shop insurance question-

I'm about to move my shop into a rented space, and am wondering what options might be out there for coverage of loss of my tools, machines, random inventory, etc etc. in the event of say- theft, fire, acts of God.....

I'm in a gray area between 'harry homeowner doing hobbies' and full-on professional, yet my tools and machines are professional-grade (with attendant cost). Over the years I've had renter's insurance, but it was non-commercial, and they (the insurance co) specifically wouldn't cover professional tools for private coverage.

I don't want (or need) liability insurance, as walk-in tire kickers aren't my target market, don't need product liability, etc......

any companies I'd be better off calling first? any random thoughts or advice you gents care to offer gratefully accepted!

I'm sure you can find someone to take your money...

If you intend to run a business then you do need liability insurance. If this is a hobby, you just need some kind of asset replacement coverage. The two are not the same.

I'm at around 50-50 split between doing personal hobby stuff, and doing side work. The side work is a means to pay for the hobby stuff, but I certainly won't say 'no' if it grows enough in volume to allow me to quit the day job!

Out of curiosity, why do I 'need' liability insurance? Seems some here recommend not carrying it as it: A- the premiums -vs- benefits don't balance; and B- having liability insurance seems to act like blood in the water for shark ambulance chasers....

Liability is the difference between a hobby and a business. If a tornado blows away your hobby, no big deal. Get a new hobby or maybe start over with the same one.

If a tornado wipes out your business you can't make money. If you can't make money, you no longer have a business. Not to mention you can't make money to replace your loss.

The whole thing about insurance is can you afford not to have it? If the answer is yes, then fuck it. It's a waste of money. If the answer is no, you better have it.

There are other kinds of liability. What if you screw up a $10,000 part? What if someone breaks into your shop and steals your computer with customer credit information on the hard drive? What if your shop catches fire and burns down the whole block?

ewlsey said:

Liability is the difference between a hobby and a business. If a tornado blows away your hobby, no big deal. Get a new hobby or maybe start over with the same one.

If a tornado wipes out your business you can't make money. If you can't make money, you no longer have a business. Not to mention you can't make money to replace your loss.

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somehow I'm misunderstanding? liability ins wouldn't cover 'a tornado blowing away my hobby'??? that would be the 'asset replacement coverage', wouldn't it?

ewlsey said:

There are other kinds of liability. What if you screw up a $10,000 part? What if someone breaks into your shop and steals your computer with customer credit information on the hard drive? What if your shop catches fire and burns down the whole block?

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all good questions here, no doubt- but maybe I shouldn't have asked about that in this particular thread, I'm not nearly far enough up the food chain either in terms of my volume or in the value of my customer's parts to justify the cost (yet).

I'm sure you're 100% correct in saying "I'm sure you can find someone to take your money...", that doesn't automatically mean I'm going to have coverage suited to our particular trade! If a 'tornado blows away my hobby', insufficient asset replacement coverage would sink me, I have no doubt I'm more than $250k replacement costs on my tools and machines. I've talked to my insurance agent (handles my car insurance, etc), and she was like a deer in the headlights when I inquired about replacement of tools and machines in the event of catastrophic loss.

I probably was a little unclear in my original request at thread's start: I'm hoping for some kind of lead to an insurance agent/carrier that understands our trade, and won't be 'just taking my money' and then leaving me with a 'depreciated value' check instead of a 'replacement value' one.

FWIW- my agent never even uttered the words 'asset replacement coverage' policies

I have Sentry insurance. I didn't have to explain what I did, they know the trade.

I think the liability part protects you if you made a part and somehow something or someone was harmed you have coverage for if you get sued.

Liability insurance covers you in the event if someone tries to sue you (for whatever the reason) for harm to them in whatever fashion they (their insurance company) deem harmful, and is based on the amount of coverage you or your creditors desire/require.

Property insurance would cover you in the event of a tornado, theft, fire, etc........and is based on the replacement cost of your assets based again on the requirements of either you, or your creditors.

That's about the gist of it.........

We use The Hartford for our commercial insurance needs and Harleysville for our Workers Compensation Insurance.

Best Regards,
Russ

If you will be renting commercial/industrial property, just about any lease agreement will require general liability insurance.

Oldwrench said:

If you will be renting commercial/industrial property, just about any lease agreement will require general liability insurance.

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I'll second that. If you are going to rent a real commercial property, the landlord will want to be well protected to make sure your hobby/business doesn't cause them to lose their building, or cause other financial losses. If you are going to make the step, and you have $250,000 worth of equipment, you might as well ask your real estate agent, or the prospective landlord for the insurance section of their lease document. Then start calling insurance brokers that deal in commercial insurance with those requirements and see where you stand.

Oldwrench said:

If you will be renting commercial/industrial property, just about any lease agreement will require general liability insurance.

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that's something I hadn't considered! The shop is owned by a guy that does heavy fab/industrial maintenance (it's actually the building he started out in), and is sort of a 'friend' deal ('friend deal' meaning it's not a 'formal' commercial lease needing agents, etc)- he needs machining done occasionally, and I'll need work from him occasionally.....I'll have to talk to him about what he needs from me as far as general liability.

77ironhead said:

that's something I hadn't considered! The shop is owned by a guy that does heavy fab/industrial maintenance (it's actually the building he started out in), and is sort of a 'friend' deal ('friend deal' meaning it's not a 'formal' commercial lease needing agents, etc)- he needs machining done occasionally, and I'll need work from him occasionally.....I'll have to talk to him about what he needs from me as far as general liability.

Click to expand...

Cover your ass... Its still a business deal... Friends don't always turn out to be friends in the end.. And people that you think are friends
can/will completely ASS RAPE you when it comes to business transactions..

DO IT RIGHT!!! Its not only to protect you if he's a scumbag, its to protect him if you're a scumbag...

Just because he has a lawyer (and the deal may say you have to pay for it), and you have a lawyer doesn't mean its a fight. If neither one
of you has a lawyer on call, you can most likely go to a single lawyer and have them put your "deal" into a nice legally binding contract
that is beneficial to both people.

I'm buying the building I'm in from the land lord.. We made a simple hand shake deal, simple terms.. His lawyer, who is a good guy, is handling
his end.. My lawyer is handling my end... Its still a friendly deal, its the deal we shook on, but in legal speak, its a whole lot of words that
make little sense to me. A few little things, basically just crossing all the "T"s, and dotting all the "I"s to make sure everything we shook on is
rock solid on paper...

And lawyers know to look for stupid stuff.. Stuff I never would have even though of... Turns out that this INDUSTRIAL building that has
been her for 43 years is still zoned as an "Agricultural Holding Zone".. That is something that needs to be properly dealt with, and she knows
how to do that, I don't.

And good business lawyers... They have clients that are INSURANCE AGENTS.. *wink* *wink*...

Look for a policy titled "Business insurance" and find one that is industry specific.

It will cover everything that you can think of and stuff that you never heard of.

It is a standard policy that they modify the amount of coverages you need.

They can cover things like storm damage to your sign, vandalism, theft, fire, liability, loss of income, sewer overflow all in one policy. Only one check to write.

Because it is a standard policy that is industry specific, mostly for small businesses, they use a one size fits all.
My policy is around 100 pages long. Most of the stuff I do not care about but they add very little to the cost. A lot of the coverages are limited coverage. For example sign loss due to wind is limited to $2000. Not a lot but enough to cover most signs. If you wanted more they probably can accommodate you.

I have often thought that if I think I have an insurable event then I need to ask, because the policy is very wordy.

All that said, a standard policy that is tailored by industry can be affordable.

Mine is from The Hartford, which i believe owns Sentry. Farmers also sells their own business policy and Hartfords.

My suggestion is to call a local Farmers agent and talk it over.

Make sure you get a local agent. If there are issues you want them right there.

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