Biz Insurance for a Gun Mfr.................
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    Default Biz Insurance for a Gun Mfr.................

    So my shop like many shops make "parts"....................I get a print, buy material, program, machine, inspect, ship......................that's how my biz insurance likes it.

    Now, I'm might be wandering down the path of a firearms manufacturer. I've been around this area of industry for quite some time so I'm not flying in blind and dumb. Another biz, legally separate from my current operation. I'm not rushing in on the current gun frenzyblack guns, ARs, semi auto pistol etc etc....................much more calm stable market. High end items for high end users. Any of yoos guys licensed firearms manufactures? What kinda protection do you have? Costs? Hiccups? Good/bad/ugly?

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    If the Dems remove the statutory protection for gun manufacturers,and open up the lawyerfest of lawsuits by third party victims of gun related injuries and deaths,no insurer would touch a gun manufacturer with a 40 ft pole.

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    Quote Originally Posted by john.k View Post
    If the Dems remove the statutory protection for gun manufacturers,and open up the lawyerfest of lawsuits by third party victims of gun related injuries and deaths,no insurer would touch a gun manufacturer with a 40 ft pole.
    If Uncle Bob had been born a woman, she'd be my Aunt.

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    Quote Originally Posted by TeachMePlease View Post
    If Uncle Bob had been born a woman, she'd be my Aunt.
    Now now, you don't know that for sure. Don't misgender your hypothetical relatives!

    To the OP, what does "might" entail? You might be getting into another aspect of the business which would define you as a firearm manufacturer, or you are getting into such an aspect of the business and you might be able to rules lawyer your way out of being defined as a manufacturer?

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    I have a couple friends that are 02/07 manufacturers(machine guns and suppressors)

    Both of them are millionaires (not from the gun business) and neither of them have insurance. Everything was carefully drawn up by lawyers and the business' own very little. They rent everything. Wanna sue them? All you will get is the name of the business and what little inventory they currently have.

    Insurance is a rip off. A carefully structured organization will put the insurance premiums in your pocket

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    What kind of firearms does your Aunt Bob manufacture?

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    I would wait 15 days, you might not want to be in the gun buss. or you may want in real bad... 2 weeks will tell...Phil

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    Quote Originally Posted by david n View Post
    Now, I'm might be wandering down the path of a firearms manufacturer.........
    So, your fixin' to maybe make parts that get actual serial numbers?

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    As Hardplates stated... A separate entity is the way to do it, especially since you mentioned dealing with end users directly.

    If you're talking about serialized parts, the manufacturing and sales entities will both need to have an ffl. The finer details would need to be worked out by a lawyer but the most important thing is to always protect your assets!

    The lawyers aren't cheap but insurance isn't either. Plus an insurance company will dictate how you run your business and might require a separate entity anyway.

    The only other advise I would add is to steer clear of items on the USML such as belt fed weapons (even semi auto) or cartridge firing weapons over 50 caliber. These are still regulated by ITAR and require compliance even if you don't export anything.

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    To my knowledge, there is some uncertainty whether an entity that rents from or is otherwise associated with another entity with the same owner(s) is adequately protected if things go south. I hope you don't find out the hard way, do your very best to keep them as separate as possible.

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    Heres my 2 cents.

    what ever you do apply for your 07 NOW, then in 30 days after you get your 07 Apply for your 02 (think I got the numbers correct).
    get this now cause come inaguration day you might not be able to purchase one again if the left has there way.
    then you can decide what you want to do.

    the money is in the black guns only when there in Danger. when there not in Danger theres no quick fast money and alot of cutt throating. There easy and fast to make as well as most parts.

    I know you said you didnt have a interest in them just wanted to throw that out.

    I been in the same situation as you since obama came into office the 1st year. I was on the fence. Matter of fact my filled out application still sits on my desk from like 10 years ago? Only reason I didnt fill it out is cause I hate dealing with the public.
    I wanted to do bolt actions rifles and single shots like the ruger #1's and Suppressor.

    Bolt actions singles O/U shotguns are going to sell but you have to offer quality not crap, people dont mind paying 800-3000 for a good action or more for a complete gun. if and only if the Quality is there, your not going to sell alot unless you have something new. but you will be able to survive and add to your other shop income.

    Manufacturing Supressors on the other hand there going to be more and more call for these. as people like the Noise reduction and I have seen more and more people buying them like crazy over the years.

    As far as insurance when I checked it wasnt really that bad and easy to get, I havent checked on it in the last 5-8 years.
    Definitely set it up as a completely different entity and just rent/lease your machines/building space to the gun side, if the gun side builds good for you then buy new machines put the old ones in the the gun business name. just cause the way the courts are leaning on gun issues. you dont want to loose your good stuff.

    personally I'm not a black gun fan. I like bolts, single shots O/U shotguns revolvers etc etc. from a money stand point the back guns are the money makers but only at a certain time.
    What ever you do keep doing your normally machining as its alot less headach

    Remember any Idiot can make and Ar very few can make something other than ar's

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    So, to review...

    Something, something, something, and Bob's your Aunt.

    Got it.

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    Quote Originally Posted by BoxcarPete View Post
    To my knowledge, there is some uncertainty whether an entity that rents from or is otherwise associated with another entity with the same owner(s) is adequately protected if things go south. I hope you don't find out the hard way, do your very best to keep them as separate as possible.
    You are somewhat correct. I was told if the rental company is only renting to one business and renting stuff at $1 a month blah blah blah it can be proven it's sole purpose is to protect assets and then it doesn't work. But if it rents to more than one company, charges a reasonable amount of rent, blah blah blah then this strategy works.

    I despise the courts, government, lawyers and whatnot but sometimes you have to fight fire with fire. In this case a competent lawyer on the front end can and will save lots on the back end.

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    So my shop like many shops make "parts"....................I get a print, buy material, program, machine, inspect, ship......................that's how my biz insurance likes it.

    Now, I'm might be wandering down the path of a firearms manufacturer. I've been around this area of industry for quite some time so I'm not flying in blind and dumb. Another biz, legally separate from my current operation. I'm not rushing in on the current gun frenzyblack guns, ARs, semi auto pistol etc etc....................much more calm stable market. High end items for high end users. Any of yoos guys licensed firearms manufactures? What kinda protection do you have? Costs? Hiccups? Good/bad/ugly?
    I ventured down that road for a while. Local shop in my town had just opened and somehow got in tight with the SE Tennessee drug task force. They actually brought me a "K" baffle and said they needed a suppressor that would have no (report) in an explosive area in case they got into a firefight inside a meth lab. Now, I'm a hard core enthusiast that has a collection large enough I had to shore up the footing in one side of my house from my Liberty safes and Ammo crates. This of course got my attention..

    At the time I was mass producing those railroad maintenance wheels and was just looking for something different. The detective and owner of Volunteer Ordnance Works came to my shop and had some pieces of baffles with them basically taunting me to get my 07 FFL and Class 2 SOT. Okay, here’s a couple of Carte Blanche standing in my office giving me free reign. Yeah, I heard when they said "no report" their excuse was they didn't want an explosion in a fire fight in a meth lab. Uhhh, Did they think the cooks were going to have suppressors also?

    I knew what they were up to and really didn't care, If I didn't make it someone else would. We made and tested dozens of designs and I was absolutely astonished at the ignorance of local LE and state SWAT. Basic physics was an unknown variable with these people. The first batch of suppressors I designed were 5.56/.223. They must have seen too many movies because during testing they had a massive ballistic "Crack" and they complained it was noisey. Granted it didn't have the concussion or the full flash but yet it wasn't "quiet".

    I tried to explain to these people that anything faster than the speed of sound is going to make a crack no matter what, They needed subsonic ammo. They finally ordered in some 72gr rounds with a small powder load to slow them down only to find their M4's couldn't cycle the sub sonic rounds. Once again i'm converting their AR's to AK style blowback system. Some of the cheap bastard's wanted to cut the buffer spring to not have so much compression only to find out if they fired a regular round it swelled the buff tube.

    some SR-25' American made AK's, DPMS Panthers all chambered in 7.62 have 1/2-28 standard AR threads. one would think a trained police officer would know 7mm is bigger than 5mm! Nope, So many times the owner of Volunteer Ordnance Works would bring me baffles and end cap for replacement that some monkey had fired a 7.72 round through.

    Beware getting into the firearms machining business. If you must then look into Safeco and State Farm for your insurance.

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    I met an officer who vehemently believed that rifling increased the muzzle velocity of the round.

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    Quote Originally Posted by mhajicek View Post
    I met an officer who vehemently believed that rifling increased the muzzle velocity of the round.
    People also think the longer the barrel the more accurate. Then they see 16" bolt guns shoot 1/4 moa all day long and realize they are wrong

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    A lot of people think you can eliminate 15kpsi of muzzle blast in something that fits in the palm of a hand......My answer is always ,yes its possible with a device the size of a truck muffler.....And as the local range discovered (youd think they would know),eliminating sonic noise is a lot harder ,cause its 20ft above ground level at elevation for a 1000yds shot.

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    Quote Originally Posted by Hardplates View Post
    I despise the courts, government, lawyers and whatnot but sometimes you have to fight fire with fire. In this case a competent lawyer on the front end can and will save lots on the back end.
    It helps but... My usual disclaimer:

    "I am not a lawyer."
    "A Nimitz-class carrier battle group is not a lawyer, either!"

    By which point, my table mates, Hong Kong's Chief Prosecutor and his predecessor, by then High Court Judge were laffin' at what might come next:

    Here's the killer:

    "Ultra Vires" activity by the "thought-he-was-protected" entity pierces the corporate veil.

    Strips away that protection. Entity in power can chose to fine heavily, much as global banks are routinely MILKED like a herd of cows for billions in fines ... but left operating. So MORE fines can be milked in future. As it they were cows, their CUSTOMERS ponying up the cash in higher fees and interest. All part of their operating costs. Hand-in-glove with "finance industry farmer" Governments greedy beyond mere taxes.

    Or shut yah down. Hard.

    You ain't HSBC, JP Morgan, Wells Fargo, nor Barclay's Brothers to be milked as profitably.

    Officers, Directors, potentially all owners, immediately and PERSONALLY become liable for all sins, real or imagined. moneys and jail time included.

    Second-generation of lawyers in my service recently retired, said:

    "You use that term more than anyone else I have known in over 40 years at law. Most Attourneys are not even familiar with "ultra vires" situations. Why so?"

    "Because part of my JOB, one Corporation after another, after another... was keeping arrogant Executives who thought they could do anything they FELT like doing ...TF out of JAIL... or risk of losing a good company to the wolves!"

    Those who did NOT have - and LISTEN TO - a "naysayer" of that sort (there are many of us, after all..) as grounding influence?

    See Bernie Ebbers or Aubrey McClendon, just to name two of MANY!.

    Meanwhile do NOT ass u me that a clever corporate structure is good enough, no matter HOW carefully operated.

    If "they" WANT your ass badly enough? Dems or Ripofflicans, either or neither?

    A crime will be found, or even CREATED - to fit the need to pierce that veil. One guy went down on "obstruction of Justice", died in prison, because he didn't even KNOW what they wanted him to know for their convenience - hence was UNABLE to confess to it and cut a deal.

    Look it up:

    "ultra vires".

    And be more careful than confident, going forward.

    Most especially if YOUR Attorney is unable to explain it, explain it well.... annnnnd "quantify" the risk for you in a(ny) specific endeavour.

    (S)he shrugs it off as de minimus? Thinks it will never be THEIR ass as will be in the vise?

    Go and find you a wiser, safer, consigliere.

    One who understands that it MIGHT be their ass, not just yours.

    Then also be one of the "good guys", whether you "like" the Laws or never..

    No need to cheat nor take foolish risks. The "good guys" can still make money.
    For longer, even.

    And they even get to sleep better of a night!


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    keep the good machines, and buy all future good machines in your current business.

    start David N's Gun shop as an entirely new business, buy 1 or 2 $5k machines that are so so, stick them in the back corner, but use them from time to time. Run the gun parts on your good machines.

    In the event you get in trouble, you don't have to be the one to prove to all of us if lawyers can pierce the rental company that rents to only one shop. Just point the lawyers to those grubby machines, they will have no clue what they are capable of making or not.

    This keeps ZERO connection between the two businesses, except that they are located on the same property. If original shop isn't a customer or anything in the gun business's books don't make sense how they could go fishing there.

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    Quote Originally Posted by Insert View Post
    keep the good machines, and buy all future good machines in your current business.

    start David N's Gun shop as an entirely new business, buy 1 or 2 $5k machines that are so so, stick them in the back corner, but use them from time to time. Run the gun parts on your good machines.

    In the event you get in trouble, you don't have to be the one to prove to all of us if lawyers can pierce the rental company that rents to only one shop. Just point the lawyers to those grubby machines, they will have no clue what they are capable of making or not.

    This keeps ZERO connection between the two businesses, except that they are located on the same property. If original shop isn't a customer or anything in the gun business's books don't make sense how they could go fishing there.
    Well.. yah don't need to be tooo damned PARANOID... "aware" and reasonably cautious to insure yah stay within the Law should do yah.

    But still... too many comic books. Too few real-world cases applies.

    "Cautious" that is not.

    Closer to a slam-dunk for the other side than at protecting your interests, actually. "Intent" actually matters, too, y'see. Proving it, one way or the other, is said to be hard, but.. certain congruences matter..

    An old expression is actually grounded in legal case Law.

    If it looks like a duck, has feathers like a duck, lays eggs like a duck, waddles like a duck, and quacks like a duck?

    We call it a duck.

    Even if it is just a confused Walla Walla Whining Wild Turkey.

    Sooooo.. it is kinda dumb to be overly confident at figuring there are far too many casual risk-takers that your one would never be "the one" as might get looked into.

    With all the mean-minded ratter-outter's who wish trouble for their fellow man so much in vogue these parlous days? Some looter-lie-bore-all teeny-bopper could try to make their facebook and twitter street creds off lying you into a look-see.

    Just because they CAN. This is not entirely new as risks go, but is likely to get worse before it gets better.

    Lybarger's Corollary to Sod's Law might then apply?

    All else being equal? YOU LOSE!


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