Legalities of Doing Work

[OverkillYJ]

So I have a nice garage setup. I offroad and built my Jeep and help my friends a lot. I am trying to figure out what would happen if I started doing lifts and suspension modifications for people. Pretty much just some word of mouth business to get some extra cash. I am not a mechanic, I am just good with my hands and have been working on **** for a while. Also, these cookie cutter lifts are a piece of cake to deal with. The hardest part is always rusted on parts. I would rather not get sued. If I do this I would like to be insured, if it would even be possible.

I also worry about other people doing any work in my garage to their vehicles. I dont want to be liable if they cut their finger off, or they don't put their vehicle on the lift correctly and it lands on them. I wouldn't know the first thing about how to create any legally binding type of waiver though either. It is kinda hard to say to my buddies, no you cant work in here because I dont want to get sued, I could easily get them to sign a waiver though since they would understand that. Not to mention it would be across the board for anyone spending time in there.

I am sure some of you guys must have solved this issue.

 

[eljefino]

It would be hard to scale any insurance you get to "part time" as, obviously, a full timer would claim part-time status to save money then coincidentally he cut his finger off during the 8 hours a week he declares he works.

It's a sticky wicket as you'd need both business liability and worker's comp. Furthermore any environmental damage you do (or someone else has already done, but has yet to be discovered) to your residential dirt, water etc will bring tons of liability. Not seperating yourself and your business with a LLC, partnership, etc. puts your house, retirement etc within the realm of being lost in a lawsuit. Business licensing goes from pricey to very pricey per year so you have to be "pretty serious".

Short advice: take cash only, nothing in writing, if you get injured tell the ER/insurance people you were working on "your" car.

The good thing you have going for you is doing bolt-on lift kits and following their instructions to a T. That holds up pretty well. If you did custom fabs then you'd have to explain who engineered it and applied a professional engineer stamp, etc.

 

[Falcon67]

From a homeowner perspective, if you are "working with a buddy" then your home liability policy should step in. If they find out you charge for it or performing commercial work, then they will refuse the claim and you're on your own.

Also - wavier means nothing. I work with our local drag strip and I can assure you that everyone signs a wavier and to the lawyers it means zip. Probably better to have for a "I made an effort", but if you think it'll keep you from getting sued, it will not.

 

[Angelfire]

IF something were to go wrong and the owner decides to sue, you'd better have a deep wallet as the lift manufacturers will surely a) say you we're not a certified/authorized installer of their products and b) will have deeper pockets than you.

 

[Jagmandave]

I host a lot of MINI club shop days at my house and before I did I called my insurance agent to ask if I needed a blanket liability policy or something.

He said as long as they were working on their own cars, and I wasn't charging money any issues in the garage would be covered by my homeowners policy.

I was also worried about the "what happens if a wheel falls off after they leave my shop and they hit a bus full of nuns and children" aspect and he said if they did it was on them and their insurance, since they worked on their own car. At the first shop day we did in fact have an issue with one car where the caliper bolts weren't tightened and they carved a groove in the inside of an alloy wheel till it broke, since that time I've changed how we work on stuff - only 2 men per car (instead of anyone/everyone just doing what they want) and I make them go back over their work before the car comes down off the jack stands.

I do have a "shop supplies" kitty for donations to cover the cost of shop towels, chemicals and such.

I think you should talk to an insurance agent (not necessarily your agent) about what you want to do and see what they suggest. A $1mill blanket policy is not that expensive, but I agree that any written waiver probably wouldn't be worth the time to print it out - tho it couldn't hurt. All this is different if you rent instead of owning your home of course.

Since I'm retired I thought about using my shop to do the occasional repair, and suspension mods were right at the top of the list for me too as a lot of MINI owners like to lower their cars and so on, but I decided it wasn't worth the few extra bux I could make to expose myself to potential liability, so I don't do it.

As to letting them use your lift, you might institute a rule that no one is allowed to raise a car unless you check it first, and of course you'd have to have a clinic on the safety releases and the proper way to use the lift every time someone put a car on it.

You could set up a shop kitty for donations to cover the costs of using the lift (electricity, wear parts, chemicals, oil and such)

The local BMW club used to hold shop days at one of the member's houses, but now they rent out the local DIY place and use their stuff.

 

[OverkillYJ]

I am more or less worried about these things.

1: I install a lift, and three months later after tons of abuse the guy breaks a control arm and rolls his Jeep, then tries to blame me for it.

2: Friend cuts off their finger

3: Friend puts their vehicle on lift and it falls off because they didnt do it right.

4: I do a lift for someone and their transmission craps out and they blame me. (wouldn't surprise me)

Donation bin is a good idea. I will put that up. I will also post rules and make each person sign something that says they are aware there are rules and they cant sue me. It is better then nothing. Also, if I did get sued for some reason for something happening in my garage I don't think a jury would get me if I cover my *** on a lot of things. I know a judge would screw me though.

 

[Hephaestus29]

There are Rental spaces in Beech Grove IN. where you can work on your own or other peoples vehicles. I think they charge anywhere from 3-5 hundred a month depending on the size. I don't see how they could sue the owner for accidents that occur when he's just providing the space.

I can possibly see a problem if you have a vehicle lift or another tool that suddenly fails or becomes faulty & causes injury. That could be a problem regardless of whether or not you make people sign anything.

 

[Jsf721]

You answered you own question. When push comes to shove this is a litigious society. I had an electritian family friend do some work in my business. He had told my Mother business was slow. I had him in to change a burnt balist and install a new light switch that cracked.

Guy fell off a ladder. My latter. He took it on his own
from my tool coral. He broke his leg. I was not there at the time. I called him to see how he was. He told me the latter was defective. I said what latter. He said your latter. i said why didnt you use yours. (He has one on the roof of his truck). No answer. I. got a law suit for a million bucks.

I had his insurance but still got sued for him not being able to do his wife and the wife sues for loss of affection.

So learn from my mistake. Btw. All latters and tool boxes are locked since that incident.

Protect yourself.

 

[Heavy Metal Doctor]

IMO - work is where you make your money, friends are friends and doing stuff with them should not involve money beyond paying for supplies and buy each other a frosty beverage / dinner. If the projects for "friends" are not on that level and you are doing it to make money, then your basicly starting and under the table business....Not worth the risk, IMO - either start a legit business, or keep the projects among select true friends, not every person who claims to be a "buddy" and offers a few bucks just to get you to build their stuff for them / use your resources (shop / lift / etc).

 

[OverkillYJ]

You answered you own question. When push comes to shove this is a litigious society. I had an electritian family friend do some work in my business. He had told my Mother business was slow. I had him in to change a burnt balist and install a new light switch that cracked.

Guy fell off a ladder. My latter. He took it on his own
from my tool coral. He broke his leg. I was not there at the time. I called him to see how he was. He told me the latter was defective. I said what latter. He said your latter. i said why didnt you use yours. (He has one on the roof of his truck). No answer. I. got a law suit for a million bucks.

I had his insurance but still got sued for him not being able to do his wife and the wife sues for loss of affection.

So learn from my mistake. Btw. All latters and tool boxes are locked since that incident.

Protect yourself.

That is exactly the type of **** I am worried about. I work with a guy like that unfortunately. He seems like a normal dude, but if he tripped on his own shoelaces in your backyard you bet he will have nerve damage, or emotional scarring and sue you. We all hate him.

 

[FJ 432]

Once you take money for anything it could be construed as a business. If so, your homeowners policy is not set up to take that risk. It will deny claims and limit your coverage on items such as tools, lifts etc. Liability would also not be covered in the event of accidents, improper installation, etc.

Homeowner policies are for the most part, a bargain with respects to the amount of coverage, items covered and potential risk/hazards. But they read like a latin written owners manual for a jet plane.

Yes you can lie. But..... if you file a large enough claim they will spend the money to investigate. I know. Just my opinion.

 

[nehog]

Recognize that if you are doing commercial work (work for pay) in a residential zoned location it is likely you'll need permission, probably as a 'customary home occupation' which a repair shop may or may not meet.

And never, ever let someone who is not an employee (and covered by your worker's comp) work in your shop unless you have insurance that covers them.

BTW, most homeowner's policies cover workers comp for normal home employees such as the maid, chauffeur and your butler. It normally won't cover guys working commercially in your shop! It also won't cover what happens when your wife catches you didilling the upstairs maid, no matter that her title says 'upstairs'. You CANNOT make the maid!

 

[OverkillYJ]

LOL

As far as being able to do business out of the building I know I am ok there. It used to be a full service shop and was last inspected in 2000. That was the lift, building, compressor, etc. I guess I would have to do that building completely separate from my home owners insurance. Then I would be covered all the time no matter what I want to do in there wether for profit or for myself? I am also guessing that I could probably charge for space usage, even if it was only $1 to let friends use my garage without fear of anything going wrong. At least if anything went wrong it would be covered separate from the home which would be the safest way to go?

 

[jlckmj]

Similar story, same issue:

I held a wedding for my dauaghter at our farm house, ceremony in the front lawn, BBQ pig in the machine shed (all clean and painted up).
I called my insurance agent to see if I needed a rider to give away beer and wine, and he stated NO, that is what you pay insurance for.

To make a long story short, my nephews wife broke her foot on the dance floor (drunk) and after she had the foot repaired, her insurance company sued my insurance company for the medical bills.

No more parties for me!

Jim

 

[Krash Kadillak]

If you're worried about it, at least you're thinking ahead. I wouldn't put the kibosh on your friends wrenching in the garage. Have a talk with your homeowner;s insurance agent. he can probably help you. I know there are what's called 'umbrella' liability insurance policies that protect you from everything (pretty much), and they're relatively inexpensive.

 

[crewchief888]

IMO - work is where you make your money, friends are friends and doing stuff with them should not involve money beyond paying for supplies and buy each other a frosty beverage / dinner. If the projects for "friends" are not on that level and you are doing it to make money, then your basicly starting and under the table business....Not worth the risk, IMO - either start a legit business, or keep the projects among select true friends, not every person who claims to be a "buddy" and offers a few bucks just to get you to build their stuff for them / use your resources (shop / lift / etc).

^^^^

this

i've done quite a few favors for a select group of friends over the last 15 years. only once has any money changed hands, and that came from one guys wife after i repaired the body pivots on an old dump truck they use for hauling horseshit from the barn to the field.
the pile of horseshit was getting pretty big, guess the truck had been down for several months before he ever called me to see if i could fix it.

many times when we had our little "shop" i'd stop by and find the fridge restocked with water, gatorade, & beer, find a new tank of propane on the grill, or replacement supplies, paint, brake cleaner ect

 

[december45]

This idea is full of potential problems; when you involve "people and money" even buddies, will become pissy and if there is any possible way for someone to get hurt, they will. I know I've said in the past, ohh well not my friends, yeah they will, they are the ones on those goofy warnings "don't run over your self with your mower"
The Govt wants to be involved usually and that becomes a pain with a ton of regulations. We had a rental, we rented to a little old lady nice as could be, she sued the heck out of us/insurance cause her grown daughter walked across the yard in the snow and fell and broke her leg. people will sue for any and all reasons.
Most people think that they are different, it cant happen to them, no one would sue us. We thought that too for about a heartbeat.
I changed oil for an older uncle, it was a worn out dodge omni, about a month later the distributer fell apart and they had to be towed to a garage, he wanted me to pay for the tow and repair, cause i worked on it last and it was all my fault.
If you never remember any thing else, remember no good deed goes unpunished

 

[patrickn]

IMO - work is where you make your money, friends are friends and doing stuff with them should not involve money beyond paying for supplies and buy each other a frosty beverage / dinner. If the projects for "friends" are not on that level and you are doing it to make money, then your basicly starting and under the table business....Not worth the risk, IMO - either start a legit business, or keep the projects among select true friends, not every person who claims to be a "buddy" and offers a few bucks just to get you to build their stuff for them / use your resources (shop / lift / etc).

Agree 100% with this ^^^^^
I started doing side jobs and jobs for friends under the table but the risks are not worth it. So I opened my own shop and mobile repair. Here in my county a business lics. is cheap, the shop insurance isnt too bad either compared to other areas/states (garage owners/ liability/etc...).
There is nothing wrong with helping friends out but when money starts changing hands things start happening so its best to make it legit (i.e. business lics, insurance, IRS/DOR etc...) because some so called friends will put it to you when something happens to them or their vehicle (I've seen a former co-worker get hammered by a so-called friend,lost his house, money etc...).

 

[Garage Dog]

LOL

As far as being able to do business out of the building I know I am ok there. It used to be a full service shop and was last inspected in 2000. That was the lift, building, compressor, etc.

I guess I would have to do that building completely separate from my home owners insurance. Then I would be covered all the time no matter what I want to do in there wether for profit or for myself?

I am also guessing that I could probably charge for space usage, even if it was only $1 to let friends use my garage without fear of anything going wrong.

At least if anything went wrong it would be covered separate from the home which would be the safest way to go?

It seems you want to have a side business at your home. If you charge for your services or the use of your facility, you have a business. It doesn't matter if you charge $1 or $10,000, you are charging money and therefore fall into a different risk classification for insurance underwriting.

You seem to want things both ways, insurance and liability doesn't usually work that way.

Simply having a separate insurance policy for your shop does not mean you are "covered all the time no matter what I want to do..." and charging anything even $1 just proves you are running a for profit business.

Having a "real" business (LLC, Inc, Etc) with real business insurance will help protect your personal assets.

 

[Clik]

Maybe you could start a non-profit 4X4 club and lease your garage space to the club which would accept (suggested) donations for work done. You're probably not going to do enough business to cover more than shop expenses and tools anyway. Do we ever have enough tools. You see where this is going.

 

[LegacyIndustrial]

Call around, insurance is not as bad as you think.
However, they will audit you annually so do not lie about your revenue and be prepared to prove it .

Also, if you go forth on the business end you will have a silent partner called Sammy.

 

[Jsf721]

The club would need insurance and if something happen I your garage and lawyer worth a buck will rip the club apart as a sham. Even signing a waiver of liability won't protect you because in most states you cannot waive your rights on safety and liability.

Maybe you could start a non-profit 4X4 club and lease your garage space to the club which would accept (suggested) donations for work done. You're probably not going to do enough business to cover more than shop expenses and tools anyway. Do we ever have enough tools. You see where this is going.

 

[crewchief888]

The club would need insurance and if something happen I your garage and lawyer worth a buck will rip the club apart as a sham. Even signing a waiver of liability won't protect you because in most states you cannot waive your rights on safety and liability.

add the fact that a nonprofit organization or club has to have
proper paperwork filed with the state,
written bylaws,
meetings,
elected officers,
and are subject to IRS audits.


as a club, you'll likely have that one guy thats a complete *****, and can bring the club to it's knees, morally, financially, and legally....

 

[Clik]

I've started non profits before. It's not that big of deal. Very minimal paper work. Simple bylaws are on line and incorporation in some States is cheaper than a night out w/the family. And yes insurance is still a good idea. For you guys poop-pooing the idea, I think any attorney worth his salt would tell you that it would be one more wall of insulation between you and the person attempting to sue. Furthermore, from my many years experience as a corporate President, businesses are always looked at as bad guys with deep pockets. A non-profit doesn't have the "greedy business" stigma.

 

[rburke65]

You had better be certified and insured.

 

[OverkillYJ]

You had better be certified and insured.

That is what I am thinking. LOL

On a side note my wife is an MBA and an accountant who specializes in Non-Profits. Unfortunatly she is not a lawyer which is why I started this thread. I will ask her about a club to cover my *** for friends being in my garage. I never thought of creating a club. The president and all that **** is just paperwork she can do so that is no biggie.

I really like all the input I am getting here. Seems like 100+ years of experience in one thread to help me figure out how to stop people from screwing me over for being a nice guy and letting them use my space.

The extra cash was a wish, but seems like a bad idea after reading all of this unfortunately.

 

[JimVonBaden]

What a sad world we live in if the responses on this thread are any indication.

I do a LOT of work with friends, but never take money. Even at that, based on this thread, I am risking everything.

Maybe we should all lock ourselves away and not ever have anyone over, or do anything outside the house.

Jim

 

[BillK]

if you get injured tell the ER/insurance people you were working on "your" car.

Sounds like insurance fraud to me

 

[csi123]

I dont want to be liable if they cut their finger off, or they don't put their vehicle on the lift correctly and it lands on them. I wouldn't know the first thing about how to create any legally binding type of waiver though either.

Basically you can't. If you want people to use your shop, regardless of whether you charge them a fee or not, you HAVE to make reasonable effort to make sure they don't get hurt. PERIOD. There is NO way around it.

 

[Glenn M.]

What a sad world we live in if the responses on this thread are any indication.

I do a LOT of work with friends, but never take money. Even at that, based on this thread, I am risking everything.

Maybe we should all lock ourselves away and not ever have anyone over, or do anything outside the house.

Jim

Totally agree. It is sad, especially when many of us have lived lives where we were only too happy to help others, even when we didn't "get something in return", just gave of ourselves.

 

[Jme128]

From a homeowner perspective, if you are "working with a buddy" then your home liability policy should step inQUOTE]



Call your home insurance agent and ask specific questions about doing a home business. More than likely you need a separate policy. Don’t take advice from GF as 100%

 

[01ssreda4]

You answered you own question. When push comes to shove this is a litigious society. I had an electritian family friend do some work in my business. He had told my Mother business was slow. I had him in to change a burnt balist and install a new light switch that cracked.

Guy fell off a ladder. My latter. He took it on his own
from my tool coral. He broke his leg. I was not there at the time. I called him to see how he was. He told me the latter was defective. I said what latter. He said your latter. i said why didnt you use yours. (He has one on the roof of his truck). No answer. I. got a law suit for a million bucks.

I had his insurance but still got sued for him not being able to do his wife and the wife sues for loss of affection.

So learn from my mistake. Btw. All latters and tool boxes are locked since that incident.

Protect yourself.

Wow that guy needs a big kick in the nuts. What a jackass.

IMO - work is where you make your money, friends are friends and doing stuff with them should not involve money beyond paying for supplies and buy each other a frosty beverage / dinner. If the projects for "friends" are not on that level and you are doing it to make money, then your basicly starting and under the table business....Not worth the risk, IMO - either start a legit business, or keep the projects among select true friends, not every person who claims to be a "buddy" and offers a few bucks just to get you to build their stuff for them / use your resources (shop / lift / etc).

Exactly. Our group works on stuff all the time together, lots of times at my place. We never pay each other. You sound like you want to make money. I say open a business, and keep it legit.

 

[rednecklimo85]

This thread is exactly why I never wanted to do side work... Now that my tools are retired I have even less desire to do side work... My tools are for my tinkering only, when I get the urge to tinker.

 

[Diesel Dan]

I did side work for co-workers while in WI for a few years. Filed a LLC and kept all receipts and filed taxes. Did not let anyone work on their cars or use my lift. Currently do not have a active LLC since we moved but I am considering it again.

Never had any issues with working with friends on stuff together, non-profit.
Knock on wood.....

 

[jimindm]

I like reading threads like this. You kind of get everyone's perspective of the people that we are in contact daily. I am not affiliated with any insurance company at all, but I have wondered if a personal policy would cover a hoist in the garage. I also think that even if it did, many are way underinsured.

I have a great insurance guy, and I ask a lot of questions when I need to. He has always said your insurance is only as good as your agent. He has proved that to me in the past. All in all, its what some claims agent thinks, most of the time.

You have asked the question, do you really want to try to camouflage what you really are doing? Just do it right to begin with.

Insurance is for people that have something to lose. I like what I have and I intend to keep it. You really have no idea how many times you open yourself up to lawsuits everyday, do everyday things. Be prepared for it and plan for it.

 

[SpiderGearsMan]

cottage industry in the shark tank of Lawyertown USA
don't do it