I currentle have two tanks that I service. They own the tank but they lease the equipment from me and I service the aquariums and stocl them. My question is: Do you have to have some kind of insurance or bonding to do this legally. I started a small service co 2 yrs ago and is slowly growing, I also sell reef products online. I am afraid that if there is a accident or something happens to one of the tanks am I responsible for damages.
Tank service business
- Thread starter artistreefer
- Start date
you should be bonded and insured to protect your a** against lawsuits
you'd be amazed at what can happen that folks will sue YOU over-whether your at fault or not
it's not legally required to service someone's tank, though
a contract prior to the work would also be a very good idea-one that specifically outlines what you're responsible for, and that also covers what you can be liable for
you'd be amazed at what can happen that folks will sue YOU over-whether your at fault or not
it's not legally required to service someone's tank, though
a contract prior to the work would also be a very good idea-one that specifically outlines what you're responsible for, and that also covers what you can be liable for
In my opinion, if you have insurance you then become a potential target for law suits. Put your money into a good contract.
That being said, be certain of your qualifications. If you don't know wht you are doing, please leave this to those of us who do.
That being said, be certain of your qualifications. If you don't know wht you are doing, please leave this to those of us who do.
Is your company a sole proprietorship, corporation or LLC?
If it's the former, I'd consider changing to S-Corp or LLC that way if "you" are sued, it's the company that gets sued, not you personally.
Liability insurance is a MUST.
And to really CYA, a personal umbrella policy should cover anything that falls in the cracks.
Remember, anyone sueing you has to prove your negligence, and that you had care, custody and control. If a flood happens 30 minutes after you leave a place, they may have a case. If it happens 10 days after you were there last, they aren't likely to prove that *you* did it. The person trying to sue you has the burdon of proof in that regard.
Failure to have liability insurance, in the event that you do have a whoopsie, can be devastating. We're all human
And yes, a good service contract is also a MUST. This can prevent frivolous law suits, since the client's responsibilities and yours are clearly outlined. My own contract has evolved over the years as people do stupid things, I have to create wording that spells it all out specifically... like when I advised a customer against putting a black-tipped reef shark in their NEW 210 (not that I'd put one in an old 210...).. they went out and bought one (I don't sell sharks), and it died 6 weeks later, and 13 days after our last service, they tried to blame us and threatened to sue.
They even refused to pay their bill. Once my collection agent got involved, any threat of a law suit vanished - and they paid their bill
Vitz is right - it's amazing how people will blame anyone and everyone else for their own ignorance. Even if said client had filed a law suit, 10 minutes on Google produced enough information to support my notion that the fish they bought against our advice, wasn't suited for captive life, and nothing we did or didn't do changed the outcome of its lifespan - in fact we probably helped keep it alive twice as long as the customer would have :roll:
Cover your assets. No matter how nice customers may seem, when the chips are down, many people *will* sue you if they think they have a shot at it.
Jenn
If it's the former, I'd consider changing to S-Corp or LLC that way if "you" are sued, it's the company that gets sued, not you personally.
Liability insurance is a MUST.
And to really CYA, a personal umbrella policy should cover anything that falls in the cracks.
Remember, anyone sueing you has to prove your negligence, and that you had care, custody and control. If a flood happens 30 minutes after you leave a place, they may have a case. If it happens 10 days after you were there last, they aren't likely to prove that *you* did it. The person trying to sue you has the burdon of proof in that regard.
Failure to have liability insurance, in the event that you do have a whoopsie, can be devastating. We're all human
And yes, a good service contract is also a MUST. This can prevent frivolous law suits, since the client's responsibilities and yours are clearly outlined. My own contract has evolved over the years as people do stupid things, I have to create wording that spells it all out specifically... like when I advised a customer against putting a black-tipped reef shark in their NEW 210 (not that I'd put one in an old 210...).. they went out and bought one (I don't sell sharks), and it died 6 weeks later, and 13 days after our last service, they tried to blame us and threatened to sue.
They even refused to pay their bill. Once my collection agent got involved, any threat of a law suit vanished - and they paid their bill
Vitz is right - it's amazing how people will blame anyone and everyone else for their own ignorance. Even if said client had filed a law suit, 10 minutes on Google produced enough information to support my notion that the fish they bought against our advice, wasn't suited for captive life, and nothing we did or didn't do changed the outcome of its lifespan - in fact we probably helped keep it alive twice as long as the customer would have :roll:
Cover your assets. No matter how nice customers may seem, when the chips are down, many people *will* sue you if they think they have a shot at it.
Jenn
It is a sole proprietorship. I have 25yrs exp. setup reef systems. I started out working for a pet shop in Los Angeles and moved to El Dorado Ark. Its a small town but is growing very rapidly so I thout I could take advantage of the business. There have been 6 new nice hotels built here in the last yr. But anyway I do have a contract with my customers but its not very detailed. So far nothing has happened but I'm sure it will. I did have a friend that I just advised on how to set his tank up and offered to help but he insisted on doing it himself and one while on vaction he had a power falure and the sump overflowed and cause a fire, He lost all live stock and a 240g. reef system. So it made me think about my customers. I thank you guys for your help and will be visiting here more often.
Hmm if the sump overflowed due to loss of power, it wasn't set up right Either the sump was too small for the water in the plumbing or there wasn't a back-siphon stop in the return line (or a check valve).
Or both....
You may want to consider the costs/advantages of incorporating. You can do it yourself - it cost me less than $100 to file my articles of incorporation, make the necessary legal notices, and buy my corporate kit. It's a small price to pay for "insurance" against somebody sueing me and taking what little personal property I have (my house). Like I said then if they sue, they sue the "company", not the "individual" even if it's a one-person corporation.
For example, IF you'd done that install, and IF he'd had the same failure, friend or no friend, he could possibly have taken you to court for liability. Not worth losing your house over... and even if you don't have personal assets, if they get a judgement it can be used to put a lien on future assets.
IMO it's a small investment to protect your interests. There are also tax advantages to incorporating too - but I'm not a CPA and I don't play one on TV.
Jenn
Either the sump was too small for the water in the plumbing or there wasn't a back-siphon stop in the return line (or a check valve).Or both....
You may want to consider the costs/advantages of incorporating. You can do it yourself - it cost me less than $100 to file my articles of incorporation, make the necessary legal notices, and buy my corporate kit. It's a small price to pay for "insurance" against somebody sueing me and taking what little personal property I have (my house). Like I said then if they sue, they sue the "company", not the "individual" even if it's a one-person corporation.
For example, IF you'd done that install, and IF he'd had the same failure, friend or no friend, he could possibly have taken you to court for liability. Not worth losing your house over... and even if you don't have personal assets, if they get a judgement it can be used to put a lien on future assets.
IMO it's a small investment to protect your interests. There are also tax advantages to incorporating too - but I'm not a CPA and I don't play one on TV.
Jenn
jenn,JennM":r16rgwvj said:
you might want to double-check your limits of liability (btw good idea to get liability insurance) for a corporation/corporate officer/owner with an attorney.
i'm assuming you're an S-corp, and afaik that still nets you (the lone shareholder/officer) unlimited liability.
iirc, even for an LLP or LLC, the managing partner still retains unlimited liability. it's the non-managing partners that are limited in their liability (limited to what they invested into the entity).
there are benefits to being incorporated (tax and operational) but limiting liability for the principals isn't one of them. yet another goodie my father left for me. :x
double-check with your attorney as laws vary state to state (mine being NJ). liability insurance is a very sound investment though. whether for business or just in life as an additional layer of protection (over auto, health, home, and general 'oopsies!' incidents, i'm not an insurance salesman btw). but ime, liability insurance is relatively cheap (compared to the alternative that is).
there are ways around the liability problem though but that requires the legal voodoo that attorneys doodoo. (e.g. trusts, spouses, holding companies, etc.)
Hey Jenn just wondering how long have you been in business. Also on the tanks that you service do lease equipment? One customer has a 125 gallon tank and wants me to service it but does not want to purchase all the equipment for a reef system. We have come up with a contract where I will lease them what they need so I am responsible for the equipment but if they decide not to keep my services after a year they return everything but the aquarium. Does this make sense to you? What they are willing to pay each month alll the equipment will be paid for in about 6 months, and will sign a 12 contract.
My store has been in business for 4 years. I worked in the trade before that, and have been maintaining tanks myself (or now I have 2 technicians that do it, I help sometimes) for 5.
No I don't lease equipment. I did do a "loan" of sorts to 2 movie theaters when they wanted to do a promotion for "Shark Tale". What I learned is that when people don't own the equipment and have to pay for it themselves, they don't respect it. The 2 tanks I outfitted came back horribly scratched. We maintained those tanks also, and I can't tell you some of the CRAP I found in them ... everything from popcorn to hot dog pieces to coins. Luckily nothing died as a result of this, they were FOLWR tanks with a few hardy fishes... but I'll NEVER do anything like that again. I was hoping for some good PR/advertising from the deal but that didn't do much either. Nobody came rushing in to buy a system from me because they saw one of mine in the movie theater. I do get good residuals from other tanks we maintain in public places though, like doctor's offices, veterinary offices, and the like.
If they don't want to own the equipment, I'm not interested. Besides if at the end of the contract they decide not to continue in the hobby, you're stuck with a bunch of depreciated equipment, and unless you're charging enough to cover the initial costs of that equipment, you end up losing money on it. No thanks.
Jenn
No I don't lease equipment. I did do a "loan" of sorts to 2 movie theaters when they wanted to do a promotion for "Shark Tale". What I learned is that when people don't own the equipment and have to pay for it themselves, they don't respect it. The 2 tanks I outfitted came back horribly scratched. We maintained those tanks also, and I can't tell you some of the CRAP I found in them ... everything from popcorn to hot dog pieces to coins. Luckily nothing died as a result of this, they were FOLWR tanks with a few hardy fishes... but I'll NEVER do anything like that again. I was hoping for some good PR/advertising from the deal but that didn't do much either. Nobody came rushing in to buy a system from me because they saw one of mine in the movie theater. I do get good residuals from other tanks we maintain in public places though, like doctor's offices, veterinary offices, and the like.
If they don't want to own the equipment, I'm not interested. Besides if at the end of the contract they decide not to continue in the hobby, you're stuck with a bunch of depreciated equipment, and unless you're charging enough to cover the initial costs of that equipment, you end up losing money on it. No thanks.
Jenn
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