Liability Insurance/ Mobile guys

[imported_rookie]

My mobile business is up and running, and I have a question. I started out with fliers and such, have been getting some consistent work, but need to think about a corporation and insurance to protect myself.



I can become an LLC, and essentially that will protect my personal assets, but do I really have to get liability insurance right now?



Has anyone ever had to use their liability insurance? I am thinking if something goes wrong I could always just pay for or repair whatever it is, opposed to getting an expensive insurance policy?

[imported_garyo]

If you have personal assets worth protecting I would not rely on an entity to protect them solely. Discuss this with a qualified attorney. There is a concept in the law called “piercing the corporate veil� that allows a plaintiff to go after the business owner personally. It is a complicated concept and the success rate is varied depending on many unique circumstances, which makes it very difficult to discuss in a forum like this. Just be aware of the concept. Liability Insurance is “brick� in the wall of your asset protection just like the entity is another “brick�. Neither is the wall itself but together with other concepts they form the wall you are attempting to build.



Another related thought. Check with an qualified accountant and/or tax professional to determine whether or not the LLC is the best entity for you. An s-corporation may be a better tax entity for you because of some self-employment tax issues related to a service oriented business. Now you can always use the check the box rules to elect to have the LLC taxed as a corporation and then make the S election, but some prefer to just organize as S-corp initially. Just some food for thought.

[NorthPac]

No one wants to use liability insurance if they do it means in the thousands of dollars. there is a deductible of $$$$$. Having liability insurance protects you specially if you own property. Most companys require insurance. ok say something big happens if you don`t have insurance, you lost you buz! you can be sued, do you own property, your credit is at risk too.



If the buz owner has real estate property, the buz owner can make more $$$$$ then the buz owner who does not own real estate. That is specially so then there is high liability involved.

Anyone can say they have insurance with papers to prove it but to make sure the insurance is always good is other thing.

If you have liability insurance and you own real estate property means you are responsible in the business sense of today buz. that is how America is today! small buz`s can not stand a chance compared to big buz`s.

Sorry I ran my mouth in my own opinion I said more then you requested.

If you drive the costomer cars your car insurance might cover it if you while you are driving?????

[imported_rookie]

thanks guys.



I am mostly talking about protecting myself. If I mess up on a car, and discolor leather, etc.... Doubt it will happen, but that or some other freak thing that could happen to a car while working on it is what I am talking about.



That is what I need to protect against? I am trying to get in contact with an insurance agent, but I want to have somewhat of a clue what he is talking about.



thanks.

[imported_garyo]

Chances are you would not use your liability insurance to cover discoloring a leather seat. It is more beneficial to protect you against the unlikely disasters, or as you said freak accidents. For example say you are working on a car at someone’s house working with a PC or rotary. Somehow the pad and/or the backing plate flies off the machine when at full speed and goes through a window and crashes into a $50k piece of artwork destroying it, or worst yet hits someone in the head, triggering a tragic death. Far fetched examples I know, but the scenario’s are endless and things like this do happen. This is where your liability insurance steps in.



You really need to sit down with your insurance agent and discuss your particular situation and consider the insurance you already have in place. There are potential solutions and pitfalls with your existing insurance. Homeowners/renters insurance usually has a personal liability insurance component (which the limits can be changed relatively inexpensively), the question is would it cover you while doing a job? A personal umbrella policy may also work (then it may not). Also your car insurance. While operating your vehicle and/or another vehicle during your capacity as a detailer (work) may be an exclusion in your policy and may not offer you any coverage. There may be no solution and/or problems or exclusions with your current insurance but it would be worth the time to verify. Discounts can also be obtained when you have more than one type of policy through the same company.

[Scottwax]

I`ve never had to use my liability insurance so far but that may change if I ever start using a rotary. I do find myself being extra careful with my PC so the pads don`t fly off and the backing plate gouges the paint or scratches the glass.



Make sure whatever insurance you get, it also covers stuff like someone tripping over a cord, slipping in water, etc. That can cost you a lot more than repainting a fender.



I`ve stayed a sole proprietor but if I ever permanently add employees, I`ll probably switch to a subchapter S since it is much more likely an employee will screw up and damage something than me...at least I hope so!