Insurance

[johnm]

Folks -

Okay, We've ordered a shop-bot and are looking to up our insurance for the lease and for liability. Do any of you have any recommendations? We are in Northern California. We can't get one through our homeowner's policy, and they won't write a commercial policy for us since we work out of our home. WTF?

We will be using the bot to make trim, so I can't think that there is much exposure to a huge liability in that - someone else is installing it, and it's not like I am making heart valves or something.

I'd appreciate any input on how to navigate these waters..

John Moorhead
Lakeport, CA

[beacon14]

John,

The insurance was the biggest stumbling block for me when I decided to build a shop at home for my business. The company that had insured my business for years said they wouldn't cover a home based business, and no amount of reasoning or pleading would change that. Their position was that if something happened, it might get tricky to figure out whether the homeowners or business policy would apply. No other commercial insurer would touch it either. Not sure if the situation has eased any, but 2+ years ago it was close to impossible to buy a new policy for a business. Fortunately for me the company that has my homeowners and auto policies also writes commercial policies, and with my 15 year track record they agreed to underwrite my home-based shop. Then after I moved in and they inspected the premises they raised my property rates $2,500 per year since I had moved from a concrete block building to a wood-framed building, one which was attached to my wood-framed house to boot. I told them if I had known that beforehand I would have built the shop out of masonry.
Anyway, not sure what to suggest since you've already tried your homewoner's carrier. Try contacting your state insurance commisioner's office - there may be an assigned risk pool you could get coverage through (if you can afford it). Good luck.

David B.

[jacob_k]

It wouldn't hurt to become an LLC either, that way if the business gets in financial trouble you won't lose personal assets. I wonder if it would be cheaper to insure an LLC vs. a sole proprietorship due to the limited liability, anyone know?

Jacob Klee

[Mike Windsor]

I started my business twelve years ago , and built a shop BESIDE my house with the recomended spatial seperation by the building department between the house and the shop . I have a business policy that covers the shop , and is seperate from the house policy . ----The business policy is twenty times as much as the house policy . ---My agent did point out though that it was a good thing that the shop wasn't attatched to the house . I incorporated eight years ago to reduce my liability exposure, and it didn't affect my rates . ---As far as financial troubles go on borrowed money , most banks will ask for a personal guarantee for a loan to a small corporation .

[amy_brown]

I found insurance with RLI (www.rlicorp.com (http://www.rlicorp.com)) for my equipment at my home shop/garage. Insurance in Florida is tough, especially with all these darn hurricanes. My garage is attached to my house. I had it with Auto Owners and after a site inspection they dumped me. For liability insurance I use The Hartford. Hope that helps.

[cnecreative]

I finally got insurance just today after being turned down by 8 other carriers & brokerage firms. I finally ended up with a Lloyds of London carrier. I work in wood, plastic, metal and stone, as well as doing software and electrical engineering. In order to even get them to possibly look at me, I had to split my company and remove the engineering work from the business production shop I was trying to insure. I also was required to move it out of the house. I was finally able to get a general liability and contents coverage policy excluding fire coverage. Most of the big players are gun shy of insuring anything to do with wood and saw dust. If you do any welding it is an thanks but no thanks for all but Lloyds apparently. I kept the main company doing control systems at the house and moved the hobby business into a leased location and was at least able to insure it for the next year.

Anyways, you might try Desert Specialty Underwriters, Inc which writes Lloyds of London Policies. They are going to be expensive, but they insure high risk businesses. 505-332-4600

Eric