Insurance

[rccolt45]

For those of you selling your holster on line do you carry any type of insurance? If not are you concerned that a customer may sue ? What do you do to limit your liability?

[Steven Kelley]

Yes, I have insurance. Purchased it through State Farm, where I have my auto and homeowner's. I believe it's either $1 million or $2 million liability and it's fairly inexpensive.

[SteelcityK9Cop]

Steven....

I'm scheduled to meet with my State Farm agent in a week to talk about product liability insurance. I have my auto and homeowners through them as well. I asked a rough estimate regarding cost and they couldn't give me one. What's your approximate cost per year with them?

[Steven Kelley]

Steven....

I'm scheduled to meet with my State Farm agent in a week to talk about product liability insurance. I have my auto and homeowners through them as well. I asked a rough estimate regarding cost and they couldn't give me one. What's your approximate cost per year with them?

If I remember correctly it's about $300 a year.

[LeatherWerks]

Let's assume for a minute you build a holster for person X. This person loves the holster, but for some reason some Sunday morning the gun falls out of the holster, hits the ground, discharges, and kills an innocent by-stander. A civil suite is brought against the person carrying the gun in YOUR holster.

The person and their attorney suggests that the holster YOU built is somehow defective, not the correct amount of retention, or some obscure factor none of us could never see as a problem, except for lawyers...they see ALL the possibilities.

You have a 1 million dollar policy to cover these matters, but your net worth (your cars, your home, your 401Ks) is much more than the face value of the policy. Will the lawyers cut you some slack and just sue for the value of the insurance policy.....probably not. In court they will sue for an amount higher than the total value of all your assets in hope the jury will award most of your assets to the plaintiffs.

How do you protect yourself? You can't operate as person A (dba) "doing business as" X leather Company. To truly protect yourself, at minimum, you have to set your company up as an LLC, a Limited Liability Company.

As a LLC company, you can still be sued, but only for the assets directly owned by the Limited Liability Company. There are many rules as to how your business assets are titled, and how you conduct business in general. Your attorney can explain this.

I use to make gun holsters....I don't anymore except for myself. I now make mostly dog collars. Can you imagine how much someone would sue me for if their prized dog broke it's collar and bolted into a busy intersection just because he or she saw a squirrel? Could I ever expect that dog to be strong enough to break my prized dog collar?

We live in a sue happy society but there are ways to protect yourself. Contact an attorney, setup the best business model for your particular situation, .....you'll sleep better and if you do get sued, you'll probably not be doing leather work in a box under your local

highway overpass.

Steve

This is not legal advice but information I've learned over the years. Don't let lawyers take all your assets if something goes wrong.

Edited May 8, 2014 by LeatherWerks

[BDAZ]

LW, really good food for thought! Actually about all products. A strap that breaks and drops a $10,000 guitar on the concrete? Lots of lawyer chum. I'll be talking to my agent and accountant tomorrow.

Cya!

Bob

[JLSleather]

How 'bout just a bit of common sense thrown in the mix before we all git 'gun shy'. An accidental shooting by someone with your holster? You are no more responsible than the car dealer is if you're in an accidental collision.

Someone may well attempt to make you look responsible, and thus liable. Standard issue - especially if they know they are wrong, in which case the strategy is to baffle and muddy the water. But, you have to have done something BEYOND make a holster to be liable. Car manufacturers selling cars with exploding gas tanks - liable. Same car man selling perfectly sound cars to drunks and reprobates - not part of the same picture.

[LeatherWerks]

I disagree to some extent. We're talking about product liability issues and over zealous lawyers that will attempt to show a jury that your holster is somehow defective. That you don't have a quality control department, you don't have an engineering division and so on. You will find lawyers that will go that route, especially after they find out you have enough money to make it worthwhile.

You could hire a good expert witness to refute the lawyers claim. One that comes to mind is John Bianchi. If anyone knows gun leather, it's John Bianchi. You could fly him in, set him up in a nice hotel, pay him 500.00 an hour and he might convince a jury that the prosecutor is incorrect.

The whole point I was making with my post is that for very little money, you could set up your company as an LLC. If the tragic event we've been discussing ever occurred, and the lawyer saw that the LLC owned an edger, a couple of round knives and a Tippmann Boss, then it would probably never get to court in the first place.

Steve

[St8LineGunsmith]

LOL Lawyers will see I dont have enough money to make it worth while and will leave me alone

[BDAZ]

If the tragic event we've been discussing ever occurred, and the lawyer saw that the LLC owned an edger, a couple of round knives and a Tippmann Boss, then it would probably never get to court in the first place.

The first thing a lawyer will try to do is "pierce the corporate veil" which means they will look for any irregularities that will dssallow corporate protection. Didn't hold a directors meeting in 2007? Didn't file a particular document with the stated 5 years ago?

The protection of a corporation is over rated. Your best protection is to shield your assets so you have nothing to go after.

Not a lawyer so take this as worth what it cost.

Cya!
Bob