not sure where to put this post, just move it if need be....
i'm going to start doing some fab work and such like that around my area, and i'm curious as to the legal aspects of liability and things like that. what do i need to have them sign(if anything) if i build a roll cage or so? i'm confident in my skills, but freak things happen and i want my a$$ covered. any suggestions?
greg

Yea....talk to a lawyer....a good one

I'm not sure how you go about this but make sure that you are bonded, advice I heard a friend of mine get from a lawyer.;)

i dont know how much you are planning on doing, but a buddy of mine just makes everyone pay him cash and he feels that he is safe enough, if nobody has proof that you did the work then they have no case against you, right?? if you are gonna start your own little business than i guess you would want something more though.

Anyone can sue you at any time for any reason. The only thing that will protect you is being poor. Lawyers don't like poor people.

Originally posted by Chris Geiger
Anyone can sue you at any time for any reason. The only thing that will protect you is being poor. Lawyers don't like poor people.

Unless that poor person tripped on a crack in the sidewaqlk infront of your house and fell into the broken glass from a beer bottle that someone tossed out theur window as they drove by the night before. They love THOSE poor people!:rolleyes:

thanks for the tips guys, i was just wondering what any of the guys that fabbed stuff here for a living did. i am not going to be doing much, but maybe a cage here and there, sliders, bumpers, just more of helping people out than anything. but there will be a few "paying customers" so i was just checking. my grandfather is a lawyer, so i am going to get some specifics from him, i was just looking for some personal experiences.
greg

Don't build roll cages, call them sport cages and put a sticker on it that says do not depend on in case of roll over.
Just like smittybuilt.
:usa:

If they don't have a receipt or anything, how will they prove you built it?

i was thinking along the lines of "not intended for offroad use":D and all that good stuff. and no receipt is nice too. but we'll see, i really don't think anything would happen, but just when i think that, you never know. rather be safe than sorry...
greg

Originally posted by bignissan
i was thinking along the lines of "not intended for offroad use":D


May want to rephrase that for the guy that rolls his rig on the street.


As far as them proving that you built it.. the only way out of that is for you to lie to the investigators.... something I'm not willing to do. Don't let it get that far.

very true....oh well, i'll see what my grandfather says about it all. thanks!
greg

Just make it clear in writing that it is for esthetic purposes only, it's a light bar no matter how it ties into the frame. Just remember no matter how well you build something it can break due to many factors including material defect, workmanship and dumb ass driving but liability will always be on the builder due to the fact you will be the easiest to go after.

My best advice if you are really worried is to form an LLC or S-Corporation.

Get a seperate bank account in the business' name.

Make sure everything is labeled, "For Off-Road Use Only."

Then make everyone sign a waiver holding you harmless BEFORE you agree to work on their stuff.

Keep a small amount of money in the business' bank account.

You won't get an insurance company to cover a "fab" shop for anythign within the realm of reason, so don't bother wasting your time there.

That is my best advice.

Originally posted by CoryL
My best advice if you are really worried is to form an LLC or S-Corporation.

Get a seperate bank account in the business' name.

Make sure everything is labeled, "For Off-Road Use Only."

Then make everyone sign a waiver holding you harmless BEFORE you agree to work on their stuff.

Keep a small amount of money in the business' bank account.

You won't get an insurance company to cover a "fab" shop for anythign within the realm of reason, so don't bother wasting your time there.

That is my best advice.


and pretty good advice i must say.....

Originally posted by bignissan
i'm going to start doing some fab work and such like that around my area, and i'm curious as to the legal aspects of liability and things like that. what do i need to have them sign(if anything) if i build a roll cage or so? i'm confident in my skills, but freak things happen and i want my a$$ covered. any suggestions?
greg


Your ass will only be covered by reeeeeeeaaaaly good insurance. Anything custom fabbed will be your baby until the day that your fab work is removed, or the day they turn the rig into a cube. No matter what you have them sign, no matter how well you think you have covered your tracks, there is always gonna be some lawyer out there that will tear your "contract" to peices. Unless you are doing bolt-on stuff (that you have installed to the letter of the instructions) you won't have a manufacture to throw the liability back on. You are the manufacture. It doesn't matter how many times the rig is sold, traded, stolen, or given away.... Your name will always be on it.





You wanna put some lame ass label on it? Something like it's for esthetic purposes only? It's only a light bar? Then why the fawk would anybody pay you for a light bar when they want a cage? You want to put a light bar on my rig when I want a cage? Then I'm only gonna pay you the $149.95 that I can pay for it out of some parts magazine.



In my line of work, that's what I have to look at everyday. I'm not tryin to start a fight or bust your chops. I'm just putting it in the simplest terms possible. I would like to hear what Roggy, Schaffer, Silly, or TinBender have to say about it.

have your customers do some of the designing of their own cage.. then if it every comes back to you, call it faulty design.. a well built something won't hold up if the design sucks.. then pick apart the design and return the blame to the owner.. you know, the one who designed it.. =]

Originally posted by Bigger Valves
have your customers do some of the designing of their own cage.. then if it every comes back to you, call it faulty design.. a well built something won't hold up if the design sucks.. then pick apart the design and return the blame to the owner.. you know, the one who designed it.. =]

I don't think you quite get the full intent.

Regardless of who designed it, they will come after you. In fact the other parties would probably go after.....

1) fabricator
2) steel manufacturer
3) welder company
4) welder gas company
5) wire company
6) automobile manufacturer

Lawyers don't give a shit what is realistic. They will go after everyone until they get something.

You guy's are probably reading this and thinking bullshit. Someone I know has been through the horrors of a failed product (that he worked on) and the suit has been going on for a while now. He made a total of $20 on the project, but this one's going to cost him in the $250,000 range.

Pretty fawked up, isn't it?


Advice...
-buy insurance
-run all money through business
-talk to a lawyer and accountant to determine what type of business structure suits your needs

by not first establishing the correct divorced business entity with the proper insurance, you will put everything you own and every buck you make on the line every day. cash payments and phony stickers will not save you in the event of a lawsuit. remember that even if you are fortunate enough to prevail in a lawsuit, the cost to successfully defend yourself is beyond the means of most-hence the value of insurance.

Originally posted by jdrocks
by not first establishing the correct divorced business entity with the proper insurance, you will put everything you own and every buck you make on the line every day. cash payments and phony stickers will not save you in the event of a lawsuit. remember that even if you are fortunate enough to prevail in a lawsuit, the cost to successfully defend yourself is beyond the means of most-hence the value of insurance.

Very true. Until you're a corporation, your personal finances are at risk. Go out and get some liability insurance, I had to have it as a computer consultant so if I screwed up a company's systems, they could sue me but the insurance company would pay. Talk to a lawyer and an accountant.

Don't forget, those people are business expenses. :D

Yep, basically you want a corporate veil to shield your own personal assets from being seized should someone sue the business.

I would spend a few bucks and speak to an attorney that deals with business law.

Jay

excellent info guys! that's what i was looking for! does anyone know the range of liability insurance for this kind of stuff? what company to use? thanks!
greg

Originally posted by bignissan
excellent info guys! that's what i was looking for! does anyone know the range of liability insurance for this kind of stuff? what company to use? thanks!
greg

Call your auto insurance agent, especially if they carry life, renter's, etc. You might get some sort of deal for having multiple policies. I was going to get mine through my auto insurance broker.

Bryan

Originally posted by CoryL
My best advice if you are really worried is to form an LLC or S-Corporation.

Get a seperate bank account in the business' name.

Make sure everything is labeled, "For Off-Road Use Only."

Then make everyone sign a waiver holding you harmless BEFORE you agree to work on their stuff.

Keep a small amount of money in the business' bank account.

You won't get an insurance company to cover a "fab" shop for anythign within the realm of reason, so don't bother wasting your time there.

That is my best advice.

Bignissan, you need to listen to Cory. See that little CRLcustoms (www.crlcustoms.com) in Cory's sig line? Guess what, he owns a fab shop! He just got done doing what you are getting ready to do. You'll never get an insurence company to cover your work. Too much liability, they won't touch it. Cory's done all the foot work, for people just like you. He's know's what he is talking about, and he makes some kick ass stuff too! take a look....;) :grinpimp:

As an insurance agent I cant find any company that will write that type of risk. The industry is running away from those types of risks right now. I have been trying to get liability insurance for this 4 wheel fab shop and since they make cages no company wants to take that liability on. I did find one and there is no way they could afford it.

thanks!!
You'll never get an insurence company to cover your work

then what do i need to do in the insurance department? as long as i have a divorced company name, and have a little bit of money in the co. account, and do everything through the business, then can they still go after my personal assets?
greg

No, if you form an LLC (limited liability corporation)....your personal assets are protected.

Go here: http://www.nolo.com

It's a very good resource for law info, and should entertain you for awhile :D

Originally posted by big97redtj


I don't think you quite get the full intent.

Regardless of who designed it, they will come after you. In fact the other parties would probably go after.....


i wasn't serious.. there's a whole lot of crap to it.. i know.. i was poking fun of trying to make it too simplistic.. :rolleyes:

Yep, divorce your 'company' from your personal assets. Like a earlier post said look into the various ways to incorporate and the advantages/disadvantages of each type. Remember to do the income tax bit at the end of the year to show you are making something.

I watch a welding board where someone wants to start a small 1 or 2 man company to do welding. One million in insurance is going to run him one grand a month. And it seems that one million is the bare minimum on liability insurance (and it was hard to find).

I would think that if he only builds bumpers and sliders that he would never get sued. The cages is where it would be hard to get coverd on. The bumpers would be alot stronger than factory equipment so there should be no reason to get sued.

that's the part that i'm worried about, is the roll cages...i'll see how it goes i suppose, i won't build any cages for anyone (other than friends, and even them i'm just helping) for a while. thanks again for the input guys.
greg

Originally posted by Lon wlf
The cages is where it would be hard to get coverd on. The bumpers would be alot stronger than factory equipment so there should be no reason to get sued.

or all the more reason to sue him...there are no crumple zones and there is no impact crash testing....of and theres that little DOT number thats missing...


:usa:

yea think about the airbag systems that depent upon the bumper to give to set off a sensor.......Try going kits....you bend it...they build it.......I try to keep it to that but stray occaisonally...trying to get more into jsut buggies to not worry about that stuff

if you wanna cover yourself make them sign a paper that says you accept no responsibility to injuries or damage caused to the vehicle.

but will that really hold up in court?

NOPE!!!!!

that's what i thought

lots of small companys in the same shape insurance wise. either the insurance is simply not available to the little guy or the cost is prohibative in the context of the overall business plan. many small companys advertise that they are insured, but when asked to prove it, it turns out they are operating "bare ass naked" insurance wise. so assuming that insurance for you is not available and that your intent is to fab products of high quality free from inherent defect, what do you set up? already discussed the need for a divorced corporate entity-my suggestion is to set up two LLC. the first LLC would cover your primary business activities (essentially a shell corp) and include the identity of your fab operation, while the second LLC would hold all the tangible assets used in your business (building, vehicle, equipment etc.) and be identified by a completely different and unrelated name (nothing to due with fabrication, welding, automotive ect. please). the second LLC rents/leases everything to the primary. with limited cash on hand, the assets of the primary would then be limited to inventory of raw material, consumables, and whatever product is finished. the fact that your primary LLC has very limited assets may in itself deter litigation. in the event of litigation and judgement against you, your exposure/loss is very limited and likely wouldn't prevent you from continuing on if you wanted to. corporations are easy and inexpensive to set up in most places these days, and corporate tax returns easy to prepare with available cheap software. use inexpensive accounting software to keep the books and document that the LLCs are seperate entities. the cost of setting up and maintaining the corporations is offset by the fact that you are not paying an expensive insurance premium.

Originally posted by CoryL
My best advice if you are really worried is to form an LLC or S-Corporation.

Get a seperate bank account in the business' name.

Make sure everything is labeled, "For Off-Road Use Only."

Then make everyone sign a waiver holding you harmless BEFORE you agree to work on their stuff.

Keep a small amount of money in the business' bank account.

You won't get an insurance company to cover a "fab" shop for anythign within the realm of reason, so don't bother wasting your time there.

That is my best advice.

this is exactly what you need to do. make sure the business has a licence and is incorporated. if its not inc, anyone that sues can go after you, if it is, only the business. also, note the small amount of money in the acount, like some one else said, lawyers dont like poor people. have a lawyer draft the wavier fot you, its not that much $.

jdrocks, that is just plain sneaky - I like it!

Just a compilation of facts and fiction mixed together to depict the situation I was in to give you some food for thought.

Jdrocks is right on, that is what I did for my Long Arms.

I was quoted $25,000 a year for Liability insurance. Lloyds of London.

I worked until last week at Idaho Supreme Court, (Network administrator), in discussing this with many of the Justices and law clerks we came up with.

A waiver is not worth the paper it is printed on, against a lawyer. However it will stop 99% of the individuals from coming after you.

The problem with a waiver is that if a guy signs the waiver, and his wife is driving and has a problem, she never signed the waiver. You can't make it state that he will warn everyone, he can't give up their rights for them.

If he then sells the rig, the next owners would be able to come after you as well, if there was a problem.

As Jdrocks and a few others have said, you need an LLC, mine cost me $100.00 in Idaho. You will need to keep the money separate and NEVER loan money back and forth.

You need not fear the individual that is involved in the wreck, however if their insurance company pays out $100k in medical expenses. They will sick their high priced attorney on you and will nail you for all you are worth. In the case of a properly setup LLC they will never get to you, just the assets of the LLC.

My plan was to pay myself a paycheck for a percentage of profit. Then leave a small amount of money in the business. Then if you are sued, they can only take the assets of the first LLC.

I have since decided that it is too time consuming and I can make more money elsewhere in less time, so I am not going to be selling my Long Arm kits. It is a fun hobby as we all know, but it is not nearly as fun when you have to do it to pay the house payment. If your intent is for just side work, then go for it.

I sold 2 kits at $1300.00 each and just refunded their money, I have the kits done sitting in my garage. If you are going to it, and do a lot, then just like an insurance company you will make enough profit to outweigh the risk. In my case I choose to take a $2600 loss so that I would not have to worry for the rest of my life.

I may continue to sell a few small items, however not anything that has much potential liability.

keep in mind the name of the LLC. A small thread like this same thing was over on colo4x4, with the exception that the guy doing the work had engineering in the name and by law he needed to be/or have an actual engineer on payrol... well he wasn't and may loose his house and everything for cause of it..... Look into names and legal issues that may accure.

I have a thought about this.

to say that you have incorporated the buiness protects your
personal assets from your business assets. okay. but, most of
us all start a buiness from their personal tools, etc.

here is my question/observation:

could you as the "buiness-owner" rent your tools to the business
for $1 per year just to avoid the possibility of a lawsuit, and thus
saving your tools from being part of the confiscated/seized/asset-
forfeture????????????

does that make sense to anybody-?

same could be said for your "shop" that you rent to your business, or the company vehicles, etc.....

here is the "other" issue........ taxes...........

can you still purchase/depreciate equipment on your taxes
from your personal tax filing since you rent your tools to the
business (at a big loss by the way)-------???

I might ask my CPA-brotherinlaw that one..........

--Sherpa

That kinda what jdrocks was getting at, by using 2 LLC's One to use as "the business" the other to use for Shop, tools, ect..... One subleases' from the other, like you said, paying tool rental, and space.

So if they would come after the business, then they really only get the name and the little funds in the account.

Vary interesting