# Sharing shop and insurance



## Blisswoodshop (Apr 27, 2011)

I have an opportunity to share a shop with some one whom I have known for a few months. However, I would have to setup a business entity and have insurance for myself. I can also work on his stuff to offset the expense. The shop is setup with all necessary equipments (cabinet shop) expect a spray booth. Setting up an entity is in my horizon. But I do not know the cost of insurance and risks and what to look out for on an offer like this. This is in NY and what ever points and advise is greatly appreciated.


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## JAAune (Jan 22, 2012)

Any reason you have not contacted a commercial insurance agent yet? Commercial policies are specially tailored towards the needs of individual businesses. My company's policy has various exclusions and riders that were added to eliminate unnecessary costs and provide coverage for things we really needed.


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## BillWhite (Jul 23, 2007)

Who and what are you supposed to insure?
Bill


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## Blisswoodshop (Apr 27, 2011)

JAAune: I am still in the preliminary stage and trying to know as much as I can before I talk to an insurance agent.

Bill White: I suppose a liability insurance or GLI for the shop… and suppose if I get hurt in there, I don't sue them…


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## Yonak (Mar 27, 2014)

> JAAune: I am still in the preliminary stage and trying to know as much as I can before I talk to an insurance agent.
> 
> Bill White: I suppose a liability insurance or GLI for the shop… and suppose if I get hurt in there, I don t sue them…
> 
> - Be Bliss


These are questions an agent can help with. I'd go to one to help understand, not try to understand ahead of time.


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## unbob (Mar 10, 2013)

I have done shared space before, the insurance part sort of protects both parties. Otherwise, it would be possible to hurt yourself on you own equipment, and sue the other guy.

In these times, its possible, and likely to be sued for any stupid thing and lose!


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## j1212t (Dec 7, 2013)

If at all possible, I would not. The only ship that doesn't sail is a partnership (Dave Ramsey)

If you absolutely must, I still wouldn't..


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## mudflap4869 (May 28, 2014)

The quickest way on earth to ruin a friendship and turn them into your worst enemy. How well do you know this person? What is this persons background? Would you actually trust this person to share *YOUR* shop? Why is he willing to allow you access to his equiptment. *Extreme caution!* I cannot advise you strongly enough to at least delay taking this action until you do a complete assessment of the reality involved. A good deal most often cost you much more than you can afford.


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## camps764 (Dec 9, 2011)

I agree with the others, it would be best to ring up an insurance agent and have a candid discussion with them about what you are trying to do. I had to do it and they asked all of the right questions.

THEN, call a few different agents/companies for quotes…they WILL vary, in some instances, quite substantially.

Make sure that you get adequate coverage, the last thing you want is to get into a bind because you were injured, your insurance won't pay, and you have to try and take legal recourse with your friend in order to save yourself and your family financially.

I've learned over the last year that going into business ain't cheap, but it is fun. And a shared workspace could be a really excellent deal, as long as everything is hammered out.

I would also advise that you and your friend sit down and draw up some binding documents that outline how profits are divided from shared work, who retains property from shared tool costs, how material costs are divided, tool maintenance costs, etc. It sounds like a lot, but a little due diligence up front may save you a lot of headaches, hassles and bad feelings down the road.


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## Tennessee (Jul 8, 2011)

My guitar business, which also includes jewelry boxes, golf club hat racks and other items, that shop is in my home. Still, I have a city license, county license as stipulated by the authorities, I pay taxes to state and feds on both my business and my personal taxes, I have been worked over by the assessor's office, having to pay a few dollars assessment on tools I bought ten years before I had the business. This is all part of the deal, keeping yourself legal.

With all that, one of the most important things was the acquisition of a commercial business insurance policy. I currently have one million in liability, (pretty typical for one person shops), which covers not only the goods I sell that might hurt anyone, it also covers anyone who would happen into my shop and get hurt by anything, even tripping over a piece of wood. It costs me about $700 a year for this coverage, by an independent commercial agent. It took me a while to find one because a lot of regular insurance agents, (like State Farm), will not touch these small shops.
It seems expensive, but much better than someone suing me back into the stone age for a broken string on one of my guitars hitting them in the face, or someone getting a splinter off of one of my other items and getting an infected finger that causes lots of "pain and suffering". It also allows me to do things like work with the local high school and have a student over to observe me on what they might do in their own shop at school. (It does not allow them to run tools or actively participate in the business - another level.) These people have brought me more business by being a good neighbor. A recent visit by one student, his teacher and his parents ended up in a quick $200 in sales that took about two hours of my time.
Many times I have thought of getting rid of it, but then I think of what could happen with all the items I've sold or when my neighbor stops by while walking his dog. If they get hurt inside my shop, I'm covered. 
My home insurance agent made it very clear that although he could not give me the policy, my house policy also does not cover these problems I've outlined above - needed the commercial policy.
I'll keep it until I go out of business, whenever that might be. And I am just part-time…


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## Yonak (Mar 27, 2014)

> With all that, one of the most important things was the acquisition of a commercial business insurance policy. I currently have one million in liability, (pretty typical for one person shops), which covers not only the goods I sell that might hurt anyone, it also covers anyone who would happen into my shop and get hurt by anything, even tripping over a piece of wood. It costs me about $700 a year for this coverage, by an independent commercial agent. It took me a while to find one because a lot of regular insurance agents, (like State Farm), will not touch these small shops.
> 
> - Tennessee


 Tennessee, I would shop around a little more. I have coverage for my home woodworking business as a rider on my home owner's policy. It covers all the things you mention, plus injury to any employee I may have in the future. The limit is 1million$ as it is included in the umbrella an my entire policy. The cost is $175 / year, plus $107 for the primary residence portion of the umbrella coverage. Perhaps the cost is discounted because I have all my insurance needs, except health insurance, in the one broad policy.

Ask an agent. Don't go to an insurance company. The agent knows the policies of all the carriers.


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## Tennessee (Jul 8, 2011)

Yonak,
Good point. I've stayed with them for a couple years now because I just could not find anyone who would cover me at all. I'm with an independent agent now, maybe I need to talk to a few others…


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