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Re: Liability insurance questions

I sold my business in 2004 it moved the liability to new owner.

The best way do not make a mistake then it is never used the insurance.

For some reason if you say your just a welding shop the insurance companies raise the prices.

There are a lot weld shops that call self a machine shop. Lower liability insurance cost.

I have said in pass threads if had to life over again I would call myself a portable machine shop.
{Smith portable machine & welding}
But the the DBA would say {Smith portable machine}

You also get lot more work doing even a little machine work in field and it is very low overhead too.

Dave

Originally Posted by delders

Does liability insurance cover welding related business? & do you now any reliable provider to go with?

Re: Liability insurance questions

Originally Posted by smithdoor

This very common question.
Most how own a lot need Liability insurance. It also depends on type of work too.

Welding Liability insurance is very costly too.
Some can not afford the cost and they may go bankruptcy (chapter 11 or 13).
Others make enough money to buy the Liability insurance.

Are you lucky

Dave

Does liability insurance cover welding related business? & do you now any reliable provider to go with?

Re: Liability insurance questions

Liability insurance can get very costly.
I did work that was around items that cost $50,000,000.00 and even one item that cost $2,000,000,000.00

You see that would be very costly insurance.

Dave

Originally Posted by RCcrawler

I am trying to start my own welding business. I do some small projects after i get home from my full-time job ( pipe welder in a shop). However, it seems like these little projects/jobs keep getting bigger and more involved. Right now, I do not have liability insurance. I am really picky about the jobs I take on. I don't do anything I think might cause damage if something were to fail/break. But, I know that is not the way to go with this.

When should I get liability insurance? What is a good amount for a one man band to have?

Also, out of curiosity, how much coverage do you have? and if you don't mind saying, what does it cost you?

Re: Liability insurance questions

This very common question.
Most how own a lot need Liability insurance. It also depends on type of work too.

Welding Liability insurance is very costly too.
Some can not afford the cost and they may go bankruptcy (chapter 11 or 13).
Others make enough money to buy the Liability insurance.

Are you lucky

Dave

Originally Posted by RCcrawler

I am trying to start my own welding business. I do some small projects after i get home from my full-time job ( pipe welder in a shop). However, it seems like these little projects/jobs keep getting bigger and more involved. Right now, I do not have liability insurance. I am really picky about the jobs I take on. I don't do anything I think might cause damage if something were to fail/break. But, I know that is not the way to go with this.

When should I get liability insurance? What is a good amount for a one man band to have?

Also, out of curiosity, how much coverage do you have? and if you don't mind saying, what does it cost you?

Re: Liability insurance questions

Good news is that with business vehicle insurance, it's way cheaper than say insuring a Buick, whenever work trucks have permanent equipment installed, they statistically get in much fewer accidents so find an insurance agent that will classify your truck as commercial.


I have 1mil coverage, and a commercial umbrella policy as well.







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Re: Liability insurance questions

Originally Posted by RCcrawler

I am trying to start my own welding business. I do some small projects after i get home from my full-time job ( pipe welder in a shop). However, it seems like these little projects/jobs keep getting bigger and more involved. Right now, I do not have liability insurance. I am really picky about the jobs I take on. I don't do anything I think might cause damage if something were to fail/break. But, I know that is not the way to go with this.

When should I get liability insurance? What is a good amount for a one man band to have?

Also, out of curiosity, how much coverage do you have? and if you don't mind saying, what does it cost you?

I am in similar situation and want to know which provider you have opted for? and how much you're currently paying? Let me know so i have a clear idea of current cost and best provider right now

Re: Liability insurance questions

Oh, and here's the other two I forgot. Waaaay different viewpoint on insurance and being served!

https://www.practicalmachinist.com/v...not-do-316550/

https://www.practicalmachinist.com/v...served-316565/

Not saying it's wrong, but not what I'm doing. YMMV

Re: Liability insurance questions

Here are a couple of links to some guys that have different ideas on this thought:

https://www.shopfloortalk.com/forums...ad.php?t=13353

https://www.shopfloortalk.com/forums...ad.php?t=15215

I looked hard at this question myself years ago when I was starting my business. It was safer and more "conventional" for me to set up an "S" corp and buy the business insurance.

The four most important people for me when I was starting up:

CPA
Banker
Lawyer
Insurance Agent

Don't forget that even your vehicle has to be insured separately if you do business with it. Regular "consumer' policies do not cover business related claims and some customers require a separate POI (proof of insurance) for the vehicle BEFORE they even let you drive on their property.

Good Luck with your new business - It's the most fun and hardest thing you will probably do, but it is worth it!

Re: Liability insurance questions

Must be the same as doing food processing. I think it is all about the sound cha ching makes on the insurance carrier end.

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Re: Liability insurance questions

Wait till you try to get oilfield related insurance and or insurance to work on railroad property

Re: Liability insurance questions

There maybe some types work you do that will require to have liability insurance
Like zapster said $750 is cheap today.
1) Never make mistake.
2) If own nothing and just starting some will not buy insurance and just file chapter 11 or 13.
3) The other way is have costumer sign a documentary that you working as employee.

But only $62.50 a month is very cheap I find zapster insurance agent that is best way to go.

Dave

Originally Posted by RCcrawler

I am trying to start my own welding business. I do some small projects after i get home from my full-time job ( pipe welder in a shop). However, it seems like these little projects/jobs keep getting bigger and more involved. Right now, I do not have liability insurance. I am really picky about the jobs I take on. I don't do anything I think might cause damage if something were to fail/break. But, I know that is not the way to go with this.

When should I get liability insurance? What is a good amount for a one man band to have?

Also, out of curiosity, how much coverage do you have? and if you don't mind saying, what does it cost you?

Re: Liability insurance questions

My landlord would not let me set up shop without a 1 million dollar liability policy.
750$ a year so it's kinda a no brainer.

...zap!

Re: Liability insurance questions

Originally Posted by RCcrawler

Thank you for the replies guys. It seems like I have some work to do. This is a little more involved than I had thought. But, I definitely want to do it the right way. Time to start making some phone calls.

How are you doing? Have you been able to understand the issues related to starting a business?

Re: Liability insurance questions

Originally Posted by Broccoli1

Welcome to the small business owner world.

You need to sit down with an accountant and figure out how to set up your business, as mentioned in the other posts.

*Personal protection and tax benefits; LLC, Sole proprietor , S Corp. which one is best for you?

* Does your neighborhood allow in home businesses like yours?

* Need a business license?


Contact an Insurance agent- don't contact your Home owner's just yet
*operating a business from home. What Insurance should you carry? How does this effect your Home Owner's Policy? Detached shop?

Excellent advice. I once relied on myself when opening a business, read a lot of information on the Internet and started. In the end, as it turned out, I did not take into account some details and it led to problems with the tax service. As a result, I still had to go to the professionals and they helped me solve the problem.
So it is better to find out all the questions at once.

Re: Liability insurance questions

I carry a 2 million liability policy. I cannot do structural pieces, or security doors or it is voided. It costs me about a hundred a month. I have a buddy with a structural shop when that is needed. I primarily build big doors, occasionally do handrails, stair rails, Gates, etc. I got my insurance as soon as I got my contractors license, and it was about 2 years later that I left my corporate job to do this full time.

Re: Liability insurance questions

I'm a sole proprietor myself. I do have provincial and federal business licenses.
Insurance has always been challenging with what we do. Most companies want nothing to do with welders and metal fabricators.

Re: Liability insurance questions

Thank you for the replies guys. It seems like I have some work to do. This is a little more involved than I had thought. But, I definitely want to do it the right way. Time to start making some phone calls.

Re: Liability insurance questions

Originally Posted by Broccoli1

Welcome to the small business owner world.

You need to sit down with an accountant and figure out how to set up your business, as mentioned in the other posts.

*Personal protection and tax benefits; LLC, Sole proprietor , S Corp. which one is best for you?

* Does your neighborhood allow in home businesses like yours?

* Need a business license?


Contact an Insurance agent- don't contact your Home owner's just yet
*operating a business from home. What Insurance should you carry? How does this effect your Home Owner's Policy? Detached shop?

Read this thread

https://weldingweb.com/vbb/showthrea...rance-question

I can't second this suggestion enough! If you don't already have a CPA I would suggest retaining one before anything else. Seriously! The advice quoted in my response given by Broccoli1 is the best advice you may ever get.

Re: Liability insurance questions

Welcome to the small business owner world.

You need to sit down with an accountant and figure out how to set up your business, as mentioned in the other posts.

*Personal protection and tax benefits; LLC, Sole proprietor , S Corp. which one is best for you?

* Does your neighborhood allow in home businesses like yours?

* Need a business license?


Contact an Insurance agent- don't contact your Home owner's just yet
*operating a business from home. What Insurance should you carry? How does this effect your Home Owner's Policy? Detached shop?

Read this thread

https://weldingweb.com/vbb/showthrea...rance-question

Re: Liability insurance questions

Insurance prices vary by quite a bit. If I remember correctly, when I started I got a $1M/occurrence, $2M total per year and I want to say I paid around $8-$900 per year for it. But it's also based on the type of welding you do, your location, and the amount of sales you do, as well as different companies. It's usually best to start with an insurance broker.

Re: Liability insurance questions

As far as hard numbers, you'll reach the time when your customers are the ones who choose your insurance limits. For example, I carry a $3 million aggregate because that's what's required by one of my customers. Others require $2m or $1m. It costs me a couple thousand a year. It also excludes me from certain types of work, such as pressure pipe, for example. When I run across something I need covered that's excluded, I call my agent and get the coverage modified. Sometimes it only costs a few bucks more.

You'll eventually have customers wanting to be added to your insurance policy as additional named insureds. When you first get that request, don't freak out -- it's a normal thing. Each customer's insurance requirements will differ slightly. Others might want to be notified within an X amount of time after the work is done if your insurance is cancelled. For whatever reason, that's an expensive option to add...I think it was like $500 or so. I actually didn't take a job one time because of that rider -- the whole job was like $600 and it was a one-time thing for an out-of-state company.

Re: Liability insurance questions

There is no such thing as a side business when it comes to welding. If you get paid by check, you are an official business according to who gets sued. If you get cash, it never happened. It's called a paper trail, and lawyers follow it all the way to the end.

In order to get insurance, you have to be a business. Companies dont insure side work for side money, with full liability.

It is better to set up a LLC to separate business assets from personal assets.

Now that said, in 14 years I have never had a claim as I reject jobs that I dont feel comfortable with, or are too shaky.

As always, talk to a attorney. You get paid to weld, they get paid to do their jobs properly as well.


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Re: Liability insurance questions

Originally Posted by RCcrawler

I am trying to start my own welding business. I do some small projects after i get home from my full-time job ( pipe welder in a shop). However, it seems like these little projects/jobs keep getting bigger and more involved. Right now, I do not have liability insurance. I am really picky about the jobs I take on. I don't do anything I think might cause damage if something were to fail/break. But, I know that is not the way to go with this.

When should I get liability insurance? What is a good amount for a one man band to have?

Also, out of curiosity, how much coverage do you have? and if you don't mind saying, what does it cost you?

the amount of liability insurance should be more than all your assets put together...see if working without insurance isnt criminal in your area, some of the areas I work( not welding but a trade) its criminal to work without liability insurance, as other have said , become a sub s corp. you get the best of both worlds, insulation of private assets and tax advantages on your personal income from your regular job...
it doesnt matter how small a job you do the liability is still there..you weld something and it breaks off and hits someone causing an injury, you have a major liability right there, and if they goto the hospital, the hospital will come after you for medical bills...cost of insurance varies on what description you give your broker on the work you do...
also get an umbrella policy for you home owners insurance, that will help out in personal coverage..

Re: Liability insurance questions

More importantly set up a LLC for your business. It will shield your personal assets and also allow you to properly track income and expenses.

Re: Liability insurance questions

I suppose you cant have enough insurance, due to "lawyers". Just don't forget that you are dealing with "people". Always make sure that the insurance CANNOT find a way to weasel out of paying the claim.