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Liability/Insurance question

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  • Liability/Insurance question

    Curious on what you guys carry for insurance for welding on vehicles for either street/strip?

    Im looking at liability insurance, but am wondering if I would also need to carry a manufacturing policy?

    Items I plan on welding mostly are step notches, crossmembers, and roll cages.

    But before I do I want my but covered.


  • #2
    Besides liability you need to have "product performance liability" as well.
    I am sure others here will chime in with much more detailed and informative explanations than me.


    • #3
      Good Luck- the premium alone will probably knock you off yer feet.


      • #4
        Thats what im tryin to figure out, cost/benefit. And how much to charge to cover my costs. I have about 6 people who want 4 point roll cages fabbed to comply with local track requirments. But Im not going to if it is going to cost me to much. Is there any waiver of liability if they are built to SCCA spec? I dont know how much a waiver actually waives liability. But the insurance companies here dont know anything outside of oilfield.


        • #5
          I have Farm Bureau liability insurance witch only covers me while I'm on site working. Once I leave I am not covered. For the liability plus 10k in equipment coverage its 35.00 a month.

          I have looked into insurance for items such as you described. I was told I needed "Finish Product" insurance, witch varies from 4k-20k depending on the product. That is just what I was told, I did not pursue anymore info on it.


          • #6
            The problem is yer just not big enough for an Insurance company to look at you unless you manufacture quite a bit of the product.

            Your General Liability probably covers you somewhat.

            You can Incorporate- offers some protection.

            Also, you are the Fabricator so assuming you know how to do these cages then you probably don't have anything to worry about-


            • #7
              Im not worried about my product, Im worried about people thinking cages make them bullet proof and decide to sue if they are injured when they are inverted and suffer whiplash and blame it on my product not doing what they assumed it would after the fact. I got laid off from building 55' trailers and I know the insurance wasnt cheap, and any time a trailer was involved in an accident, we were automatically sued and had to go through legal proceedings to show we wernt't at fault, but the legal fees for something like that would sink me, but now I'm on my own I want to be protected.


              • #8
                I wouldn't lose sleep over it *, some one could sue you just for bumping their head getting in the vehicle before the race.

                Google some Product Liability Insurance brokers and give them a call- may find some one to chat over the phone about your concerns.

                * again, assuming you have General Liability for your welding Biz.


                • #9
                  I don't have a "biz" as of yet, not untill I get some things figured out. But iIam nervous of going into automotive fabrication for people other than myself, but there is a lot of interest latley so its a market I wouldn't mind getting into outside of my own.


                  • #10
                    I do quite a bit of automotive, and don't worry too much about product liability. Typically, there will be some other extenuating circumstance which will cause your product to fail (the big crash they got in).

                    Unless your product can be proven to be responsible for creating the incident, and/or you can be proven negligent in manufacturing such product as to knowingly let something unsafe into the world, there's not much that can come back and bite you.

                    Most of us are probably too "poor" to sue anyway. The lawyers won't take the case for the opposing side if there's no payout for them.


                    • #11
                      Originally posted by Fishy Jim View Post
                      .................................. and don't worry too much about product liability......................................... .......

                      Most of us are probably too "poor" to sue anyway. The lawyers won't take the case for the opposing side if there's no payout for them.
                      Even tho this is the worst advise in the world... it is very true in most cases. Unless it was truly a criminal thing how poorly the work was done and they just wanna take you for everything you have and get all they can... like when a death is involved or someone is crippled for life.
                      If you have all the right equipment to do this type of work then fine.
                      If not, then actually you are not only yanking our chain but your own as well.
                      If you don't even have a "biz" then I am here to tell you that building cages will merely be a fleeting moment in the grand scope of being a welding business. It is just "sizzle". You don't want to expect to base your lifestyle on this, so don't let it enter into your thinking unless you have been working for a PRO cage builder and are now breaking out on your own.
                      The money for those types of projects dries up overnight quite frequently.
                      I build cages/headers when I can and the money is there, but I never make it a priority because there normally isn't enuff of that to feed the family if you know what I mean. Way too many hours for the money that it brings unless you are working for known "pros"....and if you were we wouldn't be having this discussion.
                      If you was me, you would build things of that nature (cages, fuel tanks etc..) for cash only with no receipts and I also have a very bad@$$ brother in law I threaten them with as well
                      You should maybe sponsor one to test the water first. If you aren't willing to do that then chances are you wouldn't care much for it anyway.
                      Most everyone I sponsored..... I pretty much was able to remember what a looser way to make money racing is. And I have thirty years of that now.
             can pretty much get sued for making ANYTHING on a car that modifies it from stock when you really think about it.
                      Last edited by FusionKing; 11-25-2009, 06:30 AM.


                      • #12
                        Thanks for the advice, I never thought of the cash-no-paper trail approach. As grubby as that seems its probablly the safest. I do have the equipment/exeprience to do it, that isn't the problem, nor will my biz be based solely on motorsports, in fact most of my business is based on agricultural and trailer fabrication/repair, but with the opening of a local race track and the fact that sanctioned mud racing events around here are becoming popular, it is a part of the market noone has touched around here as of yet. So if I can add this line of work to my existing business it would possibly mean more money and something I am more interested in than rebuilding disc harrows. I just want to cover myself, as I know insurance for this kind of fabrication is, just like well head/hot tie in insurance, a seperate policy on top of liability. If something of mine does fail on a harrow its not a big deal, however I get a call for a guy who put his car into a guardrail at 100mph, thats a different issue. Everyone nowadays looks for a scapegoat and to pass liability, I just want to know that at the end of the day I can still go to my house which isnt repoed for lawyer defense fees. (Yes I know incorperating can prevent this)

                        I am a person who prepares for the worst, I also work with police and lawyers quite often so I know what people are capable of it they dont want to accept responsibility for their own actions. EG: a guy buys a mountain bike with a sticker on the bike that is clear coated over that says ride with a helmet and use a light at night, then runs into the back of a parked jeep and sues for the dealer not verbally telling him those warning, (yes he was literate) and his wife also sued on top for not being ***ually satisfied while he was in the cast. She got 250k, last I heard he was in the millions.


                        • #13
                          I wasn't saying that not having insurance was the way to go, just that I don't worry too much about product liability. I still have insurance.

                          It won't do me or anyone else a darn bit of good in the event of negligence, because they won't pay if you're letting dangerous stuff go out the door. That's all I'm saying.


                          • #14
                            Originally posted by Fishy Jim View Post
                            Unless your product can be proven to be responsible for creating the incident, and/or you can be proven negligent in manufacturing such product as to knowingly let something unsafe into the world, there's not much that can come back and bite you.
                            The burden of proof in civil cases is "a preponderance of the evidence," or in other words, can a jury of schmucks with absolutely no understanding of mechanics be convinced (or confused) that there is more than a 50% chance that the plaintiff is right.

                            Originally posted by Fishy Jim View Post
                            Most of us are probably too "poor" to sue anyway. The lawyers won't take the case for the opposing side if there's no payout for them.
                            The term most commonly used in legal circles for this is "Judgment Proof." But the only people who are judgement proof are the disabled, welfare dependants, and the permanently unemployable, without any assets (or at least without any assets that are not protected).

                            If you have a car, property, 401k, bank account, or any other tangible assets, or plan on ever being employed in your lifetime, you are NOT judgment proof.

                            I repeat because this is important...

                            If you have a car, property, 401k, bank account, or any other tangible assets, or plan on ever being employed in your lifetime, you are NOT judgment proof.

                            I can assure you that there is a lawyer somewhere willing to take the case against you no matter how un-wealthy you think you are. And if the court finds for the plaintiff, it will look into every dime you own, will ever own, and can garnish future wages as well.

                            A judgment against a healthy young entrepreneur is guaranteed money in the bank. It's like an annuity. Don't think for a second that nobody will take the case because they can't get the lump sum tomorrow, especially in hard times like these when deep pockets are harder to come by.


                            • #15
                              Remember, a court case, whether you are in the right or in the wrong, is gonna cost you money. You still have to pay the lawyer, the expert witnesses, etc.

                              My commercial insurance policy (which I pay plenty for), covers two commercial trucks (unable to cover on personal insurance policy), inland marine, which covers personal business property, and whatever customer's property entrusted to me), general liability (which covers me for anything stupid I might do, either here or on a customer's location), and completed operations and products. Both the general liability, and the completed operations, are important. As long as I don't do anything specifically excluded (read the fine print), I am covered, this is a contract. About the only thing excluded in my policy, is nuclear power plants, I'm fine with that, no wish to do it anyway.

                              I have always, had a thing about insurance. You buy it for two reasons. One, to protect yourself, your own personal assets, your house, your personal property, your bank account, your 401k. ALSO, being in business, you have a responsibility, to "make right" anybody you could have harmed, through your activities. Not getting into the debate about frivolous lawsuits here,,,,, but if you weld a trailer hitch that breaks, you are morally responsible if not legally responsible, whatever LLC's or corporations you choose to hide behind, for the poor soccer mom and kids killed or severely injured, because of your inadequate work.

                              And doing "cash work", isn't completely valid,,,, unless, of course, you have means to eliminate all the witnesses .....


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