| 9:36 pm on Jan 4, 2008 (gmt 0)|
Only a lawyer can give you a correct answer to this question I don't want to be held "liable" for incorrect information.
Ask a professional you will find out there is a strong possibility yes you could be held liable....
| 9:38 pm on Jan 4, 2008 (gmt 0)|
This is why you need a tos disclaimer.
| 11:08 pm on Jan 4, 2008 (gmt 0)|
I'm not a lawyer so I'm only guessing here. Brett is absolutely right about posting a TOS disclaimer. The problem with the law is that if you make mistakes in the wording, it could get shot down. However, most of us don't have $200/hr to send to a lawyer (Who, in my experience may not really know what they are doing - remember, on average, lawyers lose 50% of the cases they take to court)..
Anyway, I include a disclaimer in the TOS that all use of the site is at the user's risk etc. If I post something that entails any risk, I usually mention something like, "please see our TOS which indicates that this info is without warranty and is to be used at your risk" or something like that.
Liability insurance isn't all that expensive in most cases and might be worthwhile as well as an umbrella policy. Also, if you are working as a corporation, you have some liability protection unless the 'victim' succeeds in piercing the corporate veil.
| 11:42 pm on Jan 4, 2008 (gmt 0)|
|Is my widget website at fault and more specifically can I be held liable? |
People can sue you for anything. They may not win, but it is expensive even if they try. Some possible solutions include:
1) Have a good disclaimer
2) Not have any assets. No one is going to sue you if all they can get is a an iPod touch and an Xbox.
3) Have appropriate business and personal insurance.
4) If you have assets protect them by shifting them to where they are exempt from creditors - ERISA protected retirement accounts, equity strip your home down to the homestead exemption in your state, annuities, etc. depending on the laws in your state.
5) Most important - Have your web sites owned and run by a business entity with limited liability, such as a corporation, LLC or LLP. That keeps your personal assets harder to get at if a business entity gets sued.
One interesting point to note is that when you change jobs most brokers and investment advisors will try to get you to roll over your retirement plans to an IRA, but from a legal standpoint you retirement money is usually much more protected left in a ERISA qualified 401K.
IRAs Could Be Fair Game in Lawsuits [latimes.com]
If you have a lot of web sites or other businesses you can have them owned by different limited liabaility entities. Then if you get sued personally or if one of the entities gets sued the assets of the others are generally kept legally separate.
[edited by: Jane_Doe at 11:44 pm (utc) on Jan. 4, 2008]
| 1:18 am on Jan 5, 2008 (gmt 0)|
Jane, I could be wrong but I think Congress closed that loophole. I know 401Ks--at least mine--is safe (being almost empty helps too ;))
| 2:31 am on Jan 5, 2008 (gmt 0)|
|I know 401Ks--at least mine--is safe (being almost empty helps too |
The latest major federal bankruptcy act only provides limited protection protection for IRAs if you are in bankruptcy proceedings. It doesn't override state law relating to IRAs in either state court proceedings or in non-bankruptcy federal proceedings.
Confusion with the New Bankruptcy Act:IRAs, Rollover IRAs, and Homestead [assetprotectionbook.com]
As far as 401Ks, it is my understanding that they are not accessible by creditors if they fall under ERISA rules because of the ERISA Anti-Alienation Provision. In order to be covered by ERISA the plan has to cover employees - a solo 401K that just covers owners like a husband and wife is not ERISA protected. There are also laws about who qualifies as an employee for ERISA protection. Some relatives count but others do not, though I don't remember the exact rules. (I hired an actuary to set up the pension plan for my company who explained all of this to me.)
ERISA and Retirement Asset Protection [finance.cch.com]
Many attorneys do not promote these methods for asset protection because they do not require any expensive attorney fees like setting up family limited partnerships or complicated off shore trusts. And many financial advisors don't tell people any of this because: 1) they don't know it themselves; and 2) they only have jobs by getting a hold of your money and they can't do that if you leave it in your old employers plan, roll it over into your new employer's plan or set up your own plan and trust and manage the money yourself.
[edited by: Jane_Doe at 2:43 am (utc) on Jan. 5, 2008]
| 3:59 am on Jan 5, 2008 (gmt 0)|
Thanks Jane. You are right. In theory one might have to file for bankruptcy to save his non-otherwise-covered 401k...if that is permited. If you have enough there for the judgment, they might say empty it and there is no need to file for BK.
No wonder lawyers need $500 an hour to figure this out :)
| 5:08 pm on Jan 7, 2008 (gmt 0)|
Thanks for all of the responses. I realize that "talking to a lawyer" is the best thing to do. Although I have no clue where to go to find a lawyer who is an expert in online business.
Of course my site will have a TOS, but that just doesn't seem very iron clad if some-one's "widget" were injured due to some advice from my site or forums.
I'm most likely going to go the LLC route, but I am so lucky as to be living in California where starting one up isn't exactly cheap (note this "widget" project is a start up and won't be making any money in the beginning).
Again, thanks for taking the time to reply.
| 11:28 pm on Jan 7, 2008 (gmt 0)|
I have a very strict policy which has kept me "judgment proof" for many years. The second I make a dollar my wife spends it, poverty is the best insurance against lawyers.
| 10:58 am on Jan 8, 2008 (gmt 0)|
As well as all the suggestions to reduce liability to company assets, remember that you are still personally liable if you as an individual are negligent. Many directors of LLCs with good insurance still get sued personally for such.
| 5:09 pm on Jan 15, 2008 (gmt 0)|
This is why you get advised to hire an electrician to change a plug.