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Insurance for a studio space shared with a band (VVV reply!)

 
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Magnetic Services
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Joined: 17 Apr 2012
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Location: Milwaukee

PostPosted: Wed Dec 16, 2015 7:21 pm    Post subject: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

Come spring of '16 I hope to rent a commercial space to move my studio out of my house. I'm partnering with a very trusted person who will be paying roughly 1/3 of the rent for his band/project to be able to practice and record there (he is competent at recording himself).

My question is: how to navigate insurance for one space with two (or more) people's stuff in it? Should I be the policy holder and divide the premium between us? Should I get business insurance and he get his own renter's insurance? I have little experience with this but want to make sure we're insured. The space we're looking at now is on the lower level of a large apartment building with businesses on the 1st floor, but we are looking at many different places.
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vvv
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PostPosted: Wed Dec 16, 2015 8:11 pm    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

As a practical matter, IMNSFHO, you want one policy only, or at least want to use only one insurance company; trust me, insurance companies are masters at avoiding responsibility if given the opportunity to say, "no, it's up to them to pay."

You are not clear on your intentions and goals.

That said, commercial insurance is necessary if you are doing commerce, i.e., making money with/for/from others on premises, either through goods or services. And if the question is whether that is what you are doing is debatable, well, it's a an economic and judgment call, but seriously consider commercial insurance. If you are engaging in commerce, and have a substantial loss, the carrier, always looking for an out, may claim you violated the policy terms, refund your premiums (or not), and say "bye" if you have just renter's insurance.

You could, alternatively, decree one person is the main property lessee (with commercial insurance), and the other a sub-lessee and the latter have renter's insurance, sure, but ultimately that would likely be more expensive. If all of the "sub-lessee's" shite is separate but valuable, separate policies might be cheaper, but again, more difficult if there are eventual claims.

A decent agent would probably be able to advise you how to structure your application(s), and crucial representations therein, to be able to claim everything on one policy - the issue of insurability of of stock (mic's, etc.), for example, could be handled by simple lease contracts. Of course, I am addressing it as though you are sharing equipment, space, etc., and you truly trust your partner to always do the (relevant) right thing(s).

That said, trust is always great in future-sight, and often seen as a mistake in hind-sight.

Trust me on that. Twisted Evil

Small print DISCLAIMER: I'm just some opinionated dooshbag on the 'net, and I live in a different state with less beer and worse cheese and a crappier football team, and if it's real advice you want to foller and hold someone responsible for if it all goes tits-up, find a lawyer in your jurisdiction and give him lots of promises of future business and referrals as well as as little $ as possible, and under no circumstances rely on opinionated dooshbags on the 'net who you gave no $ to.
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The Scum
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PostPosted: Thu Dec 17, 2015 3:12 am    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

You might want to consider making the relationship a little more formal, too.

Who will sign the lease? What happens if one side or the other wants out?

There are a couple of obvious arrangements, and about a zillion other ways to structure things. The terms would include who insures what.

It could be a more rigid hierarchy - one party signs the lease, the other sublets under them. Some primary leases may not allow a sublease.

It could be a partnership, s-corp, or similar, with both parties having a stake in the whole venture.

You should also consider exactly what sort of insurance you need.

It sounds like you're asking about insuring equipment, which is a starting point. It's frequently called an "inland marine" policy. If the insurance rep doesn't understand the nature of the business, ask them how they'd insure a contractor's tools, whethere they're at the office, in the truck, or on the jobsite.

Many commercial leases will require the tenant to carry a liability policy, which also covers common areas of the building.

There are other types that may or may not apply, or be worth considering...flood, business continuance, etc, etc.
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A.David.MacKinnon
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PostPosted: Thu Dec 17, 2015 11:12 am    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

My studio situation is more or less what you are describing. It's a shared space used and payed for by three engineers. Here's what we do -

- The studio doesn't exist as a registered business. It is a shared space and we all run our own private businesses out of it.
- One of us is on the lease. The others are on a sublet agreement.
- The leaseholder has a policy to cover liability/fire/etc. We split the costs 3 ways.
- we split all the bills three ways
- We pool our gear. Anything in the studio is usable by the others. The owner is responsible for upkeep unless something is broken through neglect or miss-use. Upkeep and repair on the big items that we all use (mainly the console) are divided between the three of us.
- We each have our own insurance for our own gear.

So far it's worked really well. We laid out ground rules at the start of the whole thing and have stuck by them. When I signed on we drew up a contract and all signed it. Things have changed a little bit since then and we never amended the agreement but we all know the rules and it isn't a problem. There are a few drawbacks to this set-up but the best thing about it is that if anything happens and we have to pull the plug we're all free to take our stuff and go. No lawyers, no dividing up joint assets, etc.
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Magnetic Services
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PostPosted: Thu Dec 17, 2015 6:52 pm    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

Thanks for the responses! The cheese and beer are great here, but I could care less about the football.

To clarify some things:
-I will be making money from this, in a legit business sort of way.
-This will be a sole proprietorship. Other guy is just in it for a practice space.
-The other guy has his shit together and has no problem with signing a formal agreement.
-Building management seem very flexible; they would probably agree to my friend being a sub-lessee/altering the lease terms.
-I am mostly talking about insuring equipment against theft or damage by clients, but also obviously need to think about flood and fire and whatnot.

As always, answers generate more questions:
-Anybody know good resources for estimating costs, given the limited details?
-Anybody have any estimates from their own experience? I don't care if you're in a different state, etc... just a ballpark figure would be helpful. I know there are tons of variables.
-Anything else I'm not thinking of??
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vvv
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PostPosted: Thu Dec 17, 2015 7:18 pm    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

Aiight, my thought would be a commercial insurance policy, and fold yer partner's needs into that, probably via a lease contract for the equipment. Make sure you trust your agent.

Make sure the insurance policy acknowledges that you have a sub-lessee, who also uses the equipment and space.

Premium amounts are impossible to guess at, so many variables.

Do keep in mind, you can insure the space (fire, etc.) and its contents (differences between replacement and new costs are to be considered) and people within it (commonly called "liability"). You can also insure the results of/ability to complete your actual services - what is commonly called "business insurance".

Next, they'll try and sell you workers compensation insurance (not sure of that, WI mebbe is different than IL), and disability insurance, so mebbe do a little homework there if you want to be fully advised.

Hell, you can even have, usually as part of the business insurance, a provision covering your ability to pay rent, etc.

Insurance is such a fuckin' racket, but likely has to be to make it profitable. Me, I spent a cuppla hours this week dealing with BC/BS, and I'm ready to develop a drug addiction just to get the frustration dealt with, and my money's worth from the health policy.
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A.David.MacKinnon
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PostPosted: Thu Dec 17, 2015 9:00 pm    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

I'm in Canada so take anything I say with a grain of salt. I've got about 50K of gear insured and pay about $500/year. The liability/building insurance are on another policy held by my studio mate and I pay my share of the bill.
If you're in the musician's union you can likely get studio insurance through them (not from them but they likely have a deal with a provider). Same goes for your performing rights society - ASCAP or BMI. I have my insurance through the Canadian performing right society (SOCAN). They've got a group discount through Front Row Insurance.
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vvv
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PostPosted: Fri Dec 18, 2015 5:01 pm    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

A.David.MacKinnon wrote:
I'm in Canada so take anything I say with a beer.


Fixed that for you. Twisted Evil
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crandallwarren
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PostPosted: Wed Jan 06, 2016 11:15 pm    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

Hi All,

Don't want to hijack this thread, but... do any studio owners have any direct recommendations for an insurance provider?

I've been on the phone with a few now and as soon as I say the words "recording studio" or "location recording"-- they refer me to someone else...

C.
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A.David.MacKinnon
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PostPosted: Thu Jan 07, 2016 12:34 am    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

crandallwarren wrote:
Hi All,

Don't want to hijack this thread, but... do any studio owners have any direct recommendations for an insurance provider?

I've been on the phone with a few now and as soon as I say the words "recording studio" or "location recording"-- they refer me to someone else...

C.


If you're in the union or a member of a performing rights society (ASCAP, BMI) they may have deals with insurers. I got my insurance on a group discount through SOCAN (the Canadian performing right society).
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crandallwarren
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PostPosted: Thu Jan 07, 2016 5:22 pm    Post subject: Re: Insurance for a studio space shared with a band (VVV reply!) Reply with quote

[/quote]

If you're in the union or a member of a performing rights society (ASCAP, BMI) they may have deals with insurers. I got my insurance on a group discount through SOCAN (the Canadian performing right society).[/quote]

Yeah, good idea. I am an Ascap member. Both Ascap and BMI endorse MusicPro on their websites. Although, there seems to be divided opinions on MusicPro amongst the forums... Anyone here have any experience with them?
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