Mike, anyone who wants parts would be happy to sign any release of liability form you could throw their way. And again, how is anyone gonna trace a parts kit back to you? If I happen to die while diving and it happens to be because my regulator failed... who the heck is gonna say... he bought parts from Mike Ferrara so its his fault. Who is gonna know? It can't be traced because o rings don't have serial numbers. The kit packaging itself may be traceable, but would anyone save the package and tell their wife, if I die sue Mike Ferrara... here's the parts kit. You are a million times more likely to be sued because of work you did on a regulator than for parts, but you don't seem so worried about that. I'm not a business person, but if you are incorporated doesn't that mean that you cannot be helf personably liable if your business is sued, only the business itself? Also, in selling o-rings, parts, and service kits you are not providing any authorization for any person to do work on their equipment and thus don't violate your manufacturers policy and don't make yourself liable. You are only selling a handful of tiny little parts... there's no liability in that. You guys should just write up a release of liability form that says the buyer agrees that the seller will have no liability as a result of the purchase of any service parts and that the kits/parts are to be installed by a certified tech only.
Do You Service Your Own Regs?
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I've told you that.
You said that it was a liability thing, and a "dealer will lose his dealership" thing.
But now you say its not a liability thing (not that you couldn't get around it before) and you know its also not a dealer will lose his dealership thing (since parts don't have serial numbers, well, ok, other than the body of the regulator which might) and thus there would be no way to trace it back to you anyway.
See, finally, we get to the bottom line, don't we?
Its not about MANUFACTURERS locking people into dealers, its about DEALERS locking people into dealers.
Got it.
And thanks for the honesty.
But now you say its not a liability thing (not that you couldn't get around it before) and you know its also not a dealer will lose his dealership thing (since parts don't have serial numbers, well, ok, other than the body of the regulator which might) and thus there would be no way to trace it back to you anyway.
See, finally, we get to the bottom line, don't we?
Its not about MANUFACTURERS locking people into dealers, its about DEALERS locking people into dealers.
Got it.
And thanks for the honesty.
MY REASONS FOR NOT BREAKING THE RULES
Slow down. I risk liability without insurance and loosing my dealership.
Maybe they wouldn't catch me or maybe since I only order 20 kits a year I would stick out like a soar thumb. Also, most of the regs I service are Zeagle. That means for every kit I install I send in a kit for warentee. They know what I use.
This is also how Zeagle has cought dealers selling to online merchants. When a small dealer like me starts to order tons of stuff something is going on.
The insurance company doesn't care until there is a problem then they will know
THE MANUFACTURERS REASON FOR THEI RULES
I have said on many occassions that the reason I can only service the brands I sell is the manufacturer wants to force folks to frequent shops that display their stuff. We have gone over that in numorous threads. It was always in the context of why I can't service regs I don't sell. I have also explained that I have attempted to negotiate the ability to service brands other than what I sell to no avail. In order to do service I must buy a dealership. The insurance has also forbade me to service brands for which I am not authorized no matter where I get the parts.
Your problem getting parts and manuals doesn't even come close to mine.
I have also explained that a side effect of this is that the brands with the biggest online presance are the hardest for me to sell. That means that I can't support a dealership which means I can't service the stuff. This is the biggest reason we turn away service because the brands people most often buy online we don't service regardless of where they were bought.
I don't want to force anyone to come to me for service. In fact I expect to make an anouncement shortly that should convince you of that once and for all.
FOLLOW ME NOW...
THESES PRACTICES HURT ME BIG TIME BECAUSE I DON'T HAVE MANY BRANDS AND I DON'T HAVE THE BIG BRANDS. So... my service business is nonexistant. The same manufacturer policies that prevent you from doing your own prevent me from doing business.
Slow down. I risk liability without insurance and loosing my dealership.
Maybe they wouldn't catch me or maybe since I only order 20 kits a year I would stick out like a soar thumb. Also, most of the regs I service are Zeagle. That means for every kit I install I send in a kit for warentee. They know what I use.
This is also how Zeagle has cought dealers selling to online merchants. When a small dealer like me starts to order tons of stuff something is going on.
The insurance company doesn't care until there is a problem then they will know
THE MANUFACTURERS REASON FOR THEI RULES
I have said on many occassions that the reason I can only service the brands I sell is the manufacturer wants to force folks to frequent shops that display their stuff. We have gone over that in numorous threads. It was always in the context of why I can't service regs I don't sell. I have also explained that I have attempted to negotiate the ability to service brands other than what I sell to no avail. In order to do service I must buy a dealership. The insurance has also forbade me to service brands for which I am not authorized no matter where I get the parts.
Your problem getting parts and manuals doesn't even come close to mine.
I have also explained that a side effect of this is that the brands with the biggest online presance are the hardest for me to sell. That means that I can't support a dealership which means I can't service the stuff. This is the biggest reason we turn away service because the brands people most often buy online we don't service regardless of where they were bought.
I don't want to force anyone to come to me for service. In fact I expect to make an anouncement shortly that should convince you of that once and for all.
FOLLOW ME NOW...
THESES PRACTICES HURT ME BIG TIME BECAUSE I DON'T HAVE MANY BRANDS AND I DON'T HAVE THE BIG BRANDS. So... my service business is nonexistant. The same manufacturer policies that prevent you from doing your own prevent me from doing business.
I really, truly, want to believe you.
All I want to see is you, along with people like me, agitating to fix it.
Why do I set such a standard?
Because it - putting your money where your mouth is - is the only standard that means anything in this day and age.
Sorry, 'dem's 'da facts.
As for the insurance companies "preventing" you from servicing anything else, I've already explained how you get around that problem - several times.
All I want to see is you, along with people like me, agitating to fix it.
Why do I set such a standard?
Because it - putting your money where your mouth is - is the only standard that means anything in this day and age.
Sorry, 'dem's 'da facts.
As for the insurance companies "preventing" you from servicing anything else, I've already explained how you get around that problem - several times.
My-way
Contributor
Hi Genesis,
I have some experience with insurance companies and claims.
Whilst the following it not legal advice and may not be relied on as such it is my personal opinion.
Also please take this from the perspective of a person who is always trying to service their own kit (sorry Mike), I've only had a service once from a LDS in 1995 whilst I was living in Adelaide, South Australia (BTW the LDS was The Dive Shop on O'Halloran Hill for those in the know, used to be run by Wolf Seidel). Which was very good, cheap and freindly (though I think the shop has closed or changed hands now).
Mike's use of the phrase that his insurance company has "forbade" him or his business from selling him parts or from selling or servicing equipment for which he is not an authorised dealer is whilst not strictly correct is perhaps better described as inexact.
The reason why he services equipment (this is my assumption Mike, so feel free to correct it if it is wrong) for which he is an authorised dealer/service agent is because he is indemnified by his insurance company for those activities by the insurance company.
The reason why he does not sell or service equipment or sell spare parts to is because he is not indemnified by his insurance for those activities.
Further, it makes bad business sense not to protect yourself in the event of a incident that requires or is desirous of indemnity from an insurance company. Why should Mike or any other business operator leave themselves and their families open to such potential liability. For the sake of a $25 sale of parts they bear a potentially huge liability from any adverse claims made, not only in any sussesful award, if any, but also just the legal costs from mounting a sucessful defence can be enormous and what protection is there for the LDS against that. I am not sure about the US but security for costs against an individual is not an easy thing to do.
An LDS is not an insurer but just that an LDS.
How about this as a suggestion, you take out a policy of insurance indemnifying the person selling you any parts and service items, that names the person selling you those items as a person insured and being completely indemnified under the policy of insurance and see how you go.
Otherwise I thnk that you both will have to agree to disagree and move on.
Anyway,
Just my thoughts.
Where is that flame suit anyway, damn.
I have some experience with insurance companies and claims.
Whilst the following it not legal advice and may not be relied on as such it is my personal opinion.
Also please take this from the perspective of a person who is always trying to service their own kit (sorry Mike), I've only had a service once from a LDS in 1995 whilst I was living in Adelaide, South Australia (BTW the LDS was The Dive Shop on O'Halloran Hill for those in the know, used to be run by Wolf Seidel). Which was very good, cheap and freindly (though I think the shop has closed or changed hands now).
Mike's use of the phrase that his insurance company has "forbade" him or his business from selling him parts or from selling or servicing equipment for which he is not an authorised dealer is whilst not strictly correct is perhaps better described as inexact.
The reason why he services equipment (this is my assumption Mike, so feel free to correct it if it is wrong) for which he is an authorised dealer/service agent is because he is indemnified by his insurance company for those activities by the insurance company.
The reason why he does not sell or service equipment or sell spare parts to is because he is not indemnified by his insurance for those activities.
Further, it makes bad business sense not to protect yourself in the event of a incident that requires or is desirous of indemnity from an insurance company. Why should Mike or any other business operator leave themselves and their families open to such potential liability. For the sake of a $25 sale of parts they bear a potentially huge liability from any adverse claims made, not only in any sussesful award, if any, but also just the legal costs from mounting a sucessful defence can be enormous and what protection is there for the LDS against that. I am not sure about the US but security for costs against an individual is not an easy thing to do.
An LDS is not an insurer but just that an LDS.
How about this as a suggestion, you take out a policy of insurance indemnifying the person selling you any parts and service items, that names the person selling you those items as a person insured and being completely indemnified under the policy of insurance and see how you go.
Otherwise I thnk that you both will have to agree to disagree and move on.
Anyway,
Just my thoughts.
Where is that flame suit anyway, damn.
The problem here is that the insurance rubric is really not all that valid in the real world.
In the real world, if you get sued because someone gets badly hurt (or worse, killed) and its your fault (and sometimes even if its not really your fault!), all the insurance you can afford to buy won't do you a damn bit of good. Awards for that kind of thing are not measured in the hundreds of thousands of dollars, but rather often in the tens of millions, especially if the person who buys it is relatively young, has a family, has a six-figure job. Do the math; the lawyers do.
Consider that a young 'thang down here in Destin was just awarded something like three quarters of a million bucks - because she took her clothes off in front of an open window in her condo and some security guards watched with a pair of binoculars. She put on an exhibition of her body and got paid because some lecherous men saw her, through a window where SHE left the curtains open, and looked!
Now consider the guy who is making $100k a year, has two young kids and a wife, lives in a $300,000 house, is 30, on an executive "fast track" with a college degree and dies because your reg service sucked. You think that a million or two worth of insurance is going to do anything for you? You're smoking something.
That is why you incorporate.
It is why, if you are doing something risky, you incorporate more than once, and the risky things are partitioned away from the other stuff you do.
It is why, if necessary, you put all your personal assets in trust and basically make yourself "poor", just in case someone manages to pierce the corporate veil.
And you do all of this with expert legal advice so that in the event the smelly brown stuff hits the airmover you don't wind up in the poorhouse and lose everything - including your shirt.
Now once you do this, then this argument about indemnifying through some insurance company becomes pointless. Oh sure, you still have insurance. You need it, among other things, in case an ordinary disaster (as opposed to an extraordinary one) happens. Your building might burn down, a tornado might visit your town, someone may burgle your place of business some night, etc.
THAT is the purpose of insurance - protecting against things that would wipe you out as a business, but are quantifyable risks with quantifyable dollar amounts of harm.
Trying to protect against open-ended liability suits with insurance is a nice dream, and insurance salesmen will try to tell you they can handle it, but the truth is that they can't and won't. They won't write the limits and terms you really NEED to have slam-dunk protection, at least not for a premium amount you can afford. Only Lloyds handles those kinds of numbers, they don't do it for amounts you can afford to pay as a small business owner, and even they have some nice weasel-words in their policies - just enough to keep you awake at night.
Never mind that in a worst-case scenario the insurance company can actually cost you. How? In return for that insurance you give up the right to manage your own defense if you get sued, at least until the limits of insurance run out. Why is this important? Because if their limit of liability runs out you're already committed to their mode and method of defense and they walk away at that point - which might be completely different than how you would have done it. After all, they might have intended to try to settle for significantly less than your full liability limit - you, on the other hand, would probably prefer not to pay anything, especially if you think you're right.
My position on insurance when I ran my company was that its primary purpose was to cover ordinary business risks. While we had liability insurance (and there were plenty of ways to get killed or seriously injured in our shop and on the job!) keeping the firm and me personally safe from those risks wasn't the primary purpose of my insurance - that job was really one for proper corporate organization.
Anyway, I've said this before, and I don't expect to convince anyone who doesn't believe me. But I will argue that those who run a business and don't understand this need to spend a couple of hours with a GOOD corporate attorney - before they find out the hard way.
In the real world, if you get sued because someone gets badly hurt (or worse, killed) and its your fault (and sometimes even if its not really your fault!), all the insurance you can afford to buy won't do you a damn bit of good. Awards for that kind of thing are not measured in the hundreds of thousands of dollars, but rather often in the tens of millions, especially if the person who buys it is relatively young, has a family, has a six-figure job. Do the math; the lawyers do.
Consider that a young 'thang down here in Destin was just awarded something like three quarters of a million bucks - because she took her clothes off in front of an open window in her condo and some security guards watched with a pair of binoculars. She put on an exhibition of her body and got paid because some lecherous men saw her, through a window where SHE left the curtains open, and looked!
Now consider the guy who is making $100k a year, has two young kids and a wife, lives in a $300,000 house, is 30, on an executive "fast track" with a college degree and dies because your reg service sucked. You think that a million or two worth of insurance is going to do anything for you? You're smoking something.
That is why you incorporate.
It is why, if you are doing something risky, you incorporate more than once, and the risky things are partitioned away from the other stuff you do.
It is why, if necessary, you put all your personal assets in trust and basically make yourself "poor", just in case someone manages to pierce the corporate veil.
And you do all of this with expert legal advice so that in the event the smelly brown stuff hits the airmover you don't wind up in the poorhouse and lose everything - including your shirt.
Now once you do this, then this argument about indemnifying through some insurance company becomes pointless. Oh sure, you still have insurance. You need it, among other things, in case an ordinary disaster (as opposed to an extraordinary one) happens. Your building might burn down, a tornado might visit your town, someone may burgle your place of business some night, etc.
THAT is the purpose of insurance - protecting against things that would wipe you out as a business, but are quantifyable risks with quantifyable dollar amounts of harm.
Trying to protect against open-ended liability suits with insurance is a nice dream, and insurance salesmen will try to tell you they can handle it, but the truth is that they can't and won't. They won't write the limits and terms you really NEED to have slam-dunk protection, at least not for a premium amount you can afford. Only Lloyds handles those kinds of numbers, they don't do it for amounts you can afford to pay as a small business owner, and even they have some nice weasel-words in their policies - just enough to keep you awake at night.
Never mind that in a worst-case scenario the insurance company can actually cost you. How? In return for that insurance you give up the right to manage your own defense if you get sued, at least until the limits of insurance run out. Why is this important? Because if their limit of liability runs out you're already committed to their mode and method of defense and they walk away at that point - which might be completely different than how you would have done it. After all, they might have intended to try to settle for significantly less than your full liability limit - you, on the other hand, would probably prefer not to pay anything, especially if you think you're right.
My position on insurance when I ran my company was that its primary purpose was to cover ordinary business risks. While we had liability insurance (and there were plenty of ways to get killed or seriously injured in our shop and on the job!) keeping the firm and me personally safe from those risks wasn't the primary purpose of my insurance - that job was really one for proper corporate organization.
Anyway, I've said this before, and I don't expect to convince anyone who doesn't believe me. But I will argue that those who run a business and don't understand this need to spend a couple of hours with a GOOD corporate attorney - before they find out the hard way.
My-way
Contributor
Hi Genesis,
Nice reply, however, I disagree on some points.
Sorry mate I do work in the real world and it is insurance related and more particularly claims related.
If your insurance does not cover you to the limits of your anticipated insurance coverage them you are simply under insured. Btw if your insurance broker has blown you full of hot air about your coverage limits you have a claim against your broker.
IMO Incorporating once will suffice as the trust vehicle that you choose to use can most likely provide the assets and services to the risk entity.
"Now once you do this, then this argument about indemnifying through some insurance company becomes pointless. Oh sure, you still have insurance. You need it, among other things, in case an ordinary disaster (as opposed to an extraordinary one) happens. Your building might burn down, a tornado might visit your town, someone may burgle your place of business some night, etc".
I can not agree with this statement in particular. Because as a business owner why should I go through all of the time bother of having to re-establish a business because it ends up being wound up just because of a claim, substantiated or otherwise settled. Public Liability insurance runs to coverage in the 10s of millions in the ordinary case and top up insurance is available of course you have to pay a premium but hey thats business.
"Never mind that in a worst-case scenario the insurance company can actually cost you. How? In return for that insurance you give up the right to manage your own defence if you get sued, at least until the limits of insurance run out. Why is this important? Because if their limit of liability runs out you're already committed to their mode and method of defence and they walk away at that point - which might be completely different than how you would have done it. After all, they might have intended to try to settle for significantly less than your full liability limit - you, on the other hand, would probably prefer not to pay anything, especially if you think you're right"
As I said I am not sure about the various US jurisdictions but in my jurisdiction (Australia) an insurance company is not simply entitled to neglect the interests of an insured, there is ample case law on that point alone. Nor are they entitled to consent to judgment or admit liability on the part of an insured. As an insured is not entitled to prejudice the rights of an insurance company so an insurance company is not entitled to prejudice the rights of an insured.
But as I said in my post above agreement is hard to reach on these points. In the perfect world liability waivers would work and claims would only be made bona fide and on the merits.
But we don't live in a perfect world do we.
Nice reply, however, I disagree on some points.
Sorry mate I do work in the real world and it is insurance related and more particularly claims related.
If your insurance does not cover you to the limits of your anticipated insurance coverage them you are simply under insured. Btw if your insurance broker has blown you full of hot air about your coverage limits you have a claim against your broker.
IMO Incorporating once will suffice as the trust vehicle that you choose to use can most likely provide the assets and services to the risk entity.
"Now once you do this, then this argument about indemnifying through some insurance company becomes pointless. Oh sure, you still have insurance. You need it, among other things, in case an ordinary disaster (as opposed to an extraordinary one) happens. Your building might burn down, a tornado might visit your town, someone may burgle your place of business some night, etc".
I can not agree with this statement in particular. Because as a business owner why should I go through all of the time bother of having to re-establish a business because it ends up being wound up just because of a claim, substantiated or otherwise settled. Public Liability insurance runs to coverage in the 10s of millions in the ordinary case and top up insurance is available of course you have to pay a premium but hey thats business.
"Never mind that in a worst-case scenario the insurance company can actually cost you. How? In return for that insurance you give up the right to manage your own defence if you get sued, at least until the limits of insurance run out. Why is this important? Because if their limit of liability runs out you're already committed to their mode and method of defence and they walk away at that point - which might be completely different than how you would have done it. After all, they might have intended to try to settle for significantly less than your full liability limit - you, on the other hand, would probably prefer not to pay anything, especially if you think you're right"
As I said I am not sure about the various US jurisdictions but in my jurisdiction (Australia) an insurance company is not simply entitled to neglect the interests of an insured, there is ample case law on that point alone. Nor are they entitled to consent to judgment or admit liability on the part of an insured. As an insured is not entitled to prejudice the rights of an insurance company so an insurance company is not entitled to prejudice the rights of an insured.
But as I said in my post above agreement is hard to reach on these points. In the perfect world liability waivers would work and claims would only be made bona fide and on the merits.
But we don't live in a perfect world do we.
but "public liability insurance" for ordinary risks (e.g. someone slipping on your sidewalk) and the same kind of insurance for things like dive shops are two different things.
As for the shop being put on the line instead of allowing the insurance company to play it out, that's gonna happen anyway if you get sued. You think they'll stop with the corporation? Ha! They may not get anywhere else, but they'll try. At least here in the US they will. Everything and everyone will get sued. That's how its done around here.
This is why all this stuff about "public liability insurance" is fluff in the real world in the US. You can't buy the insurance you need for any amount of money you might actually have to pay the premiums to actually cover all of the risks for extraordinary events. Oh you can try, but you'll find out the hard way if the unthinkable happens that you bought perfectly good insurance, it just doesn't happen to cover all the exposures you needed covered.
For ordinary risks insurance policies are just fine. They're a necessary part of doing business. But when you talk about extraordinary events, the only defense that works is proper corporate and personal asset structure, especially for closely-held corporations, and you must do it BEFORE the event occurs.
Consider that Peter Hughes would have been SLAUGHTERED had he not done that homework before the Wave Dancer sunk.... As it was, the corporation survived just fine, and so did he personally. While many people have taken cheap shots at PH over his use of these organizational tactics, the fact remains that they're both legal and your best defense against being destroyed by a liability problem, whether you are at fault or not.
As for the shop being put on the line instead of allowing the insurance company to play it out, that's gonna happen anyway if you get sued. You think they'll stop with the corporation? Ha! They may not get anywhere else, but they'll try. At least here in the US they will. Everything and everyone will get sued. That's how its done around here.
This is why all this stuff about "public liability insurance" is fluff in the real world in the US. You can't buy the insurance you need for any amount of money you might actually have to pay the premiums to actually cover all of the risks for extraordinary events. Oh you can try, but you'll find out the hard way if the unthinkable happens that you bought perfectly good insurance, it just doesn't happen to cover all the exposures you needed covered.
For ordinary risks insurance policies are just fine. They're a necessary part of doing business. But when you talk about extraordinary events, the only defense that works is proper corporate and personal asset structure, especially for closely-held corporations, and you must do it BEFORE the event occurs.
Consider that Peter Hughes would have been SLAUGHTERED had he not done that homework before the Wave Dancer sunk.... As it was, the corporation survived just fine, and so did he personally. While many people have taken cheap shots at PH over his use of these organizational tactics, the fact remains that they're both legal and your best defense against being destroyed by a liability problem, whether you are at fault or not.
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