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  • business insurance

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

  • #2
    If you can't answer the question yourself maybe you should re-evaluate being in business.
    Non, je ne regrette rien.

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    • #3
      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

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      • #4
        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.
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        • #5
          (Re?)butting

          This is the original post (OP)

          Originally posted by mdred68
          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.

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          • #6
            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".
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            • #7
              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?
              It's only ink and paper

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              • #8
                I have insurance

                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

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                • #9
                  Insured - or assured??

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

                  Comment


                  • #10
                    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.



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                    • #11
                      Classes of land

                      Evan.

                      Please post the defintions and approved uses in all "classes" of land - or if (too) big, a link may suffice.

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                      • #12
                        http://www.bcassessment.bc.ca/proces...ness_Final.pdf

                        http://www.bclaws.ca/Recon/document/...t/96250_00.htm

                        http://www.bcassessment.ca/process/p...s/glossary.asp
                        Last edited by Evan; 11-05-2009, 12:22 PM.
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                        • #13
                          Tiff, in most if not all states, counties and cities in the USA that have zoning laws they will also have residential, business and industrial zones and if you don't know it then let me tell you that ALL machine shops are zoned light industrial at the least. There are no exceptions period unless you lie about what your doing.

                          If you say anything about running a machine shop or auto garage at your residence to your insurance company they may send you a cancellation of policy notice to you shortly.

                          Fortunately my contact at my insurance company is not vindictive and did nothing of the sort, in fact she gave me several names and companies to call. She also said it would be difficult to impossible to get machine shop business insurance on residential property. In fact I could get it by deeding off an acre from my 6.8 acres and having it zoned industrial but the zoning law requires a minimum of 10 acres to zone light industrial and the surrounding land owners have a voice in the issue. Guess who will loose that fight even if I had the 10 acres to apply for industrial zoning.

                          Yes, there are several types of businesses that can use their residence as a base for their business but machine shops and auto repair are not included, PERIOD with no exceptions.

                          Now, if you live in an area with NO ZONING LAWS then you may get by with running a machine shop legally with license at your residence but DON'T try to get insurance for that business.
                          Last edited by Carld; 11-05-2009, 02:06 PM.
                          It's only ink and paper

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                          • #14
                            Rools - maw bluddie rools

                            Originally posted by Carld
                            Tiff, in most if not all states, counties and cities in the USA that have zoning laws they will also have residential, business and industrial zones and if you don't know it then let me tell you that ALL machine shops are zoned light industrial at the least. There are no exceptions period unless you lie about what your doing.
                            Same here Carl - if you are running it as a commercial enterprise. Not a problem in most/many cases if the "shop" is for hobby purposes with no commercial component/s. A "wood" shop is a machine shop as well and would (sorry) have similar restrictions. Same applies to someone making or "doing up" go-carts and the like.

                            If you say anything about running a machine shop or auto garage at your residence to your insurance company they may send you a cancellation of policy notice to you shortly.
                            Same again - if it is "commercial".

                            Fortunately my contact at my insurance company is not vindictive and did nothing of the sort, in fact she gave me several names and companies to call. She also said it would be difficult to impossible to get machine shop business insurance on residential property. In fact I could get it by deeding off an acre from my 6.8 acres and having it zoned industrial but the zoning law requires a minimum of 10 acres to zone light industrial and the surrounding land owners have a voice in the issue. Guess who will loose that fight even if I had the 10 acres to apply for industrial zoning.
                            Same again - but I note your inclusion of "business" (which I would assume includes "commercial"). As the OP did not say that he was starting a "commercial" shop, I have assumed that, like many of us here, that it is a "private/hobby" shop. I am still awaiting advice from the OP in that regard to my previous question asking for such advice. If he intends to open/use his shop for commercial purposes then all bets are off as he would be a "non-compliant use" in a residential zoned area - same as here.

                            Yes, there are several types of businesses that can use their residence as a base for their business but machine shops and auto repair are not included, PERIOD with no exceptions.
                            As previously for a non-complying "business" that operates a commercial enterprise.

                            Now, if you live in an area with NO ZONING LAWS then you may get by with running a machine shop legally with license at your residence but DON'T try to get insurance for that business.
                            There are no un-zoned areas here either as a "default" Planning Scheme with zonings will apply unless and until a formal district plan and zonings are approved by the State Government.

                            I would be the first to say that some Councils are more or less "vigorous" and/or "vigilant" than others in the ways they interpret and apply similar requirements under similar "Plans" in different Council areas.

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                            • #15
                              Still the same as here.

                              Thanks Evan.

                              Very similar to here as regards intent.

                              Unless the OP advises otherwise, I am still regarding his intended "shop" as a "private/hobby" non-commercial shop in and ancillary to a residential zoning.

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