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PABizLawyer, Attorney
Category: Business Law
Satisfied Customers: 1170
Experience:  JD, 10+ years experience, business owner
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I belong to a specialized industry that involves business owners

Customer Question

I belong to a specialized industry that involves business owners and their employees (or independent contractors) to enter client homes while they are away to provide services. This is a responsible job, and typically, the businesses are insured and bonded and belong to one of the big trade organizations - others do not. I would like to start something similar to the BBB, but geared towards this industry - in order to become a member, a business would need to submit proof of insurance and bond, at least 3 letters of recommendation (notarized) and have their business and/or website verified. Various levels of membership can be obtained, but some minimums would be required. An emblem for display on advertising materials and on the website would be offered.   Are there any legal requirements (I am in Colorado) to start such an Association? Thanks.
Submitted: 7 years ago.
Category: Business Law
Expert:  PABizLawyer replied 7 years ago.

There is no "requirement" above and beyond the usual requirements to run a business.... (pay taxes, file returns, etc.) However, you should be careful not to mislead the public that it is a charity or not for profit seal of approval...


A good insurance policy is a must, and finding one that will insure you may take some doing... after all, if you "verify", then end users can sue for reliance.... This liability issue seems to be your biggest hurdle.



Customer: replied 7 years ago.
What type of insurance protects me when providing this type of service? And does it need to be disclosed to the individuals that beome members?
Expert:  PABizLawyer replied 7 years ago.

Well that's the issue.. You need a general liability policy and errors and omissions, and You may have to have it custom written, as off the shelf most policies probably won't cover you.....


Basically by "stamping your approval" on these people, you will be subject to suit if they do the things your seal suggests they won't do.. A plaintiff will argue you failed to vet them carefully enough, check out the references (should have known they were all relatives, etc.), or otherwise dropped the ball....


So what you do is find an insurance agent who does commercial policies, then he / she submits what you do to underwriting, then they give you an offer (or they decline)....

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