I own my land and have been building a house for almost 20 years on a pay as you go or have time. I'm divorced 22 years. I recently retired and trying to stay that way but have run into a brick wall. Having liability insurance on the property . Since my house is still not finished as far as insurance companies think it should be, I've been unable to get any kind of coverage. I would like to sell a product of some kind like vegetables or storage sheds and though probably rare , legal issues can arise where you can get sued if someone finds a fire ant on there tongue after eating your tomatoes or stuck by a nail in your building. It all seems to fall around having homeowners insurance that I can't get so I can't get any other kind. Anyone have any ideas on getting liability protection without a homeowner policy?
Steve Day wrote:I I would like to sell a product of some kind like vegetables or storage sheds and though probably rare , legal issues can arise where you can get sued if someone finds a fire ant on there tongue after eating your tomatoes or stuck by a nail in your building. It all seems to fall around having homeowners insurance that I can't get so I can't get any other kind. Anyone have any ideas on getting liability protection without a homeowner policy?
What you are wanting is not home insurance. You need Business insurance. You want to start a business selling vegetables or storage sheds. A homeowners policy might not cover this.
Find out what it takes to start a business. Does your state or county require a license? When you get the details worked out then contact an insurance agent regarding Business Liability.
Does you house look like it is not finished? Maybe if you make the outside look like it is finished you could get insurance? Have you gotten a cancellation from a company because of this?
My house is not finished and probably will not be in my lifetime.
When we bought the property it came with a house that was finished outside and was a shell inside. I called my car insurance agent and said I wanted to insure my house. He didn't ask me if it wasn't finished.
The problem I see is that you have not had insurance for 20 years.
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I could be wrong, but I think the best thing to do here is incorporate into an LLC which might eliminate the need for insurance. Anyone who sued (which is not likely) would thus not be able to get your home and property, which is what could happen if you weren't.
I am not a huge fan of insurance because it is legalized extortion in my opinion. They generate income based on fear, then do everything they can to get out of paying. All you are doing is paying them based on probability and the hedging of bets; people can often do that themselves!
Since frugal living only means insuring what you cannot afford to pay for out of pocket, you cannot afford to lose your property and home, but a side business on a very slim chance that something will happen? Incorporate, stay away from insurance, and just file for your business bankruptcy if they do sue. As long as you have very little business assets they cannot get anything. I think if you do the math, you will see that insurance premiums will make what you want to do unfeasible.
As with anything in life, people vary. I refuse to live my life based on fear, and thus am willing to have more risk. Others are unwilling to do that so they carry more insurance.
Funny, I've been looking at this sort of thing myself.
I've found there are different versions of insurance for different types of liability - and they are really confusing. For example, General Farm Liability insurance, versus Product Liability insurance. Here's a paper and couple quotes from it:
General farm liability insurance typically protects against claims for bodily injury and property damage that occur on the farm premises or as a result of farm operations (IRMI, 2008). These policies cover accidents that affect farmers, employees, guests, and customers.1 Outlaw (2007) and the New England Small Farm Institute (2008) suggest that these general commercial or farm liability policies are appropriate for growers with pick-your-own operations and on-farm
stands. The New England Small Farm Institute (2008) further explains that farm liability insurance covers lawsuits only from activities considered “farming,” which is usually defined to include only agricultural production activities
and on-farm roadside stands. These policies also typically cover the sale of produce in its raw, unprocessed state, whether sold on-farm or at a farmers’ market.
But then it says:
Many fresh produce growers mistakenly believe that their general farm liability policy protects against claims of injury from contaminated fresh produce that causes foodborne illness. But as Hamilton (1999) explains, this is not generally
the case, because the injury usually happens off the farm premises. In this case, a product liability insurance policy is appropriate, as it protects against consumer claims of injury caused by a defective or hazardous product such as contaminated fresh produce. (Holland, 2007).
It sounds like reading the fine print is really important in choosing a policy.
There are also things to look into having to do with processing food. For example, in some states, if you just wash off lettuce that's a processed food. And then that "product" can fall under different liability and potentially licensing.
Thanks for the input. I ended up checking with State Farm insurance. The agent I talked to said they would give me property liability insurance excluding the house and any outbuildings as long as they were not able to insure them under a homeowner policy. It's a $1000 deductible and pays up to $300,000 per claim. This covers product liability of products produced trom the property as long as not produced from the excluded parts. So if you walk on my property and break your arm , I'm covered. For 5 acres cost was close to $478.00
Travis Johnson wrote:I could be wrong, but I think the best thing to do here is incorporate into an LLC which might eliminate the need for insurance. Anyone who sued (which is not likely) would thus not be able to get your home and property, which is what could happen if you weren't.
An LLC can help, but only if the strict formalities of running a business are followed. My guess is that a good number of single member LLCs formed via LegalZoom do not have annual meetings or keep records of those annual meetings. When I sold fruit at a farmers market, the annual insurance was about $250. That may sound like a lot, but keep in mind that LLCs also have fees. For example, in California there is an $800 annual fee to have an LLC.