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  1. #1
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    Default looking for a new insurance company

    need to find a reasonable insurance company for a small business in Michigan that handles manufacturing companies. also what are people paying for their insurance coverage. I know that's a pretty broad topic, but i'm hoping to find a policy that covers general liability as well as product liability. we manufacture some automotive products that I would really feel better about have some coverage for. none of them are high risk items but you never know what some genius will do. for the most part we manufacture parts to print and If I have to drop the products as they aren't a major part of my business I will. sorry this is a little scattered but i'm really aggravated about this and my policy is being cancelled this sunday.

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    We use Harleysville, which I believe has now become Nationwide.

    We do not have product liability, and are not required to have it from any of our customers.

    I recall our policy being in the neighborhood of $3600/yr. Again, no product liability, just a 2 Milllion general commercial liability policy.

    Not sure how much the rates are governed by state and business type though.

    Later,
    Russ

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    Automotive and product liability in the same sentence are red flags for an insurance company. Try adding performance or racing to that sentence. What have you been quoted for coverage? Try Lloyd's of London.

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    one some level its really sad that the industry Is governed by people who really don't understand what they are insuring. I guess that's the nature of big business. I've been quoted everything from 7500-18000 per year. going up from $3600 with no claims in 10 years.

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    Years ago I was quoted $10000 a month for product liability. It is not just the insurance company's, the courts give out huge settlements for stupidity.

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  9. #6
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    Why were you dropped? Was it for the specific set of products that is currently the issue?

    You probably need to find an independent agent that can learn about your business and appropriately categorize your product.

    It is at times more effective to have a good business structure (rather business structures) to limit liability.

  10. #7
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    You DO NOT want product liability..

    You only get sued when you can pay out... If you have a 2mil (or whatever) liability policy,
    its an invitation, and you will get sued...

    Repeat after me "I make parts to the prints the customer supplies".... "What is it used on?"
    "I make parts to the prints the customer supplies"... Rinse and repeat...

    Even if you aren't going for product liability, they don't want a single thing to do with you
    if you are making a risky product.. They are worried they will get tied up in something they
    aren't even insuring..

    I'm not even sure who I had, but they sucked.. $386 a month. 2mil general liability, 160k ish
    on the machines.. And some other stupid shit.. I bought the building and had to include the building,
    I though I was going to get screwed.. I ended with Farmers.. same $2million general liability, they
    tagged the building at $386k, I upped the equipment to 280k, plus all the other misc. BS.. Fire and
    theft and "Up to 9 bushes or trees at $85 each"... $132 a month last year, $150 a month this year.

    And as far as the product liability thing goes.. Go talk to a lawyer... A good lawyer, not a
    cheap lawyer, a GOOD lawyer.. They know the laws in your state, they know how to deal with this stuff.
    You might be best off making your product in your company now, then selling it to an LLC (possibly in
    another state, possibly owned by somebody else) and then selling it to the public.. Double insulation...

    Edit: For the record, dealing with insurance on a machine shop is aggravating, and its bull shit... Its
    something that should be easy, but its not... An insurance agent that isn't an idiot is helpful..
    Lawyers are helpful there also..

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    Every state has different bankruptcy laws. Keep your real estate financed enough that no one could touch it. If someone goes after you file chapter 7. It worked for Trump. Even if you have product liability, there are different types. The more expensive insurance will cover you for the life of the product. The other type will cease coverage when you stop paying. You could be 10 years into retirement and still get sued.

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    If you are making to print then we assume your customer has performed design and engineering to create the print and assume part goes into something they sell.

    So step one would be to ask how the product THEY sell is protected and given they are providing prints ask for documentation showing they are fully responsible for design liability.

    Simply explain that you need to renew your insurance and need clear documentation for use in establishing coverage.

    Pay attention to remarks from insurance sales guys and get 3 bids so you can get 3 opinions of the document.

    Take the document and their proposed policies to a legal advisor to get independent evaluation.

    Sent from my SAMSUNG-SGH-I337Z using Tapatalk

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    You need to find a good broker who works with all companies, not tied to one. Insurance is very complicated, to say the least. I have a general business policy with Liberty, that has general liability, and it has some limited product liabiltiy as well, rolled into a policy that covers my shop buildings and equipment, as well as equipment and product on job sites. They might be able to cover you, if you dont get too pushy about "automotive product liability"- which is why you need a broker to finesse the way its written.
    Lloyds is also not a bad idea- it sounds more exotic than it is.
    I also have a Lloyds policy- I am in a flood zone, and neither my homeowners, nor my Liberty policy will cover my business buildings for flood insurance, but Lloyds did, and for a competitive rate.
    My broker arranged it, Lloyds works with brokers all over america.

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    i'm sure all insurance companies are scared as hell over the automotive market after the air bag issues, and the faulty tires etc. will check into the sources. thanks.

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    Quote Originally Posted by SDConcepts View Post
    i'm sure all insurance companies are scared as hell over the automotive market after the air bag issues, and the faulty tires etc. will check into the sources. thanks.
    I made drivetrain parts for 3000 horsepower cars. Signed waivers are not worth the paper they are written on in court. I can not blame the insurance companys.

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    did you design the parts for the drive trains or were you just making parts to print? that's really the big difference. at those power levels there are no warranties, no garuntees, etc. one thing I don't get is how fab companies maintain any insurance. their products can be all one offs. how do you insure something that completely different from the last thing you made? when you have a repeated product that's one thing, but when you do nothing but prototypes and one offs that's a whole other case.

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    I designed and manufactured the parts. R&D was continuous, nothing bad ever happened. What if someone takes a part made 20 years earlier, made for 1/2 the power and has a mishap. Liability never ends.

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    well If the part was used in the wrong application whose liability is it? should fall on the installer, not the manufacturer, unless design changed and part was rated differently back then. do you carry product liability coverage? our parts go into engines, help reinforce components and prevent them from failing.

    ultimately if I have to we will stop servicing the market its a small part of our business,

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    If something bad happens, they will try to sue everyone involved. It's not that you can't win, its the cost of defending yourself.

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    moral in life, stay broke and don't try. might as well get the hot dog cart, but I guess someone could choke on a bun. probably need liability insurance for that too, in case people are too stupid to chew. LOL

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    Don't laugh, what if someone got food poisoning and died. You don't have to be broke, you have to control what assets a court could go after. Like my father in law told a judge "no profits your honor, just lots of cash".

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    One key point to remember is that in order to get sued, someone has to prove it was your part or product!

    Sure, most shops like to stamp or engrave their logo or similar, but ask yourself do you really need to? Almost everything we make, somebody else is making the same thing. (Ahem...China) Whose to say without labeling that it wasn't their part or product that caused the problem?

    If your part or product has no identifying marks, then it's going to be mighty tough for some scumbag law firm to actually prove beyond absolute doubt that it was made by you. Especially years down the road....

    There's not much about a precision machined part that would positively, absolutely link it to your business...even if you had a patent on the part/product, that doesn't mean the foreigners haven't copied it.

    And yes, there are paper trails of invoices and payments and such, but then again, those are not absolute proof that the suspect part/product was yours.

    Just another take on all this "fear the liability" chatter....

    ToolCat

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    Pursuant to converterking's kind words about me over in the social justice warrior subforum I will try to contribute to this discussion—unfortunately, he is 100% correct that product liability insurance is not obtainable for the manufacture of race car parts. Years ago, before the industry gained public recognition, the language in a business policy which dealt with "completed operations" could be construed to cover manufactured products. Nowadays, forget it. I actually asked Lloyds back in the early 80s and after I told them what we make (and like an idiot, ran my mouth about that week's claim to fame, which was the steering rack in the winner of the stock-car class at Pike's Peak) they wouldn't quote it. He didn't laugh, but he wouldn't quote it.

    My opinion is that you should be selective about who you sell parts to (insofar as that is possible) and at the very least, publish disclaimers prominently in your catalog which point out that motorsport is inherently dangerous. And be able to demonstrate that your procedures embody due diligence in every aspect of manufacture, including random drug testing according to a detailed written policy which every employee has signed.


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