Business insurance

[mxtras]

For those whom own their own business, what insight can you offer regarding insurance for a leasee?

I am preparing to move into leased space so I am looking into insurance. I am a small shop with less than $100K in equipment, materials, etc. It will be me and a partner running the show and making the mess.

I am looking at general liability and property insurance - the state I am in (confusion) has no requirements for renters to carry their own insurance.

I am worried that if someone breaks in and wipes me out - how will I recover? It has taken me 4 years to aquire my toys and I need them to move forward.

Any input would be appreciated. Suggestions?

Scott

[ViperTX]

Well hopefully you have a partnership agreement that indemnifies each of you in case of some catastropic breach of contract, etc....also you should have a clause indicating what will happen if one partner wants out/or dies/or is incapaciated....then what you want to insure is the contents of the building, the work in progress and have some liability insurance to cover the "I slipped on your greasy floor and fell into to you mill...." or perhaps to cover things like water damage, fire, etc. I would definitely look at shoring up all entrances....bars, etc.

Then you may be forced to face the reality that you may not be able to afford all that coverage....then you prioritize your real need/concerns.

Contact a small business insurer or a group of business that insure through some insurance pool....start with the Small Business Admin....talk to other small business owners in the area....

[Bubba]

mxtras,
First off, find an insurance agent that YOU TRUST and that will work with and for you to find the best market(s) for the various coverages that you will need. Discuss various deductible levels etc.
We recently had our policies come up for renewal and had several agents quoting. You would be surprised at the differences in the rates that each one came up with and some were quoting the same insurance company!
Please be sitting down when they quote you because after 9/11 and the hurricanes last year, all the rates have been steadly increasing.
Good luck in your new venture.

[mxtras]

mxtras,
First off, find an insurance agent that YOU TRUST ....

That's like finding a trustworthy used car salesman, isn't it? I don't trust any of 'em!!! I do not think they are really out to care for YOUR best interests. Disagree?

If you have a guy you would trust, hook me up. He doesn't have to be in my area to get me as a customer.

You have good points about shopping around, bubba. Thanks.

Viper -

The partnership thing has been wrapped up for the last 4 years - everything you mentioned and other potential issues are covered - had a good attorney in my pocket for such matters....and my father...and my brother (both extremely qualified to comment). As usual, you speak reality - very good points.

As far as the water and fire damage thing - if I am leasing and his (the owner of the building) roof fails, for example - is my insurance responsible or his? If he catches his side on fire and ruins mine - who pays?

What if his insurance company and mine are the same...oooh...that's tricky, huh?

I have done the initial shopping and question fielding and I am moving on to the quote request phase now. Just wanted to get whatever input you guys might have - you were one I wanted to hear from, Viper - you and DieGuy and there are a few others, but I can't recall who they are at the moment...brain is overloaded right now.

I am waiting for DieGuy - where are you - did you get this far with your deal?

Anybody else? I need all the insight I can get! Thanks, guys.

Scott

[ViperTX]

Generally the building owner is responsible for the building, but the contents are your responsibility.

[Bubba]

As for an agent, they have to be liscensed to operate in your area! Threre are several (used to be more, but they have merged) national firms. I can't honestly recommend a darn one of them to you! My personal opinion is that you would want to use somebody local that you "can go beat on his head" if necessary. Also, you will not be a number. As I worked in the insurance industry for nearly 35 years, I can agree with you most emphatically. Finding an insurance agent, car mechanic, doctor etc that is willing to work in YOUR best interest is a crap shoot at best. IF you find one, hang on to him.

As for the coverages you mention, a lot will depend on your lease. Many times it will be in the lease that it is YOUR responsibility. Again, refer this to your lawyer friend that you trust.

[DieGuy]

I am looking at leasing a place right now but he costs for insurance and such are still putting me off, I have 1000sq ft foundation poured in my backyard but think if I get really going the HOA and the city are going to come down hard on me.

I might play a game and convert my 401K to a self directed IRA and purchase an 3K sq ft light industrial condo for around 300K. This is a bit on the fishy side but I am told that it will work if I transfer rent payments regularly to the IRA.

[ViperTX]

DieGuy,

I like the idea of a "light industrial condo"....I'm assuming that you can habitate the place....ya know live in it? Will the zoning for the area allow you to run a machine shop from such a location?

[DieGuy]

DieGuy,

I like the idea of a "light industrial condo"....I'm assuming that you can habitate the place....ya know live in it? Will the zoning for the area allow you to run a machine shop from such a location?

Well the CIty has yet to final zone the condos, I checked the zoning maps on line but it shows AG. and I am still trying to find out about the code restrictions. And no you can't habitate the place. Strictly a business venture, but with the way real estate prices are going here (you would think this is California) it would be a good investment.