Domaining Business, Structure and Insurance

[slumbum]

Is there such a thing as insurance for domainers?

I'm setting up my LLC, and I am getting liability insurance for my web design business. I am thinking of including my domaining business as part of what I do. Are there points I should consider?

Thanks,
ej

 

[DaddyHalbucks]

One thing I would ask your lawyer about is TM infringement liability. Do all you can to minimize it.

 

[Domagon]

In my view, I'd suggest keeping your domaining business separate. That doesn't necessarily mean you need to create another LLC; putting them in your personal / dba name may be sufficient. Point is keep the web design business separate from the domaining part.

In the web design business, disputes are likely to focus on web design not being what the client expected, disagreement over the price, and issues relating to updates.

If you are also providing webhosting and/or ecommerce solutions, the common disputes involve lost data, website downtime, design flaws / programming errors, and client's lost business due to any of those reasons, and/or others that are totally outside of your control - ie. client has FTP access and uploads an update on their own that causes their website to malfunction ... it's their fault, but often the client, often out of sheer ignorance, will blame the webhost provider for any problem that occurs.

A well drafted contract that clearly specifies what you provide and what are you aren't responsible for is critical - you can likely find free / inexpensive boilerplate web design / web hosting and related contracts to use. I'd suggest seeking those out so you have something to use right away, as well as getting an idea what such contracts often include, before contacting an attorney to fine-tune them to your specific business. In short, a set of well drafted contracts will go a long way to reducing your liability exposure.

Ron

 

[DaddyHalbucks]

In my view, I'd suggest keeping your domaining business separate. That doesn't necessarily mean you need to create another LLC; putting them in your personal / dba name may be sufficient. Point is keep the web design business separate from the domaining part.

In the web design business, disputes are likely to focus on web design not being what the client expected, disagreement over the price, and issues relating to updates.

If you are also providing webhosting and/or ecommerce solutions, the common disputes involve lost data, website downtime, design flaws / programming errors, and client's lost business due to any of those reasons, and/or others that are totally outside of your control - ie. client has FTP access and uploads an update on their own that causes their website to malfunction ... it's their fault, but often the client, often out of sheer ignorance, will blame the webhost provider for any problem that occurs.

A well drafted contract that clearly specifies what you provide and what are you aren't responsible for is critical - you can likely find free / inexpensive boilerplate web design / web hosting and related contracts to use. I'd suggest seeking those out so you have something to use right away, as well as getting an idea what such contracts often include, before contacting an attorney to fine-tune them to your specific business. In short, a set of well drafted contracts will go a long way to reducing your liability exposure.

Ron

Beware of legal advice from non-lawyers.

My guess is if you want to protect yourself, you'll want to protect yourself more from the domaining business than the web design business.

For example, under the anti-cybersquatting law your liability can top $100,000 PER DOMAIN.

My guess is your contract for web design services limits your liability to monies received.

The main point is to separate your personal property (house, car, bank account, spouse's assets) from your business liability. A DBA is exactly how you get sued for everything you own.

 

[Domagon]

The domaining business, unless the OP is going out of his way to cybersquat, is relative safe compared to the web design business.

To be clear, my point to the OP is first focus on setting up his web design business separate from everything else.

Putting various types of businesses all in one entity comes with its own risks - and conversely, having a separate entity for every type of business one does can add a lot of complexicity and cost.

In regards to my comment about personal ownership / dba for his domains, that may be fine depending on the value / nature of the domains he has, at least for the timebeing.

And finally, potential liability for a web design business can be far more than what the client paid (ie. failure / improper licensing of content, such as stock images), and the liability exposure even moreso, if the services provided include web hosting, programming, and ecommerce (ie. a hosted shopping cart, credit card processing, etc).

Ron

 

[DaddyHalbucks]

The domaining business, unless the OP is going out of his way to cybersquat, is relative safe compared to the web design business.

I DISAGREE. YOU CAN EVEN GET SUED FOR "COMMON LAW" TMs.

To be clear, my point to the OP is first focus on setting up his web design business separate from everything else.

AGAIN I DISAGREE. THE MAIN POINT IS NOT TO SPLIT YOUR BUSINESSES, THE MAIN POINT IS TO INSULATE YOUR PERSONAL ASSETS.

Putting various types of businesses all in one entity comes with its own risks - and conversely, having a separate entity for every type of business one does can add a lot of complexicity and cost.

YES, UNLESS THEY ARE BIG BUSINESSES, IT MIGHT BE HARD JUSTIFYING A SEPARATE ENTITY FOR EACH BUSINESS.

In regards to my comment about personal ownership / dba for his domains, that may be fine depending on the value / nature of the domains he has, at least for the timebeing.

I DISAGREE. THAT'S HOW YOU GET SUED PERSONALLY.

And finally, potential liability for a web design business can be far more than what the client paid (ie. failure / improper licensing of content, such as stock images), and the liability exposure even moreso, if the services provided include web hosting, programming, and ecommerce (ie. a hosted shopping cart, credit card processing, etc).

NOT IF YOU HAVE A GOOD CONTRACT.
HAL