Retired and thinking of teaching out of my shop

[robert raess]

I am thinking of teaching woodworking ,wood turning, carving and wood finishing out of my shop.My question for those that are or have done this, is regarding insurance .Is it so prohibitive that it's not worth teaching?

I was thinking of maybe replacing my Unisaw with a Sawstop,maybe that would help get reasonable insurance rates.

Most of the classes would be hand tools, but tablesaw, jointer, router ,lathe and chopsaw would be used.

Finishing would be hand applied finishes.Shellac,waterborne finishes, milk paint, wiping varnishes etc.

What are some essentials in a start up like this, especially regarding safety and insurance ? Thanks Rob

[Mike Henderson]

I think the risk is in the insurance. I don't know what kind of insurance you'd need to get and what it would cost - I hope others post their experience here. I have taught a couple of people in my shop but prefer to teach at someone else's facility because of the liability issue.

Mike

[Peter Aeschliman]

Look into setting up an LLC as well. But probably worth spending a few bucks on a lawyer.

[Bill Conerly]

Talk to your insurance agent.

[Wayne Cannon]

It may depend on whether you are doing it as a business for profit.

When I planned to have high school kids working in my shop, my insurance agent suggested increasing the coverage on my inexpensive umbrella policy -- which remains inexpensive.

Public schools are a more lucrative target for lawsuits because of the city's (or county's) deep pockets, so I expect their insurance would be significantly more.

[Wayne Lomman]

Approach with planning same as any other business proposition. Put it all on paper and you will soon work out whether it is a business or a hobby. Either way, you will both look and be organised when you talk to an insurance advisor. As part of your planning, have safety procedures set out in detail and lesson procedures documented. All this makes you look like you know what you are doing which means lower risk and lower premiums. The bonus is organised well structured lessons that will get good reviews and watch it grow. Cheers

[Malcolm Schweizer]

I volunteer teach at a shop that helps troubled youth. It is a very rewarding thing to teach. I always say, "Knowledge not shared is lost."

Ask an agent about a blanket $1,000,000 coverage. Usually you can get one at a fairly reasonable rate. They may make requirements about safety. On Bad Axe Saws' Facebook page he has a video of a saw sharpening class and everyone is wearing full face masks to sharpen hand saws! Apparently the insurance company required it.

[Howard Rosenberg]

Robert, Wayne and Malcolm covered it.

My advice - do not skimp. This is a great idea that obviously means something to you. Do not try to save $400 on a consultation fee and be exposed to tens or hundreds of thousands of dollars in liability.

Go to good-quality professionals who are familiar with what you're trying to do. That is, a lawyer, accountant and insurance agent. Get their take on what you want to do. And don't be afraid of second opinions either.

But arm yourself with facts - not opinions or guesses.

Howard

PS - if you'd like, I can introduce you to an insurance specialist (not an agent) who knows insurance and woodworking businesses so he can help you clarify what you want to do and then introduce you to a good agent in your area.

[Jim Becker]

Yes, expert business advise is necessary from legal, insurance and accounting to do this "right" and insure (pardon the expression) that risk to you personally is mitigated. Doing this kind of thing in your home also changes the nature of insuring that property too in many cases...

[Ryan Mooney]

Doing this kind of thing in your home also changes the nature of insuring that property too in many cases...

That specific problem kind of killed a lot of ideas for me. Basically it ended up if I sell anything I have to insure the shop equipment with a business rider + extra liabilty rider or if there was any malfunction in the shop^wgarage my attached house wouldn't have been covered either. Once I added up all of the costs to satisfy everything required to make that all kosher (which ended up a bit of a rabbit hole on licensing, special use permits, getting written agreement of ~a dozen~+ "neighbours", etc.., etc..) I was looking at several thousand dollars .. per year.. which was very much not going to pay itself back at anything resembling an order of magnitude of my current rate of production so any concept of a bootstrap side business was just shelved. That was without ever having anyone ever come to the shop itself which would have raised the ins costs substantially more.

Of course this is very location and situation specific and your mileage will most definitely vary depending on where you are, how your shop is laid out in respect to everything else, etc.. etc.. so the suggestion of getting professional advice on your specific situation is very much on point.

If nothing else the investigation certainly opened my eyes on why a lot of people end up with a completely separate business in a completely separate location from their house property even when it would have naively been more cost effective to have run the same business out of a building on their own property (not saying its insoluble nor that it's as big of a problem everywhere, but..). Having a corporate entity to insulate you from the business can also help but is a rather bewildering maze of traps for the unwary that can make that effort mostly useless if you mess it up in some small detail.

At this point I don't even really let most friends come over to play in the shop because of the liability risk (and yes I have an umbrella of several $M on top of max'd home insurance, umbrellas are a cheap additional but you do have to max your home/car ins first - but hard experience says one small accident can consume the majority of even that in a heartbeat).

disclaimer: I'm probably overly paranoid because of previous personal experiences.

[Nicholas Lawrence]

This is a very important point. Simply getting an umbrella or increasing the amount of coverage is probably not enough. An awful lot of homeowners policies exclude coverage for business. This comes up a lot with home day cares for example. It does not do you any good to have $1 million in coverage, if it does not apply to the activity you are doing.

[Dave Stuve]

You could probably ease into this kind of venture a few ways:

1) make youtube videos - you'll reach a huge audience, could make money if you got popular, and your liability is almost zero
2) teach classes at a local Woodcraft or community college - you get to work with people, and again they handle the liability
3) teach out of your garage but start with the safest and cheapest to insure activities first - say focused classes like hand finishing, sharpening and tuning hand tools, repairing furniture finish, sanding and finishing, or reducing your sanding with hand tools
4) explore the possibility of 'demonstration' classes - you build something and explain what you're doing and they watch - nobody uses power tools except you, and maybe they get involved in hand sanding and finishing
5) be a traveling teacher - you go to people's shops and show them how to use their tools (we've all got that one tool we aren't good at)

Good luck, teaching and sharing your skills is a noble activity.

[robert raess]

That would be great Howard,regarding introducing to a tax specialist. Thanks for the offer and advice! Rob

[robert raess]

No i don't think you're being overly paranoid , it's the reality of the [litigious]world we live in! Thanks for letting me benefit from your own search,Rob

[robert raess]

Great points.Youtube is on my short list actually, thanks for the reminder! It's on my list to create alternative income streams. I like the traveling teacher ,that's outside the box thinking there.

[Robb White]

Where are you located? I would love to take lessons/club but there really is nothing close by closest being over an hour away.

-Rob

[Mark Bolton]

We looked into this several years ago at the request of a lot of locals wanting to take woodworking classes. My lawyer wouldnt touch it with a 10' pole and made it pretty clear that even with boutique coverage, your never protected. You can set up and LLC yourself for a hundred bucks but unless there are multiple officers in the LLC your still going to lose everything because any lawyer who sees a single officer LLC is going to go after you personally rendering the LLC nearly moot.

Most hobby collectives I have spoken with since simply roll the dice and have about a 10 page safety plan and every individual has to pass a multi-page written exam followed by a lengthy supervisionary process before they are allowed to operate any tools on their own and even then there has to be an authorized individual in the shop overseeing it all. Those hoops would seem to discourage many potential customers (paying attendees) in that most just want to get to work asap and not sit through a class or two of written saftey info that they are paying for in the scope of their 6 week class.

Not trying to poo poo it the idea but we looked heavily into a multi-faceted class program. Woodworking, metal working, welding, pottery, stained glass, etc. and it seemed the liability for someone slipping on a snow covered sidewalk put the venture in the ditch, forget about losing a digit or sliver, or band saw cut, upper respiratory issue from dust, on and on.

[Howard Rosenberg]

That would be great Howard,regarding introducing to a tax specialist. Thanks for the offer and advice! Rob

I'll be my pleasure Robert.

Just to be clear the person I'm thinking is an insurance specialist.

But I CAN recommend a great tax book written in a conversational style by an accountant that specializes in artistic businesses. She's accustomed to explaining hard-nosed facts to (gross assumption here) less-than practical people (artists!)

Lemme know.

Howard

[robert raess]

Sorry, Arizona.Prescott to be exact.

[robert raess]

Thanks for the input.I don't see how there any woodworking schools especially small ones.It's just a shame that someone can't teach what they know without risking the loss of house and home! Sad to see it has come to that.

[Roger Feeley]

I just don't see a way around the liability issue. I've let people make things in my shop but I hav strict rules.
1. I will never accept payment.
2. I am absolutely in charge. If I observe unsafe behavior, I expect you to stop and we will talk about it.
3. I will not make your project. I will happily spend twice the time to show you how to make it yourself.
4. I will not store your project.
5. The first project you make in my shop for sale is the last project you make in my shop.
6. Doing this stuff right takes time. If you are in a hurry, don't bother me.

no one has ever objected.

[Jim Becker]

Sorry, Arizona.Prescott to be exact.
A friend of mine who lived in the Prescott area before he passed away used to teach turning from time to time as that's what he was noted for. (He was a member of the arts guild in town, too) But that was a number of years ago. I think it's become a lot more difficult for individuals to do this these days because of how insurance and litigation have trended around such things. Protecting yourself and your assets can be more of a challenge now accordingly.

[Edwin Santos]

Sorry, Arizona.Prescott to be exact.

If you don't mind the occasional drive to Phoenix, you should check out Southwest School of Woodworking if you have not done so already. It's a humble little upstart woodworking school that's been going for about 3-4 years. They have a nice shop, bench room, finishing room. Talk to Raul, the director/owner there and see if you can teach a few classes to get a little teaching under your belt. If you like it, you could either get involved with the school or try any of the ideas that have been mentioned here.

For anyone else here that might be interested in classes, Southwest School of Woodworking has brought in some master woodworkers with national reputations in addition to some fine local instructors, so if you ever want to get out of the snow for a woodworking retreat, check it out. I've taken a few classes there and always come away a better woodworker.

[Patrick Kane]

This may be idiotic, because im no attorney, but wouldnt signed waivers from students reduce your liability? Have an attorney draft a student contract that indemnifies you as much as possible, and shop that around to your insurance provider. Surely there is some way of doing this other than throwing your hands in the air and saying "liability is too high/everyone is looking to sue everyone else etc".

[Roger Feeley]

This may be idiotic, because im no attorney, but wouldnt signed waivers from students reduce your liability? Have an attorney draft a student contract that indemnifies you as much as possible, and shop that around to your insurance provider. Surely there is some way of doing this other than throwing your hands in the air and saying "liability is too high/everyone is looking to sue everyone else etc".

I hate to be a downer but it's not just the risk of losing a lawsuit, it's the risk of having to prepare for one. If someone sues you, you now bear the responsibility of drafting a response, going through discovery and perhaps a trial. This is why corporations and insurance companies settle rather than going through the expense of litigation.

My brother lived in Wichita, KS for some time and he had a friend that worked high up in Cessna. This guy told my brother about a lawsuit involving a plane they had produced 30 years prior. The owner retrofitted the plane with an extra gas tank from an aftermarket provider. The owner then allowed one tank to run dry and failed to use the correct procedure to restore power and crashed the plane. Somehow, he (if he survived) or his estate sued Cessna. The suit got thrown out almost immediately but it still cost Cessna over $350,000 to prepare. At some point, the manufacturers were driven away from the general aviation market because of the lingering liability for products they had made many years before. As I understand it, Congress passed some law that set a sort of Statute of Limitations on product liability and now companies are back in the GA business.

This is an extreme case but it illustrates my point that people can sue for any reason, real or perceived. The defendant must prepare a defense and must generally pay for that defense. Taking money for shop time suggest a standard of duty of care that is higher than just some beer buddy coming over on a Saturday afternoon.

I think the potential for profit has to be enough to cover the expense of liability insurance. I wouldn't budge on this until I had the insurance and waivers in hand.

[roger wiegand]

Talk to people who run or who have run similar schools in other parts of the country. A bunch of them have figured out how to make it work. (or have so few assets or prospects of assets that it doesn't matter to them).

It's worthwhile seeking out specialty providers who know and understand the risk profile of your particular business. Again, other teaches/schools should be able to provide references.

For reference, in MA the base starting price for any business general liability policy is about $800. It goes up from there!

[Jim Becker]

This may be idiotic, because im no attorney, but wouldnt signed waivers from students reduce your liability?
Your question is actually a good one...and something that comes up frequently in the equestrian world for folks who have boarding and/or lesson programs with horses. Even with most states having explicit "equestrian liability limitations" under the law and written waivers signed by legal adults consenting to the risk, any one and any facility can get sued and even be held liable if negligence can be proven. But as someone already pointed out, even if the person or facility prevails in court, the expense to defend and other cost factors (including time missing work to defend) can be substantial. So no matter how well crafted a liability waiver is, the world we live in provides ample opportunity to "lose" in someway, even while "winning" in the end. Sadly...

[Roy Turbett]

That specific problem kind of killed a lot of ideas for me. Basically it ended up if I sell anything I have to insure the shop equipment with a business rider + extra liabilty rider or if there was any malfunction in the shop^wgarage my attached house wouldn't have been covered either. Once I added up all of the costs to satisfy everything required to make that all kosher (which ended up a bit of a rabbit hole on licensing, special use permits, getting written agreement of ~a dozen~+ "neighbours", etc.., etc..) I was looking at several thousand dollars .. per year.. which was very much not going to pay itself back at anything resembling an order of magnitude of my current rate of production so any concept of a bootstrap side business was just shelved. That was without ever having anyone ever come to the shop itself which would have raised the ins costs substantially more.

Of course this is very location and situation specific and your mileage will most definitely vary depending on where you are, how your shop is laid out in respect to everything else, etc.. etc.. so the suggestion of getting professional advice on your specific situation is very much on point.

If nothing else the investigation certainly opened my eyes on why a lot of people end up with a completely separate business in a completely separate location from their house property even when it would have naively been more cost effective to have run the same business out of a building on their own property (not saying its insoluble nor that it's as big of a problem everywhere, but..). Having a corporate entity to insulate you from the business can also help but is a rather bewildering maze of traps for the unwary that can make that effort mostly useless if you mess it up in some small detail.

At this point I don't even really let most friends come over to play in the shop because of the liability risk (and yes I have an umbrella of several $M on top of max'd home insurance, umbrellas are a cheap additional but you do have to max your home/car ins first - but hard experience says one small accident can consume the majority of even that in a heartbeat).

disclaimer: I'm probably overly paranoid because of previous personal experiences.

You're not being overly paranoid. I had a similar experience several years ago when I hosted a church group in my wood shop. I knew that I risked not being covered by my homeowners policy if we sold anything we made so I drew up a waiver of liability form for participants to sign that also included a statement that they would not sell anything they made. I also didn't charge a set fee to participate but allowed anonymous contributions to be made to help defray expenses. On the advice of an attorney at the church, I notified my insurance company in writing of what I was doing. While my insurance company agreed that I wasn't violating the terms of my homeowners policy, they notified me that they would not renew my policy. Fortunately, another church member owned an insurance agency and I was able to get insurance.

[C Scott McDonald]

Can you teach at a woodcraft location? Might be a way to ease into it.