Liability Ins?

exitium

Well-Known Member
Hey guys, im curious on what others are doing to protect themselves in regards to product liability. Since the tools we make can be quite sharp and cause a lot of damage im wondering what people are doing to cover any sort of liability law suites that may come from those using your tools.
 
This is an awesome post. Liability insurance also covers the customer who comes to your house or shop to discuss design and buddy who comes over for a few lessons. Typically, your homeowners insurance would not cover commercial activity unless specifically declared. You are also so right about product risks if used improperly. You know there is a reason why the iron you just bought comes with a warning not to iron clothing still on your body.

Our experience in Canada may not be much use to you, but may be of interest. We used to sell about 5% of our total sales to the USA. Great customers. When we decided we'd grown to the point that liability insurance was necessary, we were astounded to find it was nearly impossible to get reasonable coverage to include sales to the USA. We shopped all over, and about 75% responded they would not cover us at all if we made a single sale to the USA. The others offered coverage at about quadruple the price. All made the same comment that the USA is well known to be the most litigious society on the planet, and outcomes seldom have much real relation to the concepts of true negligence or reasonableness.

We were very aware, before getting liability insurance, that even a frivolous lawsuit would put our home and life savings at risk. We've always been vigilant about discussing risks and safety as much as possible. We offer, but try not to rely on, safety information from Manufacturers (ie; the manual with the grinder of the MSDS sheet with quench oil for instance). We've incorporated, which is supposed to insulate us personally to some degree, but we have so much of our personal assets tied up in this business that corporate catastrophe would also ruin us. The liability and other commercial insurance take a huge chunk out of our profits, but we sleep a little better at night.

I've spoken with hundreds of knife makers, and haven't found one who has commercial liability insurance covering their craft. I hear things like "It's not my fault if someone kills someone with one of my knives." "Won't do them much good to sue me. Can't get blood from a stone". "My home owners insurance covers liability."

Caveat Emptor

Rob!

Rob!
 
Great input Rob, thank you. It didnt even dawn on me there may be ramifications for out of country shipping.

I suppose ideally one should form an LLC at a minimum to isolate themselves as much as possible from liability and then obtain insurance as needed. Im surprised to hear so few knife makers have any sort of insurance considering what they create.

The legal state of the US is pretty sad, I get a call from a lawfirm almost weeking asking if I have used a certain drug or had a certain surgical procedure because if I did I may be entitled to compensation. Bunch of damn ambulance chasers!
 
Hey guys, im curious on what others are doing to protect themselves in regards to product liability. Since the tools we make can be quite sharp and cause a lot of damage im wondering what people are doing to cover any sort of liability law suites that may come from those using your tools.
hi. in my area the community college has a "start a small business" group. when i brought up the insurance, was told in NC it probably would be a waste of money. i forget the exact phrase he used, but in a nutshell, you are selling a knife, a tool that is designed to cut and designed to be sharp and it usually is delivered sharp. No judge in this state would even hear a case where you are being sued because the buyer cut themselves. Also, since i am the only person in my company, there is no real money to get. i would check with your local college and see if they have a similar group that could provide advise.
 
Liability and knives has long been a "black hole" for knifemakers. By that I mean that IF you can find it, it's generally so expensive that it's unafforadable. Personally, I had a law firm draw up a waiver of liability that visitor and students sign if they are going to be doing anything in my shop. During my career I've actually had ONE individual try to sue me over cutting himself..... Long story short, it was dropped before it ever got started.

There comes a point of dimisinshing returns for a custom knifemaker.....if you try to cover all those little areas, you're likely gona go broke, paying fees, priemiums, etc. Even insurance for the knife shop can be a difficult thing to acquire....I searched for nearly two years trying to insure my blacksmith shop, and the ONLY insurer I could find was through ABANA....all the other simply refused to ensure it.

Frankly the bottom line with knifemakers and liability insurance.....it's nothing but a "dog and pony" show......because it's not gona save your bacon....in fact if someone brings a suit against you, you're going to have two, because the libiliaty insurance provider will be right behind them.
 
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