General Liability Insurance

[kayumangi]

Like Francie said, you could signup on Photo.Net and apply for a discounted rate.

Check it out http://photo.net/info/photo_insurance_specs.pdf

[alwoodruff]

I use State Farm (it's officially a "personal articles policy") and their premiums are VERY reasonable (if not cheap). They cover ANY damage outside of malfunction (which would in theory be covered by the manufacturer's warranty). The only catch is you can't be in business full time. It must be a part time thing... which for someone like me (SAH mom), it's perfect. Oh, and there's no deductible.

[Howard Barlow]

Originally Posted by T. Adam Martin

Since these are public boards, you may want to give an explanation for your response. Legally, the LLC is an entity and the business you conduct as an agent of the LLC attributed to the LLC. I agree that all legal questions should be directed to an attorney for definitive advice; however, if you are out on a wedding shoot conducting business under your LLC and the bride decides to file complaint, she would be hard put coming after your homeowner's insurance should a judgment be filed against you. The court may seize the business's assets, but the personal assets do not belong to the LLC.

Please provide examples if you have some, rather than just cast cryptic aspersions on a valid, recommended business practice that just muddies the water for less educated/neophyte business owners. You may have some valid concerns that can be voiced and we can learn from them.

As a matter of fact, and not cryptic aspersions, I do. My dad bought a country club from a limited partnership. Rather, a corporation my dad owned bought it. In whatever fashion it is done, he purchased the assests only, and assumed no liabilities from the partnership.

Backing up the clock... A member of the CC injured himself on the course. His out of pocket expense for medical was about $1,200. He asked the partnership to reimburse him. They refused.

My dad's purchase transaction fell within the member's statute of limitation.

By now, the member had become really pissed at the partners. He filed suit against the Limited Partnership, each individual partner, my dad's corporation, my dad by name, even though he misnamed him in the suit, and placed him as a resident of a wrong county.

My dad's attorney asked the court for a summary dismisal for my dad, as the contract bound him to no liabilities of the limited partnership. The judge ruled all parties were going to stay for the duration.

My dad filed suit against the limited partnership, and the individual partners.

They decided it would be better to settle out of court with the member, than face two suits.

So, here is my non-aspersion casting of cryptic info. I do hope it meets with your approval.

[T. Adam Martin]

Originally Posted by Howard Barlow

So, here is my non-aspersion casting of cryptic info. I do hope it meets with your approval.

Thank you for your reply and explanation. While I understand you were offended that I called your first comments aspersions and cryptic, they were just that and casting doubt on a solid business decision many here on the boards would benefit from investigating. In a digital world where anonymity is abused and opinions abound, I contend it is necessary to challenge assertions without fact. Whatever personal offense you took to being challenged I will seek to understand and address in future posts with more temerity.

Now, for background, I work for a large multinational acquiring, disposing and forming businesses whether they be new businesses, existing or joint ventures. I say this to establish that I negotiate for a company that deals with formation legalities on a daily basis.

Whenever the experience is personal, it makes it much more difficult to discuss because real emotions are involved. Remaining objective is difficult to do. Without knowing all the facts and ins-and-outs of the case, I will address some things that jump out:

My dad's attorney asked the court for a summary dismissal for my dad, as the contract bound him to no liabilities of the limited partnership. The judge ruled all parties were going to stay for the duration.

This is not a summary judgment against the defendent. The original issue you raised was whether an LLC protects you personally. This example you provided does not answer that. Yes it caused personal emotional duress and yes, your father was named in a civil suit. He was, however, not deemed in the eyes of the law to be at fault. Legally, someone can name as many parties as they want in a suit. If you have a complaint against someone, you can take them to court. It may be cost prohibitive and unwise, but you can name them in suit. This seems to be the case here. Now would the judge/jury have found liability with all the named parties? We will never know, but we can hope that the LLC would operate as it should and your Dad would not be personally liable.

Anyone can attempt to sue you personally. The whole principle of forming an LLC is to guard against someone who will attempt to do so. As a photographer who is conducting business in the state of Texas, you assume the risk that someone will try to sue you and the LLC. In the eyes of the law, however, the LLC was designed to separate the going concern from the individual. When it boils down, the question becomes do you have faith that the system will work? From your comments and example, I take it you do not believe the system works. I contend that your example does not demonstrate one way or the other: it was settled out of court so the law was never allowed to weigh in.

Is it frustrating that someone can flaunt the law/system and file suit anyways? Yes. Can it be devestating trying to fight? Yes. Will there be exceptions to the rule? Unfortunately, yes. The LLC/C Corp/S Corp still remain as good, solid business choices, despite some exceptions.

[Howard Barlow]

Originally Posted by T. Adam Martin

This is not a summary judgment against the defendent. The original issue you raised was whether an LLC protects you personally. This example you provided does not answer that...

It was not intended to answer that, per se. It was to address the point to be aware that personal liabilities may still exist, regardless of how you organize your business.

He was, however, not deemed in the eyes of the law to be at fault. ...Now would the judge/jury have found liability with all the named parties? We will never know, but we can hope that the LLC would operate as it should and your Dad would not be personally liable.

I did not say he was found at fault. I said the judge said he, along with the other individuals, was going to court. No, we will never know. Maybe he would have gotten out without disability, perhaps he would have paid a large sum. We can't know past 'what ifs'.

We hope the LLC will work as designed, and except in rare cases, I'm sure it does. However, as you well know, 'what happens' is determined in the courtroom, not the written statute.

...When it boils down, the question becomes do you have faith that the system will work? From your comments and example, I take it you do not believe the system works. I contend that your example does not demonstrate one way or the other: it was settled out of court so the law was never allowed to weigh in.

Yes, I do have faith the system works... most of the time. We live in a nation of laws, I expect them to work. However, I know things do not always work as intended, thus, precedents and case law appear.

As a Texas Peace Officer, I understand the written law is not always what happens in court, on a criminal basis. I also know, by experience, civil law is quite similar.

No, my example does not prove yea, or nay. We will never know the unknowable. But, the possibility existed. That is my point. Protect yourself the best you can, but do not believe you are bulletproof. Why do you think people go to court? If it was carved in stone, there would be no need.