Shared Liability?

Business By CakesbyBecca Updated 12 Jul 2008 , 1:29am by indydebi

CakesbyBecca Posted 11 Jul 2008 , 5:12pm
post #1 of 8

I just got off the phone with our environmental health office and was told something that scares me a little. I found a kitchen that I can rent, so my next step is to have the county come out and inspect it. The county person said that I would then be put on the same permit as the owner and we would both be liable for anything that took place in that kitchen. I asked him if that meant that if something happened with her business I would be liable and he said yes. YIKES icon_surprised.gif ! Is there anything I can do to limit my liability in this regard? I don't want to be responsible for a stranger's completely separate business, just because we share a kitchen.


7 replies
JoAnnB Posted 11 Jul 2008 , 5:14pm
post #2 of 8

talk to you insurance agent. You will need your own liability insurance anyway.

LeanneW Posted 11 Jul 2008 , 9:30pm
post #3 of 8

hmm, I am in WA and I rent from an existing cake maker.

When I got licensed and inspected I got a permit based on "Subsequent pre-occupancy" it is a less intensive inspection that opening a new kitchen since it is already approved.

also I got my own department of helath permit, completely seperate. The only thing that is the same is the operating address.

ChrisfromNOLA Posted 11 Jul 2008 , 9:31pm
post #4 of 8

Yes I agree, I would talk to an insurance agent or even a lawyer. I have received a lot of wrong information from people (even city officials! icon_eek.gif ) along my path of opening a business.
This is a total guess ...but I would think that since you do not own the facility or the other business then you would not be liable for anything that they produced.
If you haven't already, it might be helpful to look into making your business a corporation, or LLC as an additional layer of protection. From my understanding, if someone got sick, they would have to sue your corporation and not you personally. Hope this helps, best of luck to you!

ChrisfromNOLA Posted 11 Jul 2008 , 9:41pm
post #5 of 8

Also, I was thinking that that the person from the health dept may have been meaning "liability" as in , for example: If the other business's equipment is not clean, or there are other health code violations, and that business gets written up for something, you will be responsible for that as well?

moreCakePlz Posted 11 Jul 2008 , 10:12pm
post #6 of 8

In a convoluted way I can understand how you would both be liable for anything that comes out of a shared kitchen. For example if the baking pans where scrubbed with rat poison rather than comet, how do you prove who was responsible? Baker 1 might have baked in the pan, but Baker 2 might have done the scrubbing on a previous day. (just a little morbid huh?)

Setting up an LLC and getting good liability insurance is a must. But just remember that neither an LLC nor a corporation will protect you from getting sued due to your own negligence. If you are delivering a cake and you run over the bridezilla, you will be sued and your personal property will be at risk regardless of you businessâ LLC or corporation status. The LLC and corporation protect your personal assets when it is your employee who causes the damage.

For example:
You run over the bridezilla, she will take your business, your car, your kidâs college fund, your IRA, etc.
If your employee runs over the bridezilla you will only lose the business, she canât touch your personal property.

Interesting tidbit: a 401K canât be seized as part of a law suit, but an IRA can. That is one of the reasons to keep a 401K with a previous employer and not roll it over into an IRA.

CakesbyBecca Posted 11 Jul 2008 , 11:14pm
post #7 of 8

WOW! Interesting info. I have noticed that even the people with the county don't always seem to know what they are doing. With several different people, I've mentioned what I want to do and I don't seem to fit in a real category so they get confused. I don't want a store front. I'm not selling from a website, but I'm not really a caterer either. Isn't great to be special icon_smile.gif


indydebi Posted 12 Jul 2008 , 1:29am
post #8 of 8

I had a friend who owned a restaurant and she got a violation because her dumpster lid was open. She complained to the inspector "....because I'm not the only one that uses that dumpster!" (It was in a small strip mall and evidently the mall provided dumpsters as part of the rent ...( I had to rent and pay for my own!) ..... and 2 or 3 businesses used one dumpster.)

The inspector told her, "If I'm inspecting the guy next door and the lid is open, then it's his violation. If I'm inspecting you, then it's your violation."

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