shopping for insurance for my saddle making business

[Go2Tex]

I'm going to be shopping for some insurance for my saddle making business and I thought I'd ask for some advice from the esteemed membership herein.

Anybody know of a company that specializes in this particular risk catagory? I'm guessing I'll need something with some product liability, premises med pay for customers who wander up, and some coverage on my shop building.

The problem is, of course, once you have a bonafide business at your home, your homeowners insurance will exclude any claim resulting from the business.

[wolvenstien]

right....

Reminds me when I was a contractor for the cable industry.... I had to have my own insurance incase I killed a customers equipment, the cable companys equipment, if I drilled through the house, fell through a ceiling, or whatever... also I had to have insutance on my truck and tools incase of accedent and theft and all that.... I went to an agent... he told me what I needed and I got it all through him at the lowest rates I could going through an agent.... most everything was a rider to the liability policy... it was not a part or all inclusive in the policy, it had to be added for a fee.... but I got the coverage I needed and it worked... though he told me that if I ever made a claim they would pay but then drop me.....

[Go2Tex]

..................though he told me that if I ever made a claim they would pay but then drop me.....

Yeah, that doesn't surprise me and then it would be difficult getting insured by anyone.

[Luke Hatley]

Yeah, that doesn't surprise me and then it would be difficult getting insured by anyone.

that is the insurance of the "AMERICAN WAY" take your money.....

good bye and dont let the door bump you on the way out.

BUT THIS IS SOMETHING WE ALL HAVE TO HAVE. whether, home

automobile or business....

[Cowboy Crafts Online]

The first policy I got on my saddle shop was though the local Farm Bureau. They had to run me under a Sporting Goods Store, because there is not a saddle shop policy in thier system. Then I found a local company in MO that gave me better rates and better coverage, email me and I will send their phone number to you. I dont know if they cover anyone out of the state.

Ashley

[Johanna]

Guys, I'm going to move this thread up to the main part of the board, because saddle shops aren't the only leather businesses that must carry insurance, and I'm sure others will be interested in how you decide to protect yourself, or may have experiences of their own to share about shop coverage.

When we had a custom leather shop years ago, insurance companies didn't want to touch us. They didn't have a place on the form for "leatherworking shop" and they didn't like the potential risk once we explained the business. They didn't like customers coming to our house (where the shop was!) and they were concerned about liability if our work was to "fail". (I remember bringing one agent a piece of 8/9 oz leather and inviting him to break it. He wasn't very smart, because he was impressed, and never gave a thought to a seam or rivet popping!)

I hope things are different now for the leatherworkers in business.

Johanna

[K-Man]

Go2Tex:

You're correct - homeowner's insurance normally won't cover the business side of the house. In fact, some homeowner's insurance companies will drop you if they find out there's a business being operated from the house, even though it may be legitimate to do so.

You'll need to determine how much coverage you want. Most businesses that are renting/leasing space have a minimum amount of liability coverage required, i.e., 100k, 200k, etc. Under that policy, some of the factors considered by the underwriter for the premium will be amount of shop space, value of equipment/cost to replace (single item vs total), what you're making/offering, retail cost of the goods, total amount of sales, risk of injury (both to you when making it and by the end user). If you have fire extinguishers and a security alarm system in place, that normally will provide for a lower premium. If you add employees, that may or may not affect the premium. The premium for employees is normally based on the salary and amount of work/hours they are being paid/performing. Most insurance companies will run an annual audit on you to make sure you're staying within the parameters of the policy. You won't be in trouble if you go outside of it, i.e., make more money than projected, they'll just adjust your premium accordingly. But if you signifcantly underestimate your gross sales, and they determine you did that in order to receive a lower premium, then you're probably going to be in the hot seat over it. They most often rely on your tax return as their audit mechanism.

There are some underwriter's who will want to limit what you can make/offer. For example, a couple of the one's our agent talked to did not want to cover any saddle work. I basically told my agent that while I probably would not do any type of saddle work, I didn't want to be limited on what I could do/offer. In our instance, some of the underwriter's freaked as soon as they heard the word, gun (holsters) and basically hung up on our agent. We've added other aspects to the retail side of our business over the last year, which I anticipated would cause a premium increase, but that did not materialize. The only parameter(s) placed on us was that the total sales amount for these items could not equal more than 20% of our gross sales. For example, if we have $25,000 in gross sales, we can only have $5,000 worth of sales for those items. One reason for a limit such as this may be the perceived elevated risk of the items being sold.

My recommendation would be to get as much coverage as you can afford, based on the amount of work you want, and will be able, to do. For example, we are required to have a minimum of $300k in coverage at the building where our shop is located. We opted to get $500k worth of coverage for literally just a few dollars more. As a side note, our premium dropped $200 this year in comparison to what we paid last year. (That doesn't happen very often does it?)

Edited July 19, 2007 by K-Man

[Go2Tex]

Go2Tex:

You're correct - homeowner's insurance normally won't cover the business side of the house. In fact, some homeowner's insurance companies will drop you if they find out there's a business being operated from the house, even though it may be legitimate to do so..................

Fortunately, I mentioned my intentions when I was getting quotes for my homeowners insurance and they wrote the policy, so that's not going to be an issue. But, the saddle thing.......geeze, I can't figure that one. You'd think the risk would not be that much. Anyone ever heard of a saddlemaker being sued for product liability? I suppose it could conceivably happen but it seems to me that the assumption of risk by the rider is huge. You hop on a horse and you're assuming a big risk from the get-go. If there was a big risk of product liability surrounding horse gear, it would all cost so much nobody could afford it.

Any lawyers in the crowd?

[Johanna]

I received a PM from a saddlemaker who said his insurance company insists that his customers sign a waiver, which their lawyers wrote, when he sells a saddle or does a repair. He is paying for coverage for liability in case someone falls off of a horse and sues him, not coverage for the shop, which he has included in his homeowner's policy. Go2Tex, since your shop is covered by your homeowner's policy, I'm thinking you are investigating a similar coverage or rider?

Johanna

[Go2Tex]

Well no, they said my shop, once I get it built, would not be covered because it is a business. They didn't suggest a rider, so I rather suspect they'll want to do the whole thing on a commercial policy.

There must be a couple million saddles sold every year and I can't help but believe that only a tiny fraction of them are sold with any kind of waiver or release drawn up by some insurance lawyer and signed by the purchaser. The hang tag might have some moronic warnings and legal mumbo jumbo on the back of it but, ... geezus....Can you just picture this scenario in your local tack store? "Er, excuse me, Mr. Cowboy, before I sell you this fine roping saddle, I have to get your John Henry on this insurance form. It says in case you fall off your horse, you can't sue us." .... "Oh, and by the way, are you aware that throwing a rope around a big, dumb animal like a cow, while riding another big dumb animal like a horse, is inherently dangerous?"

It may be real sound legal advice, I don't doubt that. It's just that there seems to be a very large gap between the real world and the world of insurance underwriters in this case.

Could it be that most saddlemakers just don't bother with it?