Insurance or LLC For Building Saddles

[FlyinBP]

New saddle maker here, with 8 under my belt.  As I complete more rigs, I've been thinking more and more about insurance.  While I try to build my products to the highest quality, and guarantee my work, life still happens.  Should something, God forbid, really bad happen, and if there were ever any question of whether or not my construction played part, or could have, in a resulting injury to a rider, what are some of the other builders out there using?  For a full fledged business, a fairly simple LLC seems like a very straight forward method.  However, if I'm just building rigs in my garage in my spare time and selling to friends and the occasion referred to customer, this may not seem like the best option.  I will also add, that as a military member, I move around a lot, so consistently registering LLCs in different states seems cumbersome.  What are some of y'all's thoughts?  I tell my customers I stand behind my work, and will fix/replace things if they break due to my construction, or anything other than normal wear and tear, but I want to look at this somewhat through the lens lawyer folks would look at me and my work through, especially since my name is stamped in each one.  

 

Thanks y'all!

Putt

-BP-

Edited July 6, 2021 by FlyinBP

[Ken Nelson]

When I first had a shop in town, my then insurance agent told me the following:  "The last person that had his hands on a piece of tack or saddlery will be the first person sued if someone gets hurt or killed using it, no matter whose fault it is!"  It is pretty insightful and true a good part of the time.  And that is why a lot of established good saddlemakers I know do not work on junk tack and saddles and refuse to bandaid problems for people on a budget.  I never repair a saddle I do not feel will be safe to use by anyone in my area.   Some-most of my customers use tack and saddles pretty hard.  I never lose sight of that.  I have paid for a lot of liability insurance I have thankfully never needed to use.  Your decision.

Edited July 6, 2021 by Ken Nelson

[LatigoAmigo]

1 hour ago, FlyinBP said:

what are some of the other builders out there using? 

You might reach out to these two very successful saddle makers that I knew "back in the day."  

https://skyhorse.com/ 

Lisa's email and Loren's cell phone are listed at the bottom of their home page.

[BtownMN]

I'm a firm believer that umbrella or liability policies are a good thing to have. I would not rely solely on an LLC designation to protect against someone going after my house. Depending on the state you might have to go through a broker to find a policy for leather manufacturing. MN was exceptionally hard to find something for some unknown reason. Insurance companies like ACT will provide umbrella policies and coverage for your tools/materials at home that might not be covered by your home owners insurance. I pay $400 a year for a million dollar liability policy and $50k coverage for materials/tools.

[kgg]

Having insurance is either a waste of money or a savior. If you never have a problem the insurance premiums were like flushing good money down the toilet but God forbid any goes wrong it can save you and your family from being financially ruined. Just like insuring your home you get replacement house / belongings insurance. Hopefully you never need it but if something like a total loss happens you will be covered. That I can speak of from personal experience.

kgg

[FlyinBP]

1 hour ago, Ken Nelson said:

When I first had a shop in town, my then insurance agent told me the following:  "The last person that had his hands on a piece of tack or saddlery will be the first person sued if someone gets hurt or killed using it, no matter whose fault it is!"  It is pretty insightful and true a good part of the time.  And that is why a lot of established good saddlemakers I know do not work on junk tack and saddles and refuse to bandaid problems for people on a budget.  I never repair a saddle I do not feel will be safe to use by anyone in my area.   Some-most of my customers use tack and saddles pretty hard.  I never lose sight of that.  I have paid for a lot of liability insurance I have thankfully never needed to use.  Your decision.

So you just pay for liability coverage on it's own, and not an LLC?  I agree with what you say in regards to repairs and used stuff.  I'm curious mostly trying to fact find for new-build gear.  Thanks!

[Ken Nelson]

The thing with building new horse gear is you never know where or with whom it is going to end up.   If you build a barrel saddle for someone it is not going to be as stout as a saddle you build for a steer tripper or a cowboy on a large ranch that does a lot of roping of big wild cattle.  I doubt any trail or pleasure riders would want a saddle as heavy as what I build for the cowboys I build for. But they don't use them that way either.   Another consideration is care your product will get after it leaves your shop.  I have had a few that were demolished  in a few months by someone doing really stupid things to them and with them.  I don't like the insurance premiums but figure it is part of the cost of doing business.

I am not an LLC.  My insurance agent tells me you still need business insurance even if you are a LLC.  My business insurance covers a lot more than liability.  Product liability,  physical liability,  consignment coverage,  customer product liability-used saddles and tack in for repair,  etc.  I do carry a personal umbrella policy but it does not cover  professional liability.  This day in time, I suspect he is completely right. 

I hope this helps and I am not trying to tell you  what you should do.   I don't know if I am right or not on this but just because you are in the right, does not mean you can win it in court and if you do, you may spend an awful lot on attorney fees.  

Edited July 7, 2021 by Ken Nelson

[FlyinBP]

5 hours ago, Ken Nelson said:

The thing with building new horse gear is you never know where or with whom it is going to end up.   If you build a barrel saddle for someone it is not going to be as stout as a saddle you build for a steer tripper or a cowboy on a large ranch that does a lot of roping of big wild cattle.  I doubt any trail or pleasure riders would want a saddle as heavy as what I build for the cowboys I build for. But they don't use them that way either.   Another consideration is care your product will get after it leaves your shop.  I have had a few that were demolished  in a few months by someone doing really stupid things to them and with them.  I don't like the insurance premiums but figure it is part of the cost of doing business.

I am not an LLC.  My insurance agent tells me you still need business insurance even if you are a LLC.  My business insurance covers a lot more than liability.  Product liability,  physical liability,  consignment coverage,  customer product liability-used saddles and tack in for repair,  etc.  I do carry a personal umbrella policy but it does not cover  professional liability.  This day in time, I suspect he is completely right. 

I hope this helps and I am not trying to tell you  what you should do.   I don't know if I am right or not on this but just because you are in the right, does not mean you can win it in court and if you do, you may spend an awful lot on attorney fees.  

This definitely makes sense.  I guess sometimes it costs money to save money.  So you have both a personal umbrella policy AND business insurance?  I really appreciate the insight.  

[Ken Nelson]

Yes a personal umbrella for when I am out of the shop living my life and a business policy for when I am working and covering what I do.

[FlyinBP]

On 7/8/2021 at 11:58 AM, Ken Nelson said:

Yes a personal umbrella for when I am out of the shop living my life and a business policy for when I am working and covering what I do.

Do you have a company you would recommend?  Been doing some shopping, but there's so many options out there.  Many don't have any clue when I say the word "saddle".