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Thread: Can a corp avoid storefront liability insurance?

  1. #1
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    Can a corp avoid storefront liability insurance?

    Im thinking of opening up a rehersal studio in tampa. nothing too big, maybe 2 equipped rooms. I have almost all of the equipment. This is a VERY LOW initial investment type of venture (under 5k)

    So, i can find some space for perhaps 800-1000 a month. then id have some utilities as well.

    The thing that I am AVOIDING is insurance. IF I incorporate, will that protect me in the VERY unlikely event that someone gets hurt on premise? I read online that you can be liable as an individual even if you incorporate if you dont provide reasonable coverage. So sure, if I opened a gym or something where injury is possible, id be wrong. My logic is that nothing much can happen in a rehersal studio so if i can avoid this burden then why not? what if I only allow clients by appointment and require them to sign a waiver that they practice at their own risk?

    Finally, how much would basic ins cost and what is it called.

    Im trying to be crafty here

  2. #2
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    Quote Originally Posted by dickkotite View Post
    Im thinking of opening up a rehersal studio in tampa. nothing too big, maybe 2 equipped rooms. I have almost all of the equipment. This is a VERY LOW initial investment type of venture (under 5k)

    So, i can find some space for perhaps 800-1000 a month. then id have some utilities as well.

    The thing that I am AVOIDING is insurance. IF I incorporate, will that protect me in the VERY unlikely event that someone gets hurt on premise? I read online that you can be liable as an individual even if you incorporate if you dont provide reasonable coverage. So sure, if I opened a gym or something where injury is possible, id be wrong. My logic is that nothing much can happen in a rehersal studio so if i can avoid this burden then why not? what if I only allow clients by appointment and require them to sign a waiver that they practice at their own risk?

    Finally, how much would basic ins cost and what is it called.

    Im trying to be crafty here
    Avoiding insurance to keep your overhead down is a gamble. I'm assuming you're talking about general liability insurance? I'm not sure what the cost would be but I'd imagine the policy would be underwritten with a large % of the cost based on the types of activities occuring on premise. I'd imagine that your cost would probably be fairly low. My advice would be to definitely shop it around to several insurance brokers and get some cost estimates. Although your activities there may be considered low risk the last thing you want is a "slip and fall" lawsuit or any thing else along those lines. Waivers are a good idea but I don't think they're bullet proof - I'd probably consider them as a required addendum to your overal insurance program to protect yourself. As far as an organization is concerned I don't think you need to form up a Corp (S or C) - the costs and administrative overheads would probably be overkill for the operation you're describing. I'd highly recommend the LLC route as you'd still get personal liability protection with a much more streamlined legal entity for doing business. Just my $.02

  3. #3
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    Quote Originally Posted by dickkotite View Post
    Im thinking of opening up a rehersal studio in tampa. nothing too big, maybe 2 equipped rooms. I have almost all of the equipment. This is a VERY LOW initial investment type of venture (under 5k)

    So, i can find some space for perhaps 800-1000 a month. then id have some utilities as well.

    The thing that I am AVOIDING is insurance. IF I incorporate, will that protect me in the VERY unlikely event that someone gets hurt on premise? I read online that you can be liable as an individual even if you incorporate if you dont provide reasonable coverage. So sure, if I opened a gym or something where injury is possible, id be wrong. My logic is that nothing much can happen in a rehersal studio so if i can avoid this burden then why not? what if I only allow clients by appointment and require them to sign a waiver that they practice at their own risk?

    Finally, how much would basic ins cost and what is it called.

    Im trying to be crafty here
    I have real basic "Business Owners Liability" $500/yr. from Sentry.
    Includes:
    Bodily Injury
    Property damage
    Personal Injury

    I rent an office inside a building that overlooks a central foyer. I have a few clients visit occasionaly. If you have a true storefront I'm sure its more.

    Up here landlords insist you carry something. Mostly they worry about smashed windows!! You may want to check with landlord as to what they require. Mine needs a certificate of insurance from me every year.

    You may want "business interruption" insurance as well in case of fire, flood, theft, etc.

    I wouldn't recommend avoiding it though. All it takes is ONE nutjob to hurt themselves at you place (or just claim to) to make your life a living hell.

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