MustI have liability insurance if I’m planning to start a small welding business?

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MustI have liability insurance if I’m planning to start a small welding business?

I’m planning to start a small welding business on the weekends welding things such as ATV loading ramps. Since these ramps can potentially hurt somebody or somebody’s property, can they sue me if when purchased I make aware through waivers that I am not responsible for such incidents?

Asked on October 25, 2011 under Personal Injury, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The law does not require you to have this insurance--but you *really* want to.

The problem is, waivers like the ones you describe are only partially effective. While you can disclaim liability which results from the normal use of properly functioning ramps (e.g the risk you lose your grip on the ATV and it rolls over and breaks your foot), you cannot in a situation like this disclaim your liabilty from improper construction or design--so if a ramp, for example, has a bad weld and breaks for that reason, injuring a person or property, you can't insulate yourself from liability.

Business commercial insurance is fairly inexpensive--for example, I also work for a small publishing company which has several dozen pallets of inventory in a warehouse and six-figure annual gross sales, and the total annual business commerical insurance, including liability, inventory, and an umbrella policy, is only $1,700 or so a year. So if you just need liabilty only, for a business that might do several thousand dollars in sales per year, it would be presumably significantly less than that--and is deductible as a business expense.

If your business won't sustain the cost of the insurance, then you need to ask yourself is it worthwhile to have the business--after all, would it be worth it to potentially incur tens of thousands of dollars of uninsured liability for the amount of money you hope to make?


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