Insurance Questions

[BobJ275]

Hey all,

I have an LLC. I'm the only member. It's a home based business. I design and manufacture and sell products. I make a wide range of things.

I don't make lawn darts, but there is a possibility of someone hurting themselves. Think of selling a knife. Chances are if you cut yourself, it's you fault, but still, I feel I need some insurance.

The LLC itself should cover me personally, however, I've read, sometime courts will ignore that and go after the person. So, I'm thinking as my next level of coverage is to add a second member onto the LLC, probably my sister, as a non-paid VP type.

I'm also looking for product insurance. Does anyone recommend any companies to use?

Thanks

[turboguy]

Call Erie Insurance, Etna Insurance, Allied Insurance and ask who your local agent is for business insurance. Someday as your business grows you may regret that. I am going crazy with insurance companies agents wanting my business. One is coming in in half an hour, one I am having lunch with and an endless list is lined up. We have a deadline of next Friday when our policy needs to be replaces and I will be so very glad to stop hearing from insurance agents for a year.

[tallen]

Depending on what state you are in, and the exact nature of your business, we have several businesses insured with Maine Mutual Group (the cover much more than just Maine).

But to follow on with turboguy's suggestion, find one or two independent brokers who handle commercial insurance in your area, talk with them about what kind of coverages you need, and let them shop your policy to the various underwriters they work with.

Since you are operating your business out of your home, you should probably start with the agent who handles your homeowner's policy. Our broker set us up with both a homeowner's policy and a business owner's policy from the same company, so that if there is any question about where a claim lies, it would be two different branches of the same company duking it out, rather than two entirely different companies each saying the claim belongs with the other. (We actually have two different agents with our firm, one that handles our homeowner's policy and another that handles our business owner's policy, but at least they work in the same building for the same boss and know each other).

[BobJ275]

Iowa.

Yeah, I'm not all that worried about something happening at home. I can get a rider on my homeowners policy, which I will do at some point. I was thinking to ask him about product insurance, but I wasn't sure if he was the right person to ask. He got all excited when I got a CNC machine and was writing up all kinds of stuff for me to buy. I was hoping I might better stay on my shoestring budget if I shopped around. Thanks for the advice!

[Brian Altenhofel]

Definitely shop around. Shop both independent and company brokers.

My experience with insuring my home-based business has been that the business rider to homeowners/renters insurance was overall less comprehensive and more expensive than separate policies from different companies.

ETA: Also, try to get a copy of the policies first (or at least samples - insurance policies are 98% fill-in-the-blank forms with the other 2% being state- or industry-specific provisions). Read them and compare them. Know whether you are getting included or excluded peril policies and what they include or exclude. Included peril policies are usually less expensive, but they are very specific about what is covered. Excluded peril policies are more expensive, but they cover anything that is not specifically excluded.