Thread: Liability for small shops?

I suggest you look at the Victorian Woodworkers Assoc. insurance. Could be just what you need.

I thought so too, but the policy is VERY specific in it precludes childrens sit-on toys and chairs.

Speak to a good insurance broker. You will need liability cover if you are going commercial. Its a bloody risky business without.

As above get insurance
In my home handy man business it costs me about $600 a year I think for 20 million liability

You make it for a third party and they sell it on , they designed it .

1. Do they pay you, then sell it on at a profit?
2. Or do they stand back and let the end user pay you?

If 1. You would just have to point out to your client, it's weak points and suggest safer improvements with the relevant cost increases and have it

documented . I think it's their problem from that point on.



Edit , 9.08 pm I have been told I may be wrong with this , above . And I'm going back to watching the footy .



If no 2 , I think your sticking your neck out a little.

I don't think getting involved with insurance A holes is a good idea at all ,they are completely up to the top of their eyelids in BS .

Just offer the best quality and if people want to talk you down on price, write out that its a cheaper price but not as strong . I believe the ball is in your court with this .

Rob

It costs me $480 per year for $20,000,000 cover. Stand alone policy covering all timber products manufactured and sold by me. Retail or wholesale. Took a bit of shopping by my broker, but as usual, she came up with a good option. Combined policies often become a bit vague.

I've always been suspicious on the concept of insurance in general.

What I'd like to know is,,,,, how often do people attempt to sue others over small matters like this anyway.

I understand the fear develops when people hear of it it happen. But like all these situations people don't seem to take in account the population of occurrences. Info's not readily available.

You may have 1 in a trillion chance of this happening to you.

Unless you have to (like some retail requirement) I wouldn't worry about it. . But don't sue me if you take my advice and get sued when a kid falls and brakes his arm (is that possible ?)

Originally Posted by apricotripper

I've always been suspicious on the concept of insurance in general.

What I'd like to know is,,,,, how often do people attempt to sue others over small matters like this anyway.

I understand the fear develops when people hear of it it happen. But like all these situations people don't seem to take in account the population of occurrences. Info's not readily available.

You may have 1 in a trillion chance of this happening to you.

Unless you have to (like some retail requirement) I wouldn't worry about it. . But don't sue me if you take my advice and get sued when a kid falls and brakes his arm (is that possible ?)

I see your point. But when my wife started her cake decorating business she didn't think she needed this insurance. I said "look at people nowadays. You just need one a**hole to say he/she got sick after eating one of your cakes and we could lose our house". Unfortunately, there are opportunists out there ready to pounce on anything if they see an advantage to themselves out of it. The chance of it may be low, but it could have massive consequences.

Especially when in this instance we are taking about children, some parents can be very reactive - I guess somewhat naturally.

Originally Posted by Evanism

I'm making a few things now that are for kids toy stores. Chairs and tables specifically is my concern (the range is about 10 items)

While I'm reinforcing the absolute hell out of them (big dominoes, titebond3 and 5 long screws per corner), kids will be kids....if there is a flaw they will find it.

My fear is one of them is going to do something that isn't intended, crack a bone or worse and attempt to sue me.

I'm not a big manufactury, just a guy in a shed who makes good, high quality stuff.

It's being sold by a third party, so I make for them to their designs.

No doubt the legal angle is raised occasionally, but I want to ensure I don't end up in the poor house because helicopter-mum wants to sue over Little Precious' scratch.

Whats your advice? (this is maybe a grand or two, not a milti million dollar thing). I am not a company, just a bloke in a shed....

I know it will impact your bottom line ...

Doesn't matter if it's your design or someone else's, if you make something and sell it, you are liable for faults and consequent foreseeable injuries. Maybe not 100% liable, but liable nonetheless to some extent.
"foreseeable" is your only possible out -- but do you have the financial resources defend a claim?

take out insurance.

as rustynail said, the annual premium is not that much

Originally Posted by apricotripper

I've always been suspicious on the concept of insurance in general.

What I'd like to know is,,,,, how often do people attempt to sue others over small matters like this anyway.

I understand the fear develops when people hear of it it happen. But like all these situations people don't seem to take in account the population of occurrences. Info's not readily available.

You may have 1 in a trillion chance of this happening to you.

Unless you have to (like some retail requirement) I wouldn't worry about it. . But don't sue me if you take my advice and get sued when a kid falls and brakes his arm (is that possible ?)

It is quite difficult to determine actual actions against a small "manufacturer" or even the number of public liability claims against clubs for instance. Most public & product liability matters are settled out of court and often have confidentiality conditions imposed.

I researched the product & public liability aspect for the Townsville woodturning club when I was secretary for a time after the local council ran a risk mitigation seminar for local sporting clubs. As it was orientated towards sporting clubs the advice was mainly about avoiding injuries from buildings, plant and grounds maintenance issues. I found several court cases and claims quite easily so there is plenty of evidence to suggest there are many claims made and even some quite sucessful PL claims made through the courts. Some are sucessfull even though the plaintiff was quite negligent and significantly contributed to their own injury. They have to prove your negligence contributed to their injury or they can fish and make an ambit claim that is more expensive to defend than to pay up.

If you want further examples of product liability, public liability and workplace claims look up the Office of Fair Trading, Workplace Health and Safety prosecutions lists like http://www.deir.qld.gov.au/workplace...mary/index.htm or http://www.fairtrading.nsw.gov.au/ft...n_results.page etc for matters like "fail to comply with product safety standard" or "Sell unapproved electrical article" etc.

It's your decision to determine what assets you have, whether they are worth protecting and the level of risk that is acceptable to you.

Maybe there is a very good reason why there is an opportunity to fill a niche market that everyone else avoids and that the VWA's insurers are not to keen to underwrite.

If you want a good read have a look at http://www.claytonutz.com.au/docs/ACL_Dec_2010.pdf

Originally Posted by I_wanna_Shed

I see your point. But when my wife started her cake decorating business she didn't think she needed this insurance. I said "look at people nowadays. You just need one a**hole to say he/she got sick after eating one of your cakes and we could lose our house". Unfortunately, there are opportunists out there ready to pounce on anything if they see an advantage to themselves out of it. The chance of it may be low, but it could have massive consequences.

Especially when in this instance we are taking about children, some parents can be very reactive - I guess somewhat naturally.

Yes, I agree. But in my eyes its still all fear related, and not statistically related.

Your situation seems similar to mine. My partner (even though I dislike that word, but not allowed to call her my wife) is in the cooking business as well. And we juggle, just getting by.

So I wish you the best with it. Small businesses are hard. And even worse, its recommended to stay small, because it gets harder to get bigger.

Still wouldn't worry about it. If you fear this then, imo, you should be fearing the dozern other dangerous things in our life that we've normalised (but are far far far more likely to happen).

just an opinion. good luck.

Originally Posted by Mobyturns

It is quite difficult to determine actual actions against a small "manufacturer" or even the number of public liability claims against clubs for instance. Most public & product liability matters are settled out of court and often have confidentiality conditions imposed.

I researched the product & public liability aspect for the Townsville woodturning club when I was secretary for a time after the local council ran a risk mitigation seminar for local sporting clubs. As it was orientated towards sporting clubs the advice was mainly about avoiding injuries from buildings, plant and grounds maintenance issues. I found several court cases and claims quite easily so there is plenty of evidence to suggest there are many claims made and even some quite sucessful PL claims made through the courts. Some are sucessfull even though the plaintiff was quite negligent and significantly contributed to their own injury. They have to prove your negligence contributed to their injury or they can fish and make an ambit claim that is more expensive to defend than to pay up.

If you want further examples of product liability, public liability and workplace claims look up the Office of Fair Trading, Workplace Health and Safety prosecutions lists like http://www.deir.qld.gov.au/workplace...mary/index.htm or http://www.fairtrading.nsw.gov.au/ft...n_results.page etc for matters like "fail to comply with product safety standard" or "Sell unapproved electrical article" etc.

It's your decision to determine what assets you have, whether they are worth protecting and the level of risk that is acceptable to you.

Maybe there is a very good reason why there is an opportunity to fill a niche market that everyone else avoids and that the VWA's insurers are not to keen to underwrite.

If you want a good read have a look at http://www.claytonutz.com.au/docs/ACL_Dec_2010.pdf

Thanks. Do any of those links refer to odds of occurrences though. All one needs to know (just an opinion) is ……….

In the next 20 years or whatever, how often will I get sued for unforeseeable accidents like this? on average. maybe once ?

…. or as I would suspect, based on the worlds population it be something more like. 1 in every 50 000 woodworkers, each in a 20year career gets sued. uno what I mean.
And when he gets sued, what does he loose ? everything ?….

Good Morning Evanism

I am a retired accountant and I write this with a little experience in this area. In my opinion you have three options:

INSURANCE - The statistical probability of being sued is very low so these insurance premiums are correspondingly quite low. Make an appointment and go to a good insurance broker, not an insurance company, and ask them to advise you on your needs and to prepare a quote. {Ask other small businesses in your area for reference to a good broker - "Who's your broker?", "How good is he?"}

INCORPORATION - Get an accountant to register a company for you - "Evanism Woodwork Pty Ltd" - and then the company runs the business and gets sued, not you personally. This should cost, perhaps, $1,000 initially and $500 per year to comply with the red tape.

DO NOTHING - This is obviously the easiest and cheapest in the short run and the risk of being sued is very low. However, one event could be catostrophic. Loss of business, house, all assets, bankruptcy ...... and the emotional and family costs are far greater than the financial costs. Before one gets to court there is a negotiation phase, and lawyers actively use the threat of costs as a negotiation sledge hammer especially when dealing with "small" opponents. On several occasions I have witnessed a lawyer tell a client "We may bankrupt you before we get near the court." Big pressure.

My suggestion, is that you get quotes for options one and two, and then consider which is best for you.




Fair Winds

Graeme

Whilst $500 per year for insurance isn't a huge amount, for the small weekend woodworker who may make some small items throughout the year to sell at a market or two it is enough to make it unviable. If you are moving bigger ticket items you may have enough margin to absorb the costs but if you are selling small items with perhaps a $5 markup it would be necessary to move large volumes (not easy for a weekend woodworker).

Obviously you don't want to see unsafe items out on the market, but does having insurance stop this or just provide protection for the maker. Perhaps insurance should be linked to the risk which would be linked to the number of items entering the market.

It makes you wonder how anybody survived 100 years ago!