Warning to instructors, regarding your insurance coverage

[oftheherd1]

He is not in NY....I am though and any of my teaching has either been at my Shifu's place or at my Wife's office and the insurance coverage for my wife's office covered what I was teaching...but then hers office is a medical office, it may be different for the average office

Interesting how different States view things. When I taught in the US Army, there was no question about that. When I taught at what amounted to a club, the part owner of the business condo went to a lawyer in the condo, and he provided us with a waiver of liability that he said would stand up in any court in our State. Even though I wasn't required to, I even sighed it to relieve the condo owners of liability as a show of good faith.

 

[Flying Crane]

Interesting how different States view things. When I taught in the US Army, there was no question about that. When I taught at what amounted to a club, the part owner of the business condo went to a lawyer in the condo, and he provided us with a waiver of liability that he said would stand up in any court in our State. Even though I wasn't required to, I even sighed it to relieve the condo owners of liability as a show of good faith.

A waiver is helpful. It absolutely is no guarantee against liability, and it never was.

If there is true liability, a waiver will be meaningless.

If the liability isn’t clear, or someone is injured during routine training, for example they turn their wrist and sprain it while hitting a heavy bag, the waiver can be helpful to show the court that the student participated of his own free will after being informed of the possibility of injury. That will help in the defense, it is no guarantee. Also, you still need to defend yourself in court. That is expensive. And if you win, you do not get compensated for your costs. You would need to file a separate lawsuit against the student and show that their original suit was somehow frivolous or malicious.

A waiver is helpful, but it is absolutely not a replacement for insurance.

 

[pdg]

So, all the folks out there teaching in their garages, unless their insurance has been written as a business policy, they are teaching without coverage

That's a very broad statement, and likely very regional too - it's also a little open to interpretation.

For instance, it isn't fully the case here...

I now know I could do the very thing being asked and a business insurance policy would happily coexist with my householder policy (with exclusions/endorsements as outlined previously by myself and Gerry).

Maybe our insurance industry is just more supportive of entrepreneurs?


That said, I'd never expect a standard householder's policy to cover any business activity anyway, so people relying on that liability cover are probably leaving themselves exposed.



Source: I asked both my house insurance and current business insurance providers - my house insurance provider would even extend cover with a business portion, but this had a slightly higher price than getting a separate policy from a different provider.

 

[Gerry Seymour]

That's a very broad statement, and likely very regional too - it's also a little open to interpretation.

For instance, it isn't fully the case here...

I now know I could do the very thing being asked and a business insurance policy would happily coexist with my householder policy (with exclusions/endorsements as outlined previously by myself and Gerry).

Maybe our insurance industry is just more supportive of entrepreneurs?


That said, I'd never expect a standard householder's policy to cover any business activity anyway, so people relying on that liability cover are probably leaving themselves exposed.



Source: I asked both my house insurance and current business insurance providers - my house insurance provider would even extend cover with a business portion, but this had a slightly higher price than getting a separate policy from a different provider.

Maybe the Queen could annex Flying Crane's garage, then he can share in the reasonableness of that insurance set-up.

 

[pdg]

Maybe the Queen could annex Flying Crane's garage, then he can share in the reasonableness of that insurance set-up.

Just declare it an independent sovereign state with no extradition or reciprocal arrangements, then you can introduce your own rules...

That way, if anyone gets injured they'd have to negotiate with the new country for any settlement - and it'd be up to that country's administration whether they wish to recognise the authority of a different nation.

Of course, there would be the issue of having a passport and needing to go through immigration and import/export regulations if you need milk or something...

 

[Gerry Seymour]

Just declare it an independent sovereign state with no extradition or reciprocal arrangements, then you can introduce your own rules...

That way, if anyone gets injured they'd have to negotiate with the new country for any settlement - and it'd be up to that country's administration whether they wish to recognise the authority of a different nation.

Of course, there would be the issue of having a passport and needing to go through immigration and import/export regulations if you need milk or something...

I like the way you think. As an example, I reference the short-lived country of Petoria in Family Guy.

 

[pdg]

I like the way you think. As an example, I reference the short-lived country of Petoria in Family Guy.

I've seen very little of Family Guy, but I'll have to see if I can find that episode later.

 

[Gerry Seymour]

I've seen very little of Family Guy, but I'll have to see if I can find that episode later.

It’s worth finding.

 

[oftheherd1]

A waiver is helpful. It absolutely is no guarantee against liability, and it never was.

If there is true liability, a waiver will be meaningless.

If the liability isn’t clear, or someone is injured during routine training, for example they turn their wrist and sprain it while hitting a heavy bag, the waiver can be helpful to show the court that the student participated of his own free will after being informed of the possibility of injury. That will help in the defense, it is no guarantee. Also, you still need to defend yourself in court. That is expensive. And if you win, you do not get compensated for your costs. You would need to file a separate lawsuit against the student and show that their original suit was somehow frivolous or malicious.

A waiver is helpful, but it is absolutely not a replacement for insurance.

There certainly are no guarantees in life. You might have what you think is iron clad insurance only to have them deny to pay the claim based on an obscure paragraph and their interpretation of it. But insurance would always be a good idea. I simply related the solution we choose.

 

[dvcochran]

Sure, good suggestions but those are cleaner situations if you are keeping a separate location for the business.

The complication is when you are teaching out of your house, and your homeowners insurance is in the mix.

The LLC is the business domain, not where the business is. The LLC is the way to go IMHO.

 

[Flying Crane]

There certainly are no guarantees in life. You might have what you think is iron clad insurance only to have them deny to pay the claim based on an obscure paragraph and their interpretation of it. But insurance would always be a good idea. I simply related the solution we choose.

Sure, understood.

But if a lawyer is advising his client that a waiver will protect him, even to the point where insurance is unnecessary, that is malpractice. That is very bad and irresponsible legal advice. That is so very far from the truth that it should never even be floated as a possibility.

 

[Flying Crane]

The LLC is the business domain, not where the business is. The LLC is the way to go IMHO.

It’s a good idea for running a business. It does not pave the way for running the business from the home, in this case.

Forming an LLC will not convince or prevent the homeowners provider from cancelling coverage when they find out that the teaching is being done at the home.

 

[dvcochran]

It’s a good idea for running a business. It does not pave the way for running the business from the home, in this case.

Forming an LLC will not convince or prevent the homeowners provider from cancelling coverage when they find out that the teaching is being done at the home.

We have a farm/ranch policy with State Farm. I have been with them since I was 14. The farm is a LLC (CCC Cattle Company) and is ran out of our home. Granted none of the farming functions are at the house. If you have a designated area, i.e. your garage and can define the space as your business (paid your business license and taxes) would your insurance look at it differently (like Air B&B for example)? As you said, it sounds more like limitations within your provider. I do have to get my retainers required for some jobs and workers comp. through another provider. All other liability insurance is bundled with all my State Farm insurance.

 

[Flying Crane]

We have a farm/ranch policy with State Farm. I have been with them since I was 14. The farm is a LLC (CCC Cattle Company) and is ran out of our home. Granted none of the farming functions are at the house. If you have a designated area, i.e. your garage and can define the space as your business (paid your business license and taxes) would your insurance look at it differently (like Air B&B for example)? As you said, it sounds more like limitations within your provider. I do have to get my retainers required for some jobs and workers comp. through another provider. All other liability insurance is bundled with all my State Farm insurance.

It is specific to the activity of teaching martial arts. They see that as a high risk activity and the Homeowners insurance providers want nothing to do with it. Other home-based businesses can be compatible, but this type of business apparently is not.

I first checked with my current provider, Lexington, who I got through a Farmers agent, and this was what I was told. I then checked with a provider of specific martial arts school insurance, he can get me professional liability coverage but cannot help me with the homeowners situation. I then checked with an independent insurance agent who has access to policies by many different companies, and he completely and strongly confirmed what my Farmers agent told me.

 

[Gerry Seymour]

It is specific to the activity of teaching martial arts. They see that as a high risk activity and the Homeowners insurance providers want nothing to do with it. Other home-based businesses can be compatible, but this type of business apparently is not.

I first checked with my current provider, Lexington, who I got through a Farmers agent, and this was what I was told. I then checked with a provider of specific martial arts school insurance, he can get me professional liability coverage but cannot help me with the homeowners situation. I then checked with an independent insurance agent who has access to policies by many different companies, and he completely and strongly confirmed what my Farmers agent told me.

That's part of the reason I was curious about how they'd treat it if you had an LLC. See, an LLC renting the space from you is legally different from you running a sole proprietorship from your home. In the latter case, you're using your home to teach MA. In the former case, you're renting space in your home to an LLC, which is a MA business. What difference that makes to the insurance company I'm not clear on. If they would allow you to rent the premises out to the LLC, I'm not entirely clear whether they'd have grounds to refuse coverage based on the activity of the LLC, as long as it's operating legally. For any rental to a business, I'd assume they'd refuse to cover the rented portion of the premises, and probably refuse to cover the home (homeowner) for liability related to the business.

 

[Flying Crane]

That's part of the reason I was curious about how they'd treat it if you had an LLC. See, an LLC renting the space from you is legally different from you running a sole proprietorship from your home. In the latter case, you're using your home to teach MA. In the former case, you're renting space in your home to an LLC, which is a MA business. What difference that makes to the insurance company I'm not clear on. If they would allow you to rent the premises out to the LLC, I'm not entirely clear whether they'd have grounds to refuse coverage based on the activity of the LLC, as long as it's operating legally. For any rental to a business, I'd assume they'd refuse to cover the rented portion of the premises, and probably refuse to cover the home (homeowner) for liability related to the business.

Well feel free to dig further into that, but it is clear to me what they are saying: don’t teach at home or they cancel the coverage. It’s pretty blunt. Placing an LLC in between me and the insurance company is unlikely to change that fact. They don’t want martial arts taught at the house. Period. I cannot imagine that would change if I simply do it under the guise of an LLC.

 

[dvcochran]

Well feel free to dig further into that, but it is clear to me what they are saying: don’t teach at home or they cancel the coverage. It’s pretty blunt. Placing an LLC in between me and the insurance company is unlikely to change that fact. They don’t want martial arts taught at the house. Period. I cannot imagine that would change if I simply do it under the guise of an LLC.

East coast/west coast bias. Haha.

 

[Flying Crane]

East coast/west coast bias. Haha.

Not sure I follow. Do you think there might be different state regulations that could affect this? I dunno, maybe. It would be interesting to know.

Just call your homeowners provider and tell them that you want to teach martial arts in your garage, or you want to open an LLC and then rent your home to you as the LLC so you can teach martial arts in the garage, and see what they say.