Liability Insurance & LLC?

[Chas007]

This one is for all the self employed guys and gals out there. I'm not even just really getting started with my own business. I've been a welding instructor for the past 25 years and now that I have retired I would like to keep in welding and use my skills and knowledge to help people and earn a little extra money. I have always loved welding and would like to keep my identity as a welder.

I might make 6000 to 12000 per year welding. I have no way of knowing, but I'm setting up for mobile and really only want something like part time.
Do I need to form an LLC and get a seperate business bank account?
Do I need liability insurance before I even have my first potential customer?
What did you do?
What are your experiences with these and starting your own business in general?

Seems like everyone wants a piece of the pie before I have a pie.

[Bushytails]

I don't have a welding business, but I did have business liability insurance for another business. It was surprisingly cheap. It's probably a very good idea to have it. You don't want someone to hurt themselves, possibly due to their own stupidity, and then be on the hook for a million dollars...

A separate bank account makes your paperwork a lot easier. I don't know anything about LLCs.

My general experience with starting my own business is that the government hates small businesses. Expect everything to involve way more paperwork and money than it should, especially if you ever try to hire a helper.

[tarry99]

Well being self employed isn't always what it's made up to be??rewarding Yes,.........Small business License , perhaps a permit in your city and a DBA filing for the LLC is just the start of lots of paper work & some cost to get going depending on state...does it in fact limit your lability totally? Not really.......but when folks get into asking questions about LLC's and Liability Insurance One must assume you have assets that you wish to protect? ............Consult an attorney....he / she may also be helpful with your LLC , regardless liability Insurance is a good idea and that product comes in various forms.........Risk / Reward in any business is always the main question. Can you afford enough to keep you out of trouble if that day comes? Lot's of questions only you can answer......Good Luck!

[MMW]

If you plan on using it as a business then you should set it up that way. This also allows you to deduct all expenses as well as pay taxes plus makes you do a lot of paperwork. If it is going to be more of a hobby then keep it a hobby and accept the risks that are there, ie no paperwork, no checks, no license, no insurance, etc. This will limit the type of work you will be hired for but I assume since you are retired you want to do that anyway. I don't see why anyone would want to run a legal business grossing 6-12k a year as the amount of non-billable hours running it would eat that up quickly. Just my opinion.

[Chas007]

I don't see why anyone would want to run a legal business grossing 6-12k a year as the amount of non-billable hours running it would eat that up quickly.

You know I don't either. I may be nuts! I may end up making more than that, I hope so, that was just a conservative guess. I really don't want the hassles involved with being legit, but these days you couldn't fix a crack on your neighbor's lawnmower without taking a chance on losing your house. Everyone wants something for nothing and if they can't win the lottery they hire a lawyer. Just my opinion. Atleast I'm willing to work hard for my money. Have formed my LLC with the state, got my EIN number from the IRS and I'm purchasing liability insurance. It will cost me about 1300 a year to keep those active. That's not too bad if I can make a little money.

[walker]

Yep, get an LLC, and get a liability policy, and a license, and a tax license. You will want to do a little more business than that to pay for it though.
Either that or get a burner phone, call yourself Jack Squats Welding company, accept only cash, and ignore all the rules and refs. Those are both the accepted norms for running a welding businesses here.

[Chas007]

Yep, get an LLC, and get a liability policy, and a license, and a tax license. You will want to do a little more business than that to pay for it though.
Either that or get a burner phone, call yourself Jack Squats Welding company, accept only cash, and ignore all the rules and refs. Those are both the accepted norms for running a welding businesses here.

I have to be legit, I'm far to pretty for prison :-)

[Bushytails]

Most welding businesses here are in the latter category. I've noticed they're usually the ones who do welds that show up on awful trailer weld threads.

What I always say about running your own business... Being your own boss is great! First you do all your work, then you do all your boss's work.

[snoeproe]

Been down this road myself. Finding liability insurance to cover you for mobile work can be challenging. Most insurance companies want nothing to do with spark makers. Talk to other folks in your area doing similar work.

[MMW]

Just to expand on this " Most insurance companies want nothing to do with spark makers." snoepro wrote.

When I first looked for insurance I was told to narrow down what I would be doing as the more specialized you are the easier it is for insurance companies to rate you. For instance a guy who does only railings is easy to rate because there is a lot of data out there to determine risk vs. the guy who says I will weld anything and everything, there is no way to determine risk because the ins. co. has no clue what they are insuring. Usually welding on anything that is road going, ie trucks, trailers, etc. is a high risk also because when it fails it usually has collateral damage. It's a fine line you need to walk in describing your work. If you lie about things you risk not being covered when you file a claim but if you want to be insured for every foreseeable situation it can cost big dollars.

Another thought if you are a single person LLC you can still be open to lawsuits as they will sue the LLC but also sue the person who performed the work. You are still the business and the business is still you. Not as much protection as some people are led to believe.

I'm not an expert on any of this but just what I have picked up over the years.