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.