Insurance

[JudyL]

This is an article from the local TV station's web page from my home town in Louisiana which some of you who do not specifically have business insurance might find interesting. http://www.kplctv.com/Global/story.asp?S=2637704

Basically, this lady had an expensive ($17,000) organ that was ruined by lightning. The lady had a high amount for contents coverage because she has expensive musical instruments.

When the insurance company found out that she is paid to play the organ at two churches and sometimes practices on this home organ (she doesn't even use THIS organ for "business"), they have refused to cover it because they consider the organ to be used in business, which is excluded under their policy.

If you do not have business coverage, you probably are NOT covered! This is your machine, your computer used for business, batting, thread, quilts belonging to others, etc. It doesn't matter what your agent says (unless he puts it in writing), nor does it matter what you *think*.

PLEASE check your policies and be sure your investments are covered.

[Carolyn]

and excellent advice. Thanks for bringing this potentially serious issue to the forefront again. While I don't need this type of insurance, yet, when I do, I will ensure that this is covered, in writing.

I think this customer may have a potential lawsuit: you can 'practice' for business or pleasure, but since it is your 'own' time and not the company's [in this case the church], it is a personal item in your 'personal' space. I think her insurer is gambling here. What happens when you get your Millienium (or other APQS machine) and are just practicing until you go in business? Do you change coverage on the very day you state you're open for business? I'd be interested in knowing the outcome.

Carolyn

[JudyL]

What happens when you get your Millienium (or other APQS machine) and are just practicing until you go in business? Do you change coverage on the very day you state you're open for business?

I'm not an attorney or an insurance agent but I would recommend that if you have a machine and you are planning to go into business, you go to your agent even before your machine arrives, sit down with the agent or someone in their office who has authority! Tell them . . I have this machine I just paid $18,000 (or whatever it is) for and I'm going to go into business in maybe 3 or 4 months. For now, I'm going to be just practicing. Am I covered? If he says yes, present something to him that says: Suzie Q. has explained to me that she has a Millennium machine which cost her $18,000. She is planning to go into business in 3 - 4 months but will be practicing until then and will not be "officially" in business. I have assured her that the machine is covered until such time as she begins advertising for business (or whatever time "business" begins in his idea).

Make him sign and date something! If he won't sign it, you potentially have a problem.

You can get insurance coverage through Milne & Scali (something like that) for whatever amount you like. You can tell them you need $18,000 coverage and pay only for that amount. You set the amount of coverage you want.

[Guest Linda S]

I don't know how most of you feel, but when it comes to going up against a big insurance company, I'd feel I didn't have a leg to stand on, even if I thought I was morally and logically right. I didn't get my business insurance until I was ready to do customer quilts but, I'll bet you dollars to doughnuts that if anything had happened to that machine before I opened my business doors, I most likely would not have been covered. Insurance isn't cheap but it sure beats having to replace an entire machine.

Linda

[JudyL]

Another thing I was thinking about last night.

Before you're officially in "business", you've bought your machine and you're practicing. Are you planning on using your machine as a business expense for tax purposes? Have you submitted a business plan to your bank? Have you reserved a domain name for a web page?

Just be very careful . . if an insurance company will go to the extreme of saying that practicing on an organ makes it a "business", there's no telling how far they will go to prove you're in business.

You may remember that when we switched to Allstate back in the summer, the agent originally told me if I used my machine 50% for business and 50% personal, it would be covered. I asked for that in writing and he wouldn't do it. I pressed and he had an underwriter contact me. They told me that any time a machine of any kind has a replacement value over a certain amount (he said personally he checks anything over $5,000), they start checking to see if there's any business intent. I think what he really meant was . . if something is valued over $5,000, we start looking for a way to not have to pay!

Nothing is simple, huh?

[JulesG]

Hi...This is interesting and can be very confusing...BUT , I was told by my insurance agent that as soon as the INTENT is there to go into business and you have the equipment that you INTEND to go into business with, you need business insurance! So of course I had my business insurance at least a month before I did my first paying quilt!! Better safe than have regrets and hassles later!!! Just my little FYI on the subject! And maybe these things differ from state to state...I live in Minnesota! Jule

[Carolyn]

. . .for these types of issues. I think the most important point, as Judy stresses, is to get whatever terms that you require, in writing! as soon as you get your machine. Even if they're not being used for business, I think the amount of these machines (and any other large items), is also outside the scope of content coverage, and must be insured separately on a rider.

As far as the insurance companies are concerned, unless specific coverage is in black and white, they automatically decline payment. The next step is up to the insured and, in two instances, I challenged the insurer's definition of a certain type of coverage (in two unrelated matters) and, in both cases, was successful. The insurance companies want us to feel 'confident' that we have all the coverage we need and then, coversely. feel 'intimidated' when we go to claim on that very coverage. The invaluable advice here, though, is that it's better to err on the side of caution and make sure the coverage specifics are in writing.

Carolyn