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Liability insurance/issues for home mechanics?

Old 10-19-21, 07:17 PM
  #1  
sunburst
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Liability insurance/issues for home mechanics?

I recently decided to advertise myself as a mechanic due to the pandemic supply/demand situation at my local shops. We've lost 3 of my small town's shops in the last few years and are left with a chain store, Mike's Bikes, that was so backlogged that they hung a sign saying they would only service bikes they sold. It has eased a bit now but still there is a two week wait.

Anyway, two or three months into my wrenching career, and a lot of happy customers later, a bike-wrenching/flipping friend says something like "I would never do that due to liability". This jives with a letter a woman wrote to a financial columnist wanting her retired husband to either get liability insurance or stop being the neighborhood handyman. This is my situation in a nutshell.

Can I get sued if a bike I work on breaks down and causes a crash? For that matter, what about bikes I flip? Any potential liability there?
What do you home mechanics do? Buy insurance? Not worry/think about it?
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Old 10-19-21, 07:27 PM
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Anybody can get sued for anything

I am not an expert but I am pretty sure you are exposing yourself to potential personal liability (house, savings, etc) if you advertise, and charge for service and if the service proves faulty and there an injury. all it takes is one instance to put you into a bad place

If you are advertising, you have a business and technically you need a business license

I know a local charity I work with has a double/triple check system to ensure volunteers work is checked by a certified mechanic
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Old 10-19-21, 09:16 PM
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You might want to talk to a small business lawyer or even just doing searches for free legal advice info on the net for your area. I've used both for another situation and found that about 95% of what I needed to know could be found on the net but a lawyer is very valuable to have as a backup for whatever decisions you make to cover your arse. As Squirtdad mentioned anybody can sue and just dealing with a potential suit can get very expensive even if you have no fault in the complaint.
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Old 10-19-21, 09:22 PM
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Agreed that insurance is the right thing to do for your customers. After all if something should go wrong due to your mistake and that took the bread winner from providing for their family wouldn't you hope that you could make good the loss of income? (and if you say "no" then please get out of this industry fast and don't let the door hit you on the way out). It's common to only look at protecting one's own finances but I've felt that was rather self centered and one more example of why we have some of the social issues we have.

Know that true business liability insurance will require the other state and federal rules for running a business be followed, like sales tax collection, business licenses and such. Also know that a personal liability policy (sometimes called an umbrella policy) won't cover your business activities.
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Old 10-19-21, 09:43 PM
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↑↑↑ Thanks Andrew R Stewart it needed to be that clear.Stewart
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Old 10-19-21, 10:02 PM
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The above stands if you have a shingle hanging out and charge. I help as a volunteer any and all in our community and my umbrella policy will protect me in a situation as long as my input is view as totally voluntary and accepted that way.
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Old 10-19-21, 11:46 PM
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Not to change the subject but I stripped my single speed down last weekend, redid the bearings, replaced the bottom bracket and repainted the handlebars, new brakes. New chain, chainring and freewheel.Disassembled and Cleaned everything with a toothbrush and alcohol.
Finished Sunday night.
Monday at lunchtime I was busting and excited about taking her for a ride, took it out on the driveway and started to mount her, but suddenly I remembered “ this 18 pound thing is going hurtle downhill next to cars at 35 mph” . That jolted and stunned me.
So I sat it on a bike stand and checked every one of the 20 odd bolts ... Everything okay.
Then I noticed my upside down chain.

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Old 10-20-21, 05:06 AM
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Yeah, don't do what I did. I charged for services as a neighborhood handyman for many years without insurance, well aware of the risk. I ran the risk because I didn't need the money and didn't really want to do the work, but people I knew really needed help they couldn't find or afford. And much of the work was bartered (dinner and beer). I told myself they wouldn't sue me, but Andrew S. above has a great point protecting your customers/friends/neighbors.

I volunteer at a non-profit bike shop which is insured and has a very good QC policy. I've worked on a few neighbors' bikes too and that gets me a little nervous, especially on the brakes. I do all my own auto work, including brakes, but I sure won't do a brake job on someone else's car. A mistake there could be disastrous.
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Old 10-20-21, 05:37 AM
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Also consider your current home-owners insurance. If you're running a business in your home, say your bike shop is in your garage, you have a number of bikes in for repair, you have a fire..your insurance adjuster may see a business in the remains and deny coverage. Yes..a stretch, but it's good to be aware of the issue..
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Old 10-20-21, 06:04 AM
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All this is why it's so hard finding a babysitter these days.
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Old 10-20-21, 09:09 AM
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A constant specter in litigious CA, but I've sold many bikes without a problem. Also, have helped friends repair their bikes, but that's probably less "dangerous". I wouldn't do it as a business though, and have never taken money except (obviously) for bikes that I've sold.
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Old 10-20-21, 09:17 AM
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Originally Posted by AJW2W11E View Post
Not to change the subject but I stripped my single speed down last weekend, redid the bearings, replaced the bottom bracket and repainted the handlebars, new brakes. New chain, chainring and freewheel.Disassembled and Cleaned everything with a toothbrush and alcohol.
Finished Sunday night.
Monday at lunchtime I was busting and excited about taking her for a ride, took it out on the driveway and started to mount her, but suddenly I remembered “ this 18 pound thing is going hurtle downhill next to cars at 35 mph” . That jolted and stunned me.
So I sat it on a bike stand and checked every one of the 20 odd bolts ... Everything okay.
Then I noticed my upside down chain.
"upside down chain" **********???
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Old 10-20-21, 10:13 AM
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Originally Posted by sunburst View Post
I recently decided to advertise myself as a mechanic due to the pandemic supply/demand situation at my local shops. We've lost 3 of my small town's shops in the last few years and are left with a chain store, Mike's Bikes, that was so backlogged that they hung a sign saying they would only service bikes they sold. It has eased a bit now but still there is a two week wait.

Anyway, two or three months into my wrenching career, and a lot of happy customers later, a bike-wrenching/flipping friend says something like "I would never do that due to liability". This jives with a letter a woman wrote to a financial columnist wanting her retired husband to either get liability insurance or stop being the neighborhood handyman. This is my situation in a nutshell.

Can I get sued if a bike I work on breaks down and causes a crash? For that matter, what about bikes I flip? Any potential liability there?
What do you home mechanics do? Buy insurance? Not worry/think about it?
Do yourself a favor and incorporate yourself as an LLC or similar and get the proper insurance, liability protection etc. As others have said, you're running a business so should be setup as one.
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Old 10-20-21, 10:42 AM
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Originally Posted by squirtdad View Post
Anybody can get sued for anything...
A key here is if you received renumeration for your service.

So the question is, are you setting up a business or a service? It is not that expensive to acquire liability insurance for services provided. And there are such things a Release of Liability and Hold Harmless forms that you can use. Many of the small engine (mower) repair mechanics in our Central Texas area use Hold Harmless forms.

My advice to you is to go to a local CPA not a lawyer. They have a vast knowledge of how things work in your area of Operation. They can also give you a good idea of what it will take at a minimum to protect your assets.

Being retired and setting up a personal small business that gives you enjoyment is priceless. The paper work, bills, taxes, and all are just part of it. Don't take shortcuts...
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Old 10-20-21, 11:03 AM
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Since you are officially advertising your services, you're dabbling in a more serious legal ring than just helping out friends. I have no experience in that particular field, so your best bet is to heed the advice of others here.

Now I have been working on cars/motorcycles/bicycles for many years now doing just about anything and everything. However, I only do work for friends and friends of friends, no advertising, just word of mouth. I've never had a serious issue with any of the work that I've done, though it doesn't mean it may happen some day in the future. All of my friends know I guarantee all of my work and if something goes wrong that I'll fix it free of charge. Thankfully have never had a problem which involved an injury. I do have high confidence in the work I do and anything I do on a friend's machine I wouldn't hesitate to do on my own machine. If I wouldn't feel confident or comfortable doing it on something I ride/drive, I won't do it for someone else. That is partly why I think I've yet to have a serious issue, also due to the low volume of work I do.
I've never had any sort of special or specific insurance since I'm not an actual business and I'm not doing much side work these days, but it is some food for thought for me at least.
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Old 10-20-21, 11:51 AM
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The answers have been clear, unanimous and unequivocal. My (haha) career as a "paid" mechanic just ended. Not worth the hassle to setup a proper business. And I don't need the money. It was just nice to be compensated directly for my labor, unlike flipping where the results are delayed, and uncertain, depending on how the sale goes. And selling can be a pain, dealing with flakes, negotiating over little things, cheap buyers, etc, etc. I know, because for the first time ever, I got serious about flipping when I realized the pandemic was bringing better prices.

So, to repeat my 2nd question, does flipping/selling bikes have similar liability issues?
Sure seems similar to me. I'm selling something as safe that I worked on. Maybe I need the equivalent of a "release of liability" form like the CA DMV.
edit: oops, re-reading, I see Zandoval already mentioned a "Hold Harmless" form.

Last edited by sunburst; 10-20-21 at 11:58 AM.
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Old 10-20-21, 12:12 PM
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Originally Posted by 2old View Post
A constant specter in litigious CA, but I've sold many bikes without a problem. Also, have helped friends repair their bikes, but that's probably less "dangerous". I wouldn't do it as a business though, and have never taken money except (obviously) for bikes that I've sold.
An interesting side conversation topic could be had related to selling your used bike and the inherent liability doing such.
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Old 10-20-21, 12:45 PM
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Sy, agreed and feel fortunate (so far) that hasn't happened. Also, wonder how long after the sale a viable claim can be made before the seller could counter that the damage came from the new owner. In any event, fighting the suit could be expensive. Definitely won't sell anything with carbon parts.
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Old 10-20-21, 12:57 PM
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With sales of a used product, can you just specify (potentially in writing in the ad) that the product is used and being sold "as-is"?
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Old 10-20-21, 01:00 PM
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Originally Posted by himespau View Post
With sales of a used product, can you just specify (potentially in writing in the ad) that the product is used and being sold "as-is"?
Maybe, or is it comparable to the coat checks at restaurants to the sign that says "not responsible for lost or stolen items.". which I think most people know really doesn't fully protect the restaurant?
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Old 10-20-21, 03:24 PM
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Originally Posted by Sy Reene View Post
An interesting side conversation topic could be had related to selling your used bike and the inherent liability doing such.
This is essentially my 2nd question about flipping. I have never considered liability for bikes I've sold, and I've sold dozens.
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Old 10-20-21, 03:34 PM
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Originally Posted by AJW2W11E View Post
Not to change the subject but I stripped my single speed down last weekend, redid the bearings, replaced the bottom bracket and repainted the handlebars, new brakes. New chain, chainring and freewheel.Disassembled and Cleaned everything with a toothbrush and alcohol.
Finished Sunday night.
Monday at lunchtime I was busting and excited about taking her for a ride, took it out on the driveway and started to mount her, but suddenly I remembered “ this 18 pound thing is going hurtle downhill next to cars at 35 mph” . That jolted and stunned me.
So I sat it on a bike stand and checked every one of the 20 odd bolts ... Everything okay.
Then I noticed my upside down chain.
That's nothing. I am such a horrible mechanic, I accidentally put mine on inside out.
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Old 10-20-21, 04:04 PM
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You fix Bob's bike, new brake pads for $25. Bob gets hit in an intersection, head injuries, long term care. Bob's health / car / whatever insurance company(s) are going after the driver. Their lawyers investigate the driver of the car, find they have no insurance, no assets, dead broke, $16,356 in credit card debt. Wife tells one of the lawyers, "Bob shouldn't have crashed, Sunburst just fixed his bike!". Uh oh, and you know the rest.
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Old 10-20-21, 05:38 PM
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My understanding is that the seller is responsible for the condition of the product at the time of the sale and for some term after as determined by the courts. Mere transfer of product from one's hands into another's hands, independent of any $ transferred, is a sale (just ask an old hippy or poor city kid about this one) I don't think the courts will see much difference between product and service, both are stuff the seller is generally presumed to be more knowledgeable then the customer.

I do see some wiggle room for the "good Samaritan" acts But advertising or charging for stuff pretty much eliminates that one. Andy
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Old 10-20-21, 06:26 PM
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Well setting up a small business in the United States of America with coverage for General Liability of services provided is not that big a deal. But then you live in California... Ha... That's another story...

Tinkering around and fixen stuff should not be this hard... Really...
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