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Limiting Liability in Home Shops

Karl Loeblein

Karl Loeblein

Joined
Feb 12, 2018
Messages
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Location
Millington, TN
What are some of the things you do to limit or cover liability of students using equipment in your home shop? For instance, getting severely hurt while using your lathe, bandsaw or table saw.

Do you have all your equipment under an LLC, get $1M umbrella policy, make users sign a liability waiver, refuse to share your equipment, do nothing but cross fingers, make it a club meeting so it can be covered by AAW insurance, or something else not mentioned?
 
I have the exact same insurance for my shop as my club does. A student in my shop is a student and is never left to their own devices as long as they are still a student. Any student that wants to do things differently than what I teach does not stay a student for me for very long. They can do what they want when they are not in my shop. I enjoy teaching and it is my way of giving back for all I have learned from those who gave of their time and knowledge freely.
 
It's pretty standard for a home owners insurance policy to have accidental liability coverage. $100k seems to be pretty common. Even If it was your fault, even if you were negligent that coverage typically applies. It will NOT cover you for willful destruction or injury in most cases. Might be a good start to check what your home owner's policy covers.

I don't run a school and I don't operate a business to produce profit out of my shop so this exposure would an "occasional" event in my case. When I do have someone that wants to learn I become "helicopter turner" and watch 'em like a hawk.
 
If you accept any form of compensation for anything having to do with having people in your shop you really need to talk to both your attorney and your insurance company to assure that you're not leaving yourself open to a major problem in your state or country (laws vary, so there is no one size fits all solution). I've long since concluded that it's cheaper, easier. and more fun to work for free (or for nominal compensation, like a plate of cookies) than to deal with the hassles.

A $1-2M umbrella liability policy on your homeowners or renters insurance is pretty cheap and provides good coverage for hobby activities.

Liability waivers tend to be worth not much more than the paper they are written on if you end up in a big time lawsuit.

I'd read the AAW policy that your local chapter has in place before depending on that insurance. Apparently there are options and we recently discovered that the AAW policy that covered our chapter specifically excluded events in private residences. We've subsequently fixed that by adding coverage.
 
Things change when you charge for classes, and yes, do contact your insurance people. Also, have students sign a liability waiver.

Does anyone know if there is an 'official' demonstrator/teacher/mentor test and certification process? I think this has been discussed before, but don't remember the specifics.

robo hippy
 
Standard home owner insurance will cover not losses arising from commercial activity. Commercial activity might even void the policy, and cause issues with zoning and land use authorities. And buildingbinspectors. You would need a CGL policy. An LLC won't really shield you for accidents on your property unless your home is owned by the LLC.
 
Signed wavier is under the category that lawyers brag about. "There has never been a contract I can't break." Teaching for free and having that million dollar insurance policy will be your best chance. When I taught at Woodcraft, they required that I have a million dollar policy. I had one anyway because I was running a woodworking business at the time. If you teach under the umbrella of an AAW Chapter, I think AAW covers you.
 
Not any plans to charge, but just wanting to let friends use my shop equipment without risking my retirement if something bad happens. Well trained woodworkers can and do get hurt. Sounds like an umbrella policy is needed in this case.
 
"If you teach under the umbrella of an AAW Chapter, I think AAW covers you."

Yes and No. If you are a member of an AAW chapter, and the teaching you do is to another club member or guest at a club event, then yes, that chapter's coverage will protect you. However, if you are teaching privately, commercially or somewhere else, and it is not part of your club's sponsored event, then you are not covered by your club's AAW chapter coverage.

There is an opportunity to acquire liability coverage through the AAW. It is not unlike many organizations that use their leverage to make something available to their members. In this case, the AAW understands that many members are professional or semi-professional and teach/demonstrate their skills. Trying to obtain liability insurance on their own would be stupidly expensive. I have commercial liability coverage that I obtained using the link provided within the AAW members only side of their site. I pay roughly $700 per year (to Hartford Insurance) that covers me when I teach in my studio or elsewhere, covers me when I am at shows, (some shows require this) for my inventory and people who might be in my booth, and covers replacement cost of any equipment or machinery damaged or stolen as a result of a covered incident. Note that the coverage is only available to members who live in the US, and coverage availability varies state to state.
 
Thanks for the detailed information. I mentored my neighbor. who turned severaI bowls. I assumed I was protected because I was a member of AAW. Ignorance is bliss, but in my situation it was bliss only because we were careful and lucky.
 
Larry Mercier said:
Thanks for the detailed information. I mentored my neighbor. who turned severaI bowls. I assumed I was protected because I was a member of AAW. Ignorance is bliss, but in my situation it was bliss only because we were careful and lucky.
Click to expand...

I would think that if you were just helping a friend that homeowners insurance would cover an accident. Then again that's just what I think. :)
 
I have a business policy with the same company that has my home owner policty (State Farm). It covers me with students in the shop, traveling to and from shows, and while at shows. It has $1M liability to cover me in all situations and includes loss due to fire, theft, weather, etc of goods and equipment.
 
Steve Doerr said:
I have a business policy with the same company that has my home owner policty (State Farm). It covers me with students in the shop, traveling to and from shows, and while at shows. It has $1M liability to cover me in all situations and includes loss due to fire, theft, weather, etc of goods and equipment.
Click to expand...
This is a very good example of how coverage can vary from state to state. I also have State Farm for my home and auto (NH). When I spoke to my agent, he told me that State Farm would not be able to cover me nor write a rider on my policy for liability.
 
In the State of Washington you could have a state safety inspector come out to inspect your shop. Tell them you intend to start using it for a business. No fines, etc for violations prior to starting the business and no obligation to correct safety issues. Most states use similar safety rulings to OSHA., Because of budget concerns I'm not sure my state still performs this service.

It could be a real eye opener. You'd be hard pressed to find a shop that doesn't have at least a half dozen violations.... Grinder with the guard removed to use a CBN wheel, grinder not fixed to the bench so it can't vibrate off onto the floor, power cords running across the floor, parts stacked on a table saw (running or not), machine operated without safety goggles, etc, etc.
 
From the AAW, safety in your workshop, including video, and a couple book downloads they've produced.

Safety

www.woodturner.org www.woodturner.org
 
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