What are they going to take you ask?.... how about EVERYTHING YOU'VE GOT.
Product liability insurance is but ONE of the barriers to entry. Some of
the others are, having a good idea, developing your idea, making it
"manufacturable," packaging, having the money for molds, tooling, R&D, and a
production run.
IF for instance (a big if) a hardware store buyer is willing grant you an
audience and IF they are magnanimous enough to let you display your stuff -
on consignment - you have to have product liability insurance, "we don't
care if it's a putty knife."
At one time I too was interested in the original question of this thread
and called around to some kit manufacturers. I concluded, those I spoke with
didn't have product liability insurance .... they sell materials, you make
the product. That seems overly simplified.
Maybe, despite "the parade of imagined terribles" some things just don't
happen. However, it's easier to sleep at night if you are insured (I was),
just don't plan on making any money. I could have had an airplane.




"Kent Ashton" wrote in message
...
When there is no insurance, there is not much reason to sue. What are
they
going to win? Some epoxy, molds, maybe the rights to an airplane. Not
something most lawyers would find lucrative.
--Kent

From:
Organization: http://groups.google.com
Newsgroups: rec.aviation.homebuilt
Date: 23 Mar 2005 13:53:47 -0800
Subject: Industry question

My civilian employer is paying for me to get an MBA. As part of the
program, we design and evaluate mock business plans. As a pilot and a
builder, I naturally chose to do an airplane company as my project.
Once the other folks in the program realized that there really was such
a thing as a homebuilt airplane (I had to show them websites, they
thought I was making it up) they all got into it.

During the evaluations, some interesting points came up. One of the
most interesting was the issue of insurance, not for the builder but
for the manufacturer. I know that in the eyes of the FAA a kit
manufacturer is not the airplane manufacturer, that is instead the
builder.

But that is the FAA's standpoint, what happens when there is a crash
and the lawyers go after the kit manufacturer anyway? No one in my
program, including the professors, can imagine that kit manufacturers
are able to carry liability insurance--the cost would be astronomical.

So, I guess the meat of the question is-what are kit manufacturers
doing to cover themselves? Do they have liability insurance? Do they
self-insure? Are they just using liability waivers and going naked?

One the one hand, I can see going naked, on the other hand I can't
see an entire mini-industry without liability insurance. Van's maybe
yes, but what about all of the other guys?

I have made a couple of phone calls to a couple of makers, lest anyone
think that I am too lazy to find this out for myself. The two places I
called were not wild about discussing the whole topic, which I can
understand.

I then called a couple of insurance companies (commercial ones that do
high-risk stuff) and they said they probably wouldn't touch it,
although if they did the premium would be "staggering" the actual
word one guy used.

I hope that people will find this an interesting question, thanks for
any information anyone might have.

Matt McCoy