business insurance

[mdred68]

Im starting a small machine shop in my garage. Is it necessary to get business insurance? If so why? Thanks for the help.

[chief]

If you can't answer the question yourself maybe you should re-evaluate being in business.

[wbleeker]

At least public and product liability, suit yourself about personal cover for loss of earnings if you injure yourself. We spend around 20000.00 a year in various insurances and have had the odd claim or two, one was a payout of 75,000.00 for a shed that collapsed under a snowfall (we don't get snow! normally) my take on it is, if you can afford it, get it! and sometimes if you can't afford it get it anyway!
Will

[Evan]

It depends where you are located. I would make some discreet enquiries first. You may find that running a machine shop in an attached garage is cause to cancel your home insurance. I would strongly recommend that you get a quote for house insurance from an unrelated insurance company including the information that you will be running a machine shop business in your garage. You may find that the cost will be prohibitive or that home insurance will not even be available at any price.

[oldtiffie]

This is the original post (OP)

Im starting a small machine shop in my garage. Is it necessary to get business insurance? If so why? Thanks for the help.

I don't see anything that says the OP is starting a commercial or "for payment/reward" shop at all.

Unless the OP says otherwise, I'd expect that he means a hobby shop for his own use and enjoyment.

Our Insurance company here in OZ is quite happy about that and the shop is included in/under the House and Contents policy - which has a big Public Liability cover in it as well.

When I was running a business (Building Design) from home I had to have the business insurances as well as Will Leeker says. I always had ample cover.

As Will says, its not a matter of whether you can afford the insurances etc. but more a matter of whether you can afford not to. Insurance is one of those things you pay for hoping that you will never need or use it - but its sure a relief when it is needed and it "kicks in".

If the shop is "commercial", I'd be more concerned to see that is was a "complying" activity under the local Planning Scheme.

I'd see too that no one had cause to complain that the activities in the shop constitute a detriment to the "general amenity of the area" by "others".

We are on a 1 1/2 acre (~0.50 Hectare (HA)) with 14 abutting neighbouring small domestic dwelling properties and we never get any complaints.

[Evan]

I don't see anything that says the OP is starting a commercial or "for payment/reward" shop at all.

The words "business insurance" are a dead giveaway.

The problem with a machine shop is that it will be classified as "Light Industrial".

[Carld]

Having looked into this extensively there are few if any insurance companies that will insure a business in a residential zone. It don't matter if the garage is attached or not, it's residential. Ignoring all the issues of business license and taxes your best just doing what you want to do and not telling anyone especially neighbors.

What is it your looking for, liability insurance, equipment insurance?

[spkrman15]

I have liability insurance. I am a freelance millwright however. I work maybe 5-10 hours a week in my garage. The rest of the time is spent in various shops.

When i did look into insurance, it was a mess. I have 2 different insurance companies. They both said it was not worth insuring my tools. The cost would outway the replacement cost of the tools. UGH.

I do get hasled for loss of work insurance and it is expensive as well.

Defenately get the liability insurance. Protect you and your family

Rob

[oldtiffie]

I don't see anything that says the OP is starting a commercial or "for payment/reward" shop at all.

The words "business insurance" are a dead giveaway.

The problem with a machine shop is that it will be classified as "Light Industrial".

That's stretching it Evan.

My guess is that pretty well most of us have a "Machine shop" and not all are "commercial" but are "hobby".

Plumbers, Painters, Carpenters and Electricians as well as most "Trades" and "Tradies" can operate from home in many areas here - depending upon local Planning Schemes and caveats on land etc. None who are "compliant' seem to have any difficulty getting the appropriate or required insurance and indemnity covers for those activities. Once the "business" gets above a specified size etc. it is "required" to "move out" to an appropriate (specified) "Industrial Area/Zone".

It all seems to work well enough.

To reduce speculation, I'd like to see the OP clarify what he thinks he needs or wants for what he intends to do in his "Machine Shop".

[Evan]

That's stretching it Evan.

Speak for you own jurisdiction. That's why I asked where he is located. Here it WILL be considered light industrial, as it will in most jurisdictions.

I strongly expect the law will be very similar in your area too as it derives from the same law as ours. It wouldn't surprise me if much of the wording is identical.

It will be classed as light industrial in Canada.