Liability Insurance ...what is covered?

[shawtycat]

Hey guys,

Quick question. For those of us who want to start our own little Catering or PC biz, how do you go about getting Liability Insurance and what does it cover?

Are there any special documents you have to show the insurance broker? I know a biz cert. , license and a food handler's cert. will probably be definites but can't think of any thing else. And if you are using your own car do you have to transfer your car under the new policy they are offering? Or just upgrade with you own car insurance company if their rates are lower? Does it cover your equipment too?

So many questions.

Jodi

 

[fodigger]

Liability insurance covers you if something you do hurts somebody else. ie your customer gets sick from your food, your chafing fuel starts a fire, while carving the meat the knife slips and cuts the customer etc... you will need a min. of 2 million and I suggest 10 min. the price difference is not that great for the added protection.
You'll need at min. a business licence and a health permit. Your Local insurance guy will be able to answer these questions for you though as there my be requirement special to your area. On the car issue.... We keep everything separate personal and business. Although I'm not a lawyer MINE said that to use a personal vehicle for business could possibly open me up personally in the event of a accident.
I'm over insurered I'm sure but I sleep well at night because of it.

 

[shawtycat]

Hmmm,

Definately alot to chew on! :talk: When I was getting ins. for my car my ins broker had asked me if I was gonna use it for biz purposes. At the time I said no. So, its okay to leave my car with the personal ins. and just get general liability ins for the biz then that includes my equip?

My personal car ins. is pretty low. Thought there was some special ins. pol. that I would have to get for Personal Cheffing. Someone said that they usually just stick you under a catering pol. Another said that there is special ins for PCs but unless you join an org it'll cost you an arm and a leg. But when I think about it....with the dues plus ins. Arent you paying the same rate essentially?

Jodi

 

[fodigger]

I pay about 2500 a yr for my personal stuff - house, car and umbrella.
And about 35000 for the business. We are a large business though. And that doesn't include workers comp either that works out to $9.62 per $100 payroll. My payroll last yr was about $800,000.00 so figure that bill out. Ouch!!!!

 

[shawtycat]

WOW! That's a HUGE bill! Whew, Im trying to keep this as just me. If it get's hectic maybe Ill get some help. I only keep thinking about employee comp and the taxes Ill have to pay on employees. Just thinking about it STINGS. I feel my wallet quivering in fear!

Sometimes it sucks being a biz owner I guess. Wonder if I should still go the way of Sole Proprietership or Incorporate. Have to call up the IRS and ask some quests about taxes. Nice bunch of people when it isnt tax time.

Jodi

 

[fodigger]

That question is different for everybody. Given the size of our project we are 3 LLC; LP; and Inc. mostly for protection purposes though.
For a small business though there are 2 types of corps. S and C talk to your accountant to find out which would be better for you. If you own anything of real value ie a home then incorporating adds another layer of protection between business assets and personal assets.

 

[shawtycat]

Only things I have of value are:

2 desktops
1 laptop
1 color laser printer
1 b&w laser printer
cookbooks
digi cam

and cooking equip.

Im real cheap! Car is on lease for now.

Jodi

oh ....you are talking to my accountant. ME!

 

[panini]

Inc. kinda provides you with a blanket of protection of your personal things. You don't have to have things of value to be slapped a judgement. It should be one of your goals to put you and your family as far away from the business, liability wise ,as possible.
Liability ins. is usually written for small business in conjunction with your Bus. property ins. They usually want to make sure that food preperation is coming from a liscensed and inspected kitchen. I would also add spoilage to your policy. I've used ours twice in the past year, once for walk-in cooler(lightning) and once for mechanical breakdown.Most commercial properties will require a minimun of liability. Ours varies from 1,000,000. to 5,000,000. to come onto the property to deliver. I am hearing that PC's are running into the same thing, although I think it would be a plus to offer your coverage to clients for comfort.
Don't forget taxes, even if it's just you. You will be paying self-employment and all the rest. I NEVER want to say anything bad about the irs, but I think I would seek advice from a CPA with business developement background or from a group like SCORE before I go to the irs for info.
Jodi,
have you gone from cookies to PC or am I confused? We all know the answer to the obvious.

 

[shawtycat]

hey pan,

im not allowed to cook from home in nj. id have to rent space at a restaurant/bakery.....afterhours. so the cookies wont work unless i get my own premises. i know about the irs and all the stuff they take out when you are self employed. ive still got great deductions....such as almost three kids, equipment, office supplies etc. im still gonna have to talk to a cpa and lawyer though.

jodi