyond that, a regular insurance policy should be ample.
Having said all that, I am not an insurance company, and I didn't sleep at a Holiday Inn Express, so this is just my opinion.
If you are talking about firearms, the customer should be well aware of the quality they can expect, if you are unsure of your gunsmithing abilities, have them get the piece dismantled and brought to you ready to cut, then re-assembled by a professional. A good gun safe should protect against fire for up to an hour, and anything beyond that, a regular insurance policy should be ample.
Having said all that, I am not an insurance company, and I didn't sleep at a Holiday Inn Express, so this is just my opinion.
Barry Lee Hands
~ Elite 1000 Member ~
If you use a gunsmith to assemble and finish and deliver the gun, my understanding is you are fairly well insulated from liability, as an engraver, in regards to malfuctioning mechanical issues.
Of course there are a million other issues that can be covered by insurance.
Of course there are a million other issues that can be covered by insurance.
My fear has been the depth of cut causing a pressure malfunction when a firearm is fired. The manufacturer is going to say it would have been fine if it had not been engraved. The engraver would probably want to defend by saying it was a manufacturing issue. I believe the small guy will lose.
bigransom
Elite Cafe Member
A very common business scenario to mitigate liability with insulation from litigation:
1.) Operate under a Texas LLC structure. Simple. Inexpensive.
2.) General business policy with umbrella liability covering all events, including catastrophic failure from work suits. 1-5m in general liability will be very inexpensive, especially given the market and risk exposure.
3.) Do some due diligence with Colt Authorized Master Engravers, like Mike Dubber, about maximum engraving specifications from Colt for the SAA, and other related firearms that you intend to engrave. Matching these specs, which are likely no secret, will insulate you further from being a target of a failure suit. Although, in a damage suit resulting from the failure of a firearm (which is really rare today, from what I've seen), all parties with any involvement in the firearm would be listed in the suit - no question.
If you follow this simple, and basic, business structure, you're insulated personally from any suit or litigation, given the you have not engaged in fraud. Your personal assets and family cannot be sued, or touched, and your business insurance will provide the liability target for the suit litigators. They want money, and general liability is money. They'll take the limits of the policy and chase the pockets of the manufacturer - who has a reputation - and more money.
You don't need an attorney to do this, Beathard, although, having a relationship with a business attorney for general and personal matters is not a bad idea, as I'm guessing you already know being in business in other sectors.
Another thing to consider to protect your LLC (which is a separate entity from you, the individual) is to add the litigation rider to your business policy. Again, very inexpensive, given your market and risk factors for trial - however, if someone does include your LLC, and or you personally as the engraver, that rider will provide coverage for the legal fees to defend your LLC, and to take care of the dismissal legal work to release you personally from the suit (remember, as an LLC you are not personally liable, so you would be dismissed from the suit).
Those legal bills can be expensive, if that scenario played out, so don't under estimate that coverage. In today’s market, an engraver as an LLC, even with high popularity and a booming business could have the LLC bankrupted by a suit that the LLC has to defend - even if you're right, even if you have no liability - defense is expensive.
That little rider covers all those issues for a very small coverage fee.
I know how State Farms policies work and they are great, and flexible, and inexpensive for a small business person. I'm sure there are many other providers who offer similar programs. Most industries are underwritten by the same few companies anyway.
Just FYI... I'd still offer that starbucks and a chat on these issues for a little of your startup engraving tips.
Just holler. Have a good day.
scottd.
1.) Operate under a Texas LLC structure. Simple. Inexpensive.
2.) General business policy with umbrella liability covering all events, including catastrophic failure from work suits. 1-5m in general liability will be very inexpensive, especially given the market and risk exposure.
3.) Do some due diligence with Colt Authorized Master Engravers, like Mike Dubber, about maximum engraving specifications from Colt for the SAA, and other related firearms that you intend to engrave. Matching these specs, which are likely no secret, will insulate you further from being a target of a failure suit. Although, in a damage suit resulting from the failure of a firearm (which is really rare today, from what I've seen), all parties with any involvement in the firearm would be listed in the suit - no question.
If you follow this simple, and basic, business structure, you're insulated personally from any suit or litigation, given the you have not engaged in fraud. Your personal assets and family cannot be sued, or touched, and your business insurance will provide the liability target for the suit litigators. They want money, and general liability is money. They'll take the limits of the policy and chase the pockets of the manufacturer - who has a reputation - and more money.
You don't need an attorney to do this, Beathard, although, having a relationship with a business attorney for general and personal matters is not a bad idea, as I'm guessing you already know being in business in other sectors.
Another thing to consider to protect your LLC (which is a separate entity from you, the individual) is to add the litigation rider to your business policy. Again, very inexpensive, given your market and risk factors for trial - however, if someone does include your LLC, and or you personally as the engraver, that rider will provide coverage for the legal fees to defend your LLC, and to take care of the dismissal legal work to release you personally from the suit (remember, as an LLC you are not personally liable, so you would be dismissed from the suit).
Those legal bills can be expensive, if that scenario played out, so don't under estimate that coverage. In today’s market, an engraver as an LLC, even with high popularity and a booming business could have the LLC bankrupted by a suit that the LLC has to defend - even if you're right, even if you have no liability - defense is expensive.
That little rider covers all those issues for a very small coverage fee.
I know how State Farms policies work and they are great, and flexible, and inexpensive for a small business person. I'm sure there are many other providers who offer similar programs. Most industries are underwritten by the same few companies anyway.
Just FYI... I'd still offer that starbucks and a chat on these issues for a little of your startup engraving tips.
Just holler. Have a good day.scottd.
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