Posted on 08/08/2005 6:19:03 AM PDT by robowombat
Teen forced to close fair booth Wednesday, August 03, 2005 - Bangor Daily News
Entrepreneur couldn't afford $5,000 for liability insurance
BANGOR - Sometimes an early start can help, but it doesn't always make the first part of the road toward success any less bumpy.
Ben Bustard, 17, found that out this week when he tried his hand at selling homemade toys at the Bangor State Fair.
The budding entrepreneur from Bucksport came up with the $100 he initially was told he needed for $1 million worth of liability insurance, but he shut his booth down Tuesday after the projected cost rose to several thousand dollars.
"It's frustrating because it's a product that I know sells really well," Bustard said Tuesday afternoon.
Bustard was selling Marshmallow Shooters, a type of blowgun made from PVC pipe that shoots small marshmallows, similar to the way a cork flies out of the end of a popgun.
He said that last Friday, the first day of the fair, he made about $700 by selling 70 of the toys for $9.95 apiece.
Fair officials initially let Bustard sell the homemade items while he was waiting for insurance approval.
After failing to get insurance through a rider on the city's policy, and then finding out his business could not be insured through his parents' homeowner policy, Bustard was faced with either paying a $5,000 premium for his own policy or having to close his booth. He chose the cheaper option.
"As a high school kid, I can't afford a $5,000 premium," he said.
Mike Dyer, director of the city-owned Bass Park, where the fair is held, said Tuesday that the shooters were not on the city's "do not insure" list, so he sent it to the city's insurer for approval.
The insurer, however, determined that a rider for Ben's business on the city's policy was not acceptable.
"It's the ultimate business lesson," Dyer said of the experience.
According to Bustard's father, Ken Bustard, the insurance cost was aggravated by the type of device his son was selling. Benjamin came across the shooter design on the Internet and, after building one, decided it would be a popular thing to sell, the father said.
"The challenge is that it is not an established product," Ken Bustard said. "The insurance thing made the whole thing impractical."
Benjamin bought the PVC piping in bulk, went through the necessary licensing paperwork, and invested $2,000 in making 500 of the toys, according to his father. He hoped to gross $5,000 over the nine days of the fair.
"He would have done well," Ken said. "He would have averaged 100 or so [sales] a day."
Benjamin said that "99 percent" of the response to his product was positive. After shutting his booth down Tuesday, he took a shooter with him when he visited a friend at a local hospital, where again the device proved to be a hit.
"Now I have nurses asking to buy some," he said.
The young businessman plans to do more research on insurance companies to see if he can find one with a cheaper premium.
He also plans to sell his remaining inventory by word-of-mouth and maybe at other upcoming fairs.
"It was difficult [to shut the booth down]," Ken Bustard said. "People really liked it."
Wise words.
He did, but the city kept raising the bar.
Your costs are not dependent upon the purity of your motives, the worthiness of your cause, nor your inability to generate revenue...
Not relevant to my point. In regards to the third point, it bears noting that he was making brisk sales and was generating revenue.
From my perspective, most business failures are caused by the entrepreneur's failure to estimate what revenue will be required to make the business a success.
In this case, it was a moving target. There was no way to estimate costs in the face of arbitrary cost increases.
The young blow-gun manufacturer should take the lesson to heart.
Except that he is liable to assume that it is not possible to start a successful business in the current regulatory climate.
She may be a bitch, but she's right.
She may be a bitch, but she's right.She is?
The quote is regarding the government forcing businesses to provide HillaryCare for all ...
She didn't/doesn't care that businesses couldn't/can't afford it.
So you and Hillary call that the right thing to do...
The kid should've had them built cheaper by some slave labor in China and with the additional profit margine he could afford the liability insurance.
>The elected officials in Bangor, ME are mean-spirited.<
And if they lost a $1 million wrongful death suit you would say they were incompetent.It is not the city officials job to provide insurance for small businesses.
Here we are on a beautiful island with a wonderful cove for kayaking and no boat rentals for visitors...
Good luck to the kid.
It IS our elected officials' job to control the urge to over-regulate. (BTW, If there were a lawsuit, insurance or not, the city would still be listed as a defendant.)
No, he didn't. He paid the premium for $1 million liability insurance, same as everyone else at the Fair. From the article:
The budding entrepreneur from Bucksport came up with the $100 he initially was told he needed for $1 million worth of liability insurance, but he shut his booth down Tuesday after the projected cost rose to several thousand dollars.
His product was not listed on the Fair's "do not insure" list, but "somebody" (could it be a Fair official with an agenda?) decided they needed a "legal review", knowing full-well that the invariable instinct of liability lawyers is to CYA and say "no" if they can dream up any possible liability scenario.
Of course there's no way to prove it, but I'm absolutely certain there was an agenda in play here. I'm also certain there were other far more dangerous products and exhibits at this Fair than marshmallow shooters, e.g. knives, tools (chainsaws, anyone, or even plain old drills, circular saws, etc.?) farm implements, and homemade foods or condiments.
>(BTW, If there were a lawsuit, insurance or not, the city would still be listed as a defendant.)<
But if the Vender had adequate policy limits the city would be indemnified.This is not a case of over regulation it is just city officials carrying out their fiduciary duties.Any landlord public or private would require the same thing.
>His product was not listed on the Fair's "do not insure" list, but "somebody" (could it be a Fair official with an agenda?) decided they needed a "legal review", <
Or somone read the insurance policy which is the binding document not the "do not insure list".
>>>You can have a perfect record and good insurance is still hard to obtain at a reasonable price. I feel for the kid. >>>
Yes, car insurance is getting really expensive. The closer you live to a large city, the more expensive it gets. I have GEICO and they do the best for my area. (and I don't even write with GEICO, but they beat my companies rates, LOL)
may be the difference betwên a state or county fair and a craft festival.
Or somone read the insurance policy which is the binding document not the "do not insure list".
Nonsense. Fair officials don't usually carry a copy of the policy around with them; they use the "list" which has been compiled based on either empirical data or obvious common sense. A common sense evaluation indicates that while any man-made implement is potentially dangerous, marshmallow shooters are no more dangerous than many other implements being sold at the Fair. Thus, the decision to consult the lawyers on something so simple shows either a lack of common-sense, or something else...
Furthermore, the lawyers did not say the item was unacceptable and that it should be added to the "do not inssure" list. They either just wanted more money, or arbitrarily picked a fee of $5000.00 which they knew would be prohibitive in order to shut the kid down.
Lawyers are not actuaries, and I'm certain that "the insurance policy which is the binding document not the "do not insure list"" did not contain any specific reference to marshmallow shooters. Where did that $5000.00 figure come from? Did they actually get it from the insurance company? Upon what actuarial data was it based. I'm not aware of any pattern or outbreak of injuries due to marshmallow shooters even though they are popular all over the country and thousands of them have been sold. If there had been any statistically significant data to indicate a risk, they should have just said the product was not acceptable at all.
As I clearly said in my previous post, it is not possible to prove these speculations. I further acknowledge that the Fair officials have violated no laws. I merely pointed-out they have shown a lack of common sense, and a lack of good faith.
Ah of course, just like muggers provide useful lessons in, ah, reality for the denizens of New York and Chicago.
He could sell the idea to a toy manufacturer. He'd make lots of money really fast, and wouldn't have to worry about that silly old insurance.
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