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Builders insurance.

Old 08-11-13, 02:11 PM
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snowscaper
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Builders insurance.

I also posted this in general discussion. But was wondering if anyone here knows of an insurance company that handles frame and wheel building insurance. I have been building wheels for my kids track bikes and now am getting some interest from other riders. Any help would be appriciated.
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Old 08-11-13, 06:49 PM
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Product liability? Have you asked your regular agent?
Depends on what state you live in. You might be able to get an umbrella policy if the business is just incidental.
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Old 08-11-13, 08:46 PM
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I have just gone through this with my ins. agent. He advised that if I do any repairs (and this covers a wide range of service and products) independent of the transfer of money, it could be decided that I was in business. Then any personal umbrella policies would not be applicable, as they don't cover business issues. To have true business insurance will require that you actually are a business. Filing with the state, local government departments, establishing income tax records. The IRS has it's rules about operating a business of course.

Remember that while most people who seek insurance feel that it is to protect their assists. The person who has been wronged by your actions will feel that it to "make them good". The only way to avoid financial responsibility is to have no assets.

I ask that you rethink the situation, your responsibilities and your conscience. And talk to a lawyer. Andy.
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Old 08-12-13, 06:26 AM
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Have a glance through this thread. A lot of good info.
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Old 08-12-13, 06:13 PM
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any agent can write a policy that is underwritten by NIPC. They insure many local bike shops and it is the only insurance available to framebuilders that I am aware of.
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Old 08-20-13, 07:14 PM
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I have a 3 million dollar umbrella. I have been building wheels for a hobby for 20+ years selling some and custom re-building and general wheel truing and repair. My agent of 30+ said---STOP -Cease and desist-NOW! It is a bottomless pit, WE will not cover you from this day forward if you touch one more wheel that is not your own!
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Old 08-22-13, 08:56 PM
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That sounds about right. As a business decision, you have to assume one fairly likely outcome of a claim is that they will not pay off. Paying off is a business decision for insurance companies, not an opportunity to earn a merit badge. As a business decision, some payments are good for generating business and goodwill, others are covered by regulations, and many big payouts are going to be bad business, and will end up being litigated.

As such you are always self-insuring to some degree. For some people that is an acceptable business risk as the cost benefit decision is in their favour. That is very rarely the case for individuals with assets or principle income in some other field.
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Old 08-27-13, 08:39 PM
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Thank you for all the information. It sure is eye opening and a dam shame that we have to live in such a sue crazy nation. I just want to be able to build affordable wheels for juniors at our local track but cant take a chance on loosing my house over it.
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Old 08-29-13, 03:29 PM
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Short of an insurance policy, how about a legal waiver/release of liability? You could require any prospective purchaser of your wheels to sign a waiver releasing you from any liability. You may also provide information on how to maintain a wheelset (truing, checking tension, inspecting for damage, etc.). Any such form should be vetted by an attorney, but it may mitigate your risk chance of being sued without having to carry insurance. I'm not a high volume bike flipper (I sell a half dozen or so refurbished bikes a year), but I've considered creating such a form for bikes I may sell on Craigslist.
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Old 08-29-13, 04:17 PM
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my understanding is that waivers are not worth the paper they are written on. If someone is injured, then you are at the mercy of their family and even their medical insurance. And it doesn't have to be your fault either. It has always seemed to me that this is a real problem for a framebuilder, maybe not so much for a wheelbuilder.
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Old 09-01-13, 12:15 PM
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Lawyers seem to like waivers, but not because they will save you. I kinda forget why they suggest it. But while it won't absolve you, it doesn't seem to hurt anything. Same business decision.
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Old 09-02-13, 12:58 PM
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The moral issue here is if you do do something wrong will you "make up" for it? The methods to avoid the hit or attempts to transfer the liability are only passing the blame. When (repeat "when") our legal system works it stops this avoidance game. Proper insurance is for the wronged, not for the framebuilder who made an error. Professional builders work the cost of insurance into their business. Andy.
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Old 09-06-13, 10:35 AM
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The reason I didn't go to law school was because it's way easier to pay someone who did $400 for an answer. But that answer will be incorporating. Then you can have a real business. With insurance. And you can hire an accountant. And they'll tell you that the insurance premium at a unit cost, which will be a part of your sales price.

Unless this is your life's goal, or you have cash and time, just make some frames for friends and tell them if they die it's because you weren't the best of welders, say la vee.
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Old 10-27-13, 01:43 AM
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What a shame

Originally Posted by snowscaper View Post
Thank you for all the information. It sure is eye opening and a dam shame that we have to live in such a sue crazy nation. I just want to be able to build affordable wheels for juniors at our local track but cant take a chance on loosing my house over it.

Yeah, what a damn shame that you can't build wheels, get paid for it, and then face no repercussions if your product fails and somebody gets injured. If you don't want to be treated like a business, don't operate a business; if you want to operate a business do it professionally, provide a chance for people to,receive indemnity, and pay your taxes.
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Old 10-29-13, 10:18 AM
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That isn't what happens. Building wheels is a no brainer. What happens is you build a great wheel that gets used exactly as intended and a flower pot falls off a ledge and hits the guy on his head, he flies into a mailbox, and bends your wheel. He incurs massive medical costs, and short of being thrown out of his home, his lawyer sues a variety of people from USPS to the component company to you. Eventually you get dropped, but not before you spent the college fund on legal stuff that never gets used.

Or you build a great wheel, and some guy uses it out of it's range. I mean, every time I build a belay one a rock climb I am taking a far larger risk than any wheel I ever built, but for whatever reason, I never had to worry about being sued, at the time.

The minute you take money it changes the equation, while in a lot of cases you are dealing with the best builders out there, and they aren't making any money off it. So yeah, I agree, you have to behave like a business, but the part of that that sticks, isn't usually the crap about quality. The facts are that most small makers are attempting higher quality, but can't capture enough of the market to make the risks sensible. The guys who can make it pay, are essentially high quality small shops that can take the risk of being wiped out, or big makers that dumb down quality of performance to reasonable levels (not a bad idea, but you know...).

It isn't between bad quality and professional ethics, it is bad health care delivery and a rampant tort system.
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Old 11-02-13, 04:03 PM
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Originally Posted by MassiveD View Post
...... it is bad health care delivery and a rampant tort system.
Yep. Brian
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Old 11-04-13, 01:25 AM
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Originally Posted by Andrew R Stewart View Post
Professional builders work the cost of insurance into their business. Andy.
I was looking at some of the new answers, but this caught my eye. My feeling about the builders insurance that is on offer is that it sorta falls into the home business or craft coverage where they are probably thinking someone might slip coming into the shop, or get grease on their suit. If we are talking about moral and businesslike, I wonder what the insurers would say if they really knew the skinny on what we thought they were covering. If they knew that there weren't any industry standards, or qualifications. If they knew most people were self taught. If they realized the kind of accidents that could happen in a catastrophic failure. If they realized the operating environment was unlimited (not just on road use). If they realized builders were making add hoc adjustments to frames, with no engineering. If they knew the whole specialty was built on archaic practices that were superseded by the manufacturers years ago. I'm just throwing that out, but there is a list that should scare them that could be worked up. If they really knew what they were insuring I doubt very much it would be a cost that builders could easily absorb.

Insurance is a contract, and few people ever read the policy. There is probably something in there to cover them if something unusual happens that is out of their comfort zone. I know I have run into that time and again. It turns out you are covered, just not for the thing in question. Like maybe not covered for anything that does not happen on the premises. You would be appalled how bald some of the exceptions are. Of course they may chose to pay in any case, so as not to rock the boat, if it's a few hundred dollars.
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