Hi everyone--Happy Memorial Day! I hope that you don't think this to be a silly question. But since I am looking to start to sell used Lego on line, I am wondering if it is necessary for me to have some kind of insurance in case anything happens to someone who buys from me (small child choking etc..). I know it may sound silly, but you never know. Can anybody tell me what their thoughts are on something like this? Thank you

No. You don't need insurance

I don't even know if what you are talking about even exists.........pre paid legal maybe is the only thing that remotely comes to mind.

You're talking about business liability insurance. If you're concerned, your best bet would be to form a corporation or LLC, and that way the business would be sued in most of these types of cases (except in the case of gross liability by the owner, for example if you said in your ads, "Hey, buy this for two year olds! Totally safe and they won't choke!" instead of the disclaimer that you might use and LEGO does use on the packages you send people.

 

You can get a personal liability umbrella policy through some homeowners insurance policies, and a normal business policy like I have under my own personal name also offers some liability insurance that I could increase if I were worried - but keeping it under my own personal name, I'm always going to be sued personally, not just my business, so IF someone won a huge settlement beyond what my normal business insurance covers, I have no corporate or LLC umbrella to protect my personal assets.

 

I'm not worried about it, but if I were famous or worth more than 10 million, I'd probably look to incorporating just to keep some separation from a motivated scammer and a dumb judge.

Just another note: The nice thing about either an umbrella policy through your homeowner's insurance (if available) or a separate business policy with some liability covereage is that if you're covered for, say, a million dollars in liability, you are going to have a motivated lawyer from the insurance company on your side for the duration of that lawsuit. It's not going to be you and Joe Schlepperton Esquire (your cousin's neighbor's hairdresser's husband who took 10 tries to pass the bar and works for beer because you can't afford to pay him), it's going to be an insurance company shark who really, really, REALLY doesn't want to pay out a million of the insurance company's bucks and knows how to make that happen.

Umbrella is the way to go.  I have renters who do stupid things on my property and kids.  Both add up to problems and the single best solution is umbrella policy off home owners insurance.   It gives you piece of mind for all kinds of things including selling stuff via garage sales, on-line, Craig's list etc. 

 

I had a lady come on my proprty to remove lava rocks this weekend and the only reason I could have her working on my property is I have the umbrella policy to cover me in case she twisted an ankle or something whil doing the task.    IT is a few 100 more but even as a business expoense I write it off as part of the rental property expenses so it is one more layer of protectio nagainst society doing stupid things and looking to sue someone because they did. 

 

Legoray