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  • Welding bussiness owners questions?

    I'm thinking of starting a welding and fabrication bussiness and had some questions for the bussiness owners. Liabilty; to protect your self it seems that an LLC is the way to go? How are most weld shops registered, LLC, inc, sole proprietor etc? Insurance; good companys? Bad companys? I've heard that insurance is very expensive if you do and repairs or welding on vehicles, is that something to stay away from and also keep the rates down? Comments? Sprog

  • #2
    I am a sole proprietor, and am licensed for retail sales. I manufacture my products and sell it in the retail market. I do not have liability insure for that, other than the standard home stuff, it also covers my shop as I work at home. I don't do weld repairs unless it is a friend. I have started doing installs in the field and so I am probobly at risk right now and need to find new coverage for that. In fact I may need to change my bussiness license too. I give up any work I feel funny about, from a liability standpoint. I turn down customers who seem like they would be future problems, and although it is not a surefire method, I have not had any problems yet. I am backlogged about six months right now so can afford to turn work away. If you need to take that questionable work I would be sure your are overinsured.
    Good luck.

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    • #3
      Sprog and Walter

      Originally posted by walker
      I am a sole proprietor, and am licensed for retail sales. I manufacture my products and sell it in the retail market. I do not have liability insure for that, other than the standard home stuff, it also covers my shop as I work at home. I don't do weld repairs unless it is a friend. I have started doing installs in the field and so I am probobly at risk right now and need to find new coverage for that. In fact I may need to change my bussiness license too. I give up any work I feel funny about, from a liability standpoint. I turn down customers who seem like they would be future problems, and although it is not a surefire method, I have not had any problems yet. I am backlogged about six months right now so can afford to turn work away. If you need to take that questionable work I would be sure your are overinsured.
      Good luck.
      Ive owned My own welding and fab co for 28 years, and the co is 101 years old this year, When I tell you what I pay for product and liabiality ins. only thats why the hourly rate in ct. is so crazy, then put on workmans comp, anouther wopping 28%,all my custs are fortune 100 companys and require a cert of ins.coverage mailed by the ins co, directly to them, 2 accounts, 1 you know that make the yellow and black tools want a 2 mil. umbrella,,and there is no claims in my 28 years., or ever from what iknow,and there is no manufacturing left in the usa, now Put on you building and contents ins, AND THE GRAND WHAMMMY ,HEATH INS,,and there are guys with brand new welders in back of there pidkup, registered in there name, no EIN # or st of where they work # ,no cpa costs,no taxes for being a buisness,No Duns and Bradstreet #, no tel # in the co name, (which is double)and if I keep going on it crazy,,Corp. was the way to go ,so they could not take your home incase of a accident, then the lawyers got smarter, and the Gov. invented the llc, which is 100% more bullet proof than a corp,But they Just came up with a new fee in Ct.(dont know about any other state, but all boats in Ct. are registered in delaware?),I could keep going for another 5 mins, But you get the pic,Hope this helps, Jack, any more questions e mail, [email protected] GOOD LUCK

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      • #4
        I've had my business since the mid 80's. I have seen a lot of tricks used to get out of liability...usu used against me. The LLC is one of them. A District Attorney informed us that the way to get around that is to name the company AND principals BY NAME in any lawsuit....result, LLC is not protecting them as they are defendants through the company in a limited form and by themselves as a singular LIABLE entity. What that tells me, if they want to get you, they can.
        Don


        '06 Trailblazer 302
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        HH210 & DP3035 spool gun
        Esab Multimaster 260
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        • #5
          My company is a L.L.C. and I have 1 mill in liability insurance (not enough),Theres always away a Attorney can figure a way to get to you!!!

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          • #6
            Sprog,

            As DDA52 posted an LLC is not a simple solution to avoiding lawsuits. I have several friends that are LLC's. They are not welding companies, but have been sued for various reasons, more than once as an LLC.

            I think being incorporated is the best option as well as carrying all the insurance you can afford. A million dollars is nothing with the nature and abundance of ridiculous lawsuits in our time today. Where I live it is very inexpensive to incorporate and maintain that status.

            I will weld most anything for anybody within reason. However, there is a risk involved. There is nothing that can be welded that cannot be broken under the right conditions including abuse. If you are seriously pursuing a welding and fabrication business, spend the money to talk with a good attorney before doing something you may regret.

            One last note about the business. When I first started I incurred expenses I had never even thought about. There are property taxes on your equipment, depreciation schedules, options to lease or buy, advertsing, methods of payment (credit cards or account only), several types of insurance including liability.

            I wish you the very best in your business venture

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            • #7
              Don

              Originally posted by DDA52
              I've had my business since the mid 80's. I have seen a lot of tricks used to get out of liability...usu used against me. The LLC is one of them. A District Attorney informed us that the way to get around that is to name the company AND principals BY NAME in any lawsuit....result, LLC is not protecting them as they are defendants through the company in a limited form and by themselves as a singular LIABLE entity. What that tells me, if they want to get you, they can.
              What sucks is that honest and hard working guys like us,,it all comes down who has the smartest attorney, ive seen some cases where the judges(Remember a judge is only a attorney who could not make it in his own buisness ) look at who is trying the case,on of my best friends is a attorney, and honest, if you dont have a case ,he wont take your money, his father started the firm 65 years ago, and there home phone #s have to be in the tel book, and they all work a half day on sat,and they are one of the most prestiougus law firms in ct,.They dont chase ambulances, and turn down half the cases that come in ,because the are 100% fraud,we need more like them, buy 99% will take anything,,,And in the long run, us the small buisnessman pays,,But im not changing my ways, Ill stand in a food line before i stoop to there ways of working, but atleast I can sleep at night, Problem is the crooks sleep better,I could type for a hour, BUT you know what I mean,Jack

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              • #8
                Hawk

                Originally posted by HAWK
                Sprog,

                As DDA52 posted an LLC is not a simple solution to avoiding lawsuits. I have several friends that are LLC's. They are not welding companies, but have been sued for various reasons, more than once as an LLC.

                I think being incorporated is the best option as well as carrying all the insurance you can afford. A million dollars is nothing with the nature and abundance of ridiculous lawsuits in our time today. Where I live it is very inexpensive to incorporate and maintain that status.

                I will weld most anything for anybody within reason. However, there is a risk involved. There is nothing that can be welded that cannot be broken under the right conditions including abuse. If you are seriously pursuing a welding and fabrication business, spend the money to talk with a good attorney before doing something you may regret.

                One last note about the business. When I first started I incurred expenses I had never even thought about. There are property taxes on your equipment, depreciation schedules, options to lease or buy, advertsing, methods of payment (credit cards or account only), several types of insurance including liability.

                I wish you the very best in your business venture
                In this rotton manufacturing economy, oil prices,ins, etc,etc, you know, Evevrboby thinks that you own your own co your a millionaire, as you know, during the late 80,s(money im still falling back on) today is different,and theree are so many "profecnal Beaters out there", you need a rear view mirror duct taped on your shoulder!!!!!!Thats why there are risk takers, and workers,
                Im Going to a seminar on home inspection this week in Ct. for home inspectors, when I callled to confirm yesterday, I spoke with one of the instructers, and real down to earth guy,and said to me "what a circle f&*(%^&*%^$*%#*%$(^%^*)&%^&^k it is out there, I told him i would buy him a beer or coffee after the seminar and explain the welding buisness,,,He was excited to here about it, but he said one thing, at least there is so much work in the home inspection industry,and you get paid up front,Cant wait to here how china and mexico are doing to your profession!! Should be a goood talk, Jack,ps Hawk, your last sentence, about the few "other expences"You and I know it, but that could bury you before your are out of the starting gate,!!!!!

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                • #9
                  I plan on working my afternoon job while starting this bussiness to try to keep things afloat until hopefully things take off. Between what the state wants(fees), insurance etc. and additional equipment that I may need there is a substantail investment needed. The sad thing is that many of you have brought up is the people trying to get something for nothing by sueing instead of working like many us and then the government making it very appealing for industry to have products made overseas. Thank you all for your responces.Sprog

                  PS; Storts, mold inspectors do very well, I paid $250 for 15 minutes work when I was selling my house.

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                  • #10
                    Sprog

                    Originally posted by Sprog
                    I plan on working my afternoon job while starting this bussiness to try to keep things afloat until hopefully things take off. Between what the state wants(fees), insurance etc. and additional equipment that I may need there is a substantail investment needed. The sad thing is that many of you have brought up is the people trying to get something for nothing by sueing instead of working like many us and then the government making it very appealing for industry to have products made overseas. Thank you all for your responces.Sprog

                    PS; Storts, mold inspectors do very well, I paid $250 for 15 minutes work when I was selling my house.
                    Thats My Next exam, But as with the welding buisness, or any buisness,,,The st of Ct. is trying to chase us all out,,And theve done a pretty good job on the major corps,I dont even want to qoute you the prices im getting on putting on Mold inspections and the paper work involved, !!
                    My gripe is that only 22 states require a lincence for home inspection, and as I said before Ct. Is one, Maybe I can get the job to inspect our ex govs cell. thats going bye-bye for a year and a day, starting 4/01,,,But hang a single outside in Ct. and your a welder, If you want to play with fire(No pun intended)and have no ins, and have custs, that will take you ,and dont get caught by your town(taxes) state(taxes)and god forbid you burn someones plant down, double ,,Agreed the $250.00 sounds great, But the Buy the time everyone gets paid, plus you have lab fees, and if you deciede to sue the inspector, because a spore droped,Even though the first thing you have your cust sign, is they wont sue you, there the attorneys out there, that know all the tricks, You dont end up with 2 much of that 250.00,I starting to believe the only safe thing today, is to get the right 6 numbers correct on that dollar ticket,,,Thanks for the pricing, Jack-----
                    PS,Sprog we are not by any means trying to scare you, you just seem like a hard working honest guy, and we (I think I speak for most all of us) is that we dont want to see you get sucked in!!!!Best of Luck, and keep us posted, Jack

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                    • #11
                      If you are simply a part time business, with not enough revenue to buy insurance, LLC and the like, why couldn't one draw-up a contract with the customer that your services are "as is" and if there are any liabilites then the buyer is totally responsible. If there is money to be refunded, like service fees, then it is only if you agree. Perhaps this would take care of two things. One is that it may eliminate your liability for your services and two make your part time services affordable for both you and the customer.

                      Not a legal opinion, just a thought. Anyone done this?

                      Bill
                      Bill
                      Miller Dialarc HF

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                      • #12
                        To Bill

                        Originally posted by leeave96
                        If you are simply a part time business, with not enough revenue to buy insurance, LLC and the like, why couldn't one draw-up a contract with the customer that your services are "as is" and if there are any liabilites then the buyer is totally responsible. If there is money to be refunded, like service fees, then it is only if you agree. Perhaps this would take care of two things. One is that it may eliminate your liability for your services and two make your part time services affordable for both you and the customer.

                        Not a legal opinion, just a thought. Anyone done this?

                        Bill
                        Bill , It does not say what state your from, I know Ct. If your ins co, NOt YOU!!!!(everybody got to ggod at making proff of ins. certs) Thats how it works in our state,Even if we did, then you get a 1099, now your CPA bills are growing, and it you still have to prove you have ins. if not the customer pays, and guess who pays in the long run, Maybe other states are easier, or you doing work for mom and pop operations, but you get to the fortune 100 companys, and they have stockholders to answer to, Believe me, we have thought of anything to knock down our overhead,and still make sure we dont loose our houses,Any body with any ideas, Please chime in, And dont even ask about home inspection ins!!!!!! Problem is we have to charge to make a buck, custs get mad and its not our fault, We dont make the rules, we only play by them, and there is always a few that dont,Jack

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                        • #13
                          Walker...

                          Walker,
                          I am also in the Phoenix area, if you have some time I would like to talk as I have recently started a Wood/Metal fabrication business.
                          E-mail: [email protected]

                          Chris
                          Chris
                          87' Mustang GT - Blown 306 Road Racer
                          Millermatic 210
                          Spectrum 375
                          [email protected]
                          www.ckvalentidesigns.com

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                          • #14
                            Bottom line, find a GOOD small business attourney and work with them. There are things you can do to limit your own liability, but there is NOTHING you can do to totally exclude YOU. It is WELL worth it. Any other advice you get is worth what you paid for it.

                            And for some more free advicee, the other side of the insurance deal is to have as little as possible. The more you have, the bigger target you are.

                            I have seen cases where a little guy, who did virtually nothing wrong, became the main thrust of the lawsuits, even though a larger company did most of the damage. The little guy had better and more insurance.

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                            • #15
                              ChrisV, sent you an e-mail, I didn't check the board for a few days or it would have been sooner.

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