Insurance is the instrument that gives you the feeling of security when you don't have either the knowledge, power, or money to take care of things yourself.
In some countries or states, a form of insurance may be needed to cover any liability for a commercial establishment. A non-profit like a hackerspace is in between these legal entanglements. What you need to know is that whenever you exchange goods or currency for other goods or services (like entry fees), the law recognizes an implied contract. What is entailed in the implicit contract depends on what you've marketed.
It is not automatically implicit that you are accepting responsibility for the welfare and safety of grown adults, for example, if you've charged them nothing to be there and they let themselves into your establishment by their own free will. Nor is it expected that you are accepting responsibility for other people's children -- their adult parents are supposed to do the larger part of that (unless you've set yourself up, mindlessly, as a place for kids to do arcwelding and skillsaw projects). It's called being a guardian. Legally, their parents are their guardian. But if you've taken money from them, you are making an implicit contract with a minor and will probably be held responsible. This doesn't have to be restricted to minors. Disabled people under the guardianship of the State would also be in this category. As a courtesy, you should extend this responsbility to those who don't understand your language or items they may encounter.
But, generally speaking (wherever there is human law as opposed to kooky all-seeing-eye law), it is expected that if you open a space to the public, you are doing reasonable diligence to ensure it is safe for the general public to engage in the activities in which you advertise. However, in a nation like the US, where all are considered equal under the law (adult proprietor and visitors), that responsibility is split in half. Don't expect your insurance agent to inform you of these details, as they are in the business of making a profit, not advising you on the law.
A liability release form is one of two items you need to protect yourself and your organization, the other is simply doing your diligent best to ensure a safe place (like not leaving marbles all over the floor in front of your gantry crane or leaving out hazardous chemicals, etc.). Here's one example of Release of Liability which someone must sign before entering an area or using tools that are a safety concern. You can try that one. Both of these strategies, working together, are rock-solid ways to prevent litigation. If, having accomplished these items, you find yourself threatened with a court case, don't automatically get intimidated. These are sometimes power plays you have to work through. Instead, argue your ass straight about what I just said and how you maintained your side of any [liability]].
In some rare gray areas (like a broken drill press you were already informed about that cut someone), you can negotiate a percentage damage. Ask to see bills if they are getting aggressive. You have to match their aggression with your own intelligence, because that's how the system tends to "work" (i.e. by intimidating people into capitulating all of their hard-won (i.e. Revolutionary War, Constitutional Amendments of the 1700s) power over to the Bar Association).
Indianapolis, IN "Club Cyberia" hackerspace obtained Liability and Property insurance though Insurance Associates. $1,000,000 liability and $10,000 property for around $540/yr.
Christopher G. Conley, CPA
7255 North Shadeland Ave, Suite B
Indianapolis, IN 46250
Note: He can only quote insurance for people and companies in the state of Indiana.
- Use common sense and google to check out the category agents use to define your hackerspace. They will often take shortcuts and pick the first description which almost matches. Dump any agents who want to do this, they just want to make a quick sale. It will only cause you pain in the long run. Dallas Makerspace had their policy cancelled because of this.
- It's best if the agent completely understands your business, then calls the underwriter to verify they are classifying correctly.
- One of the big problems Makers Local 256 had when looking for insurance was explaining what we are to the insurance provider. Insurance companies seemed only comfortable with something that already had a template in their computer system. Explaining that we were a non-profit that made things but did not sell things really threw them for a loop. Eventually Maker's Local found an insurance agency that classified it as a Hobby Shop, which the insurance agents are used to. --Omegix 14:43, 27 October 2010 (UTC)
- Dallas Makerspace was told the following: "That isn’t correct... A “hobby shop” isn’t a makerspace it is a retail store that sells supplies to make hobbies. See definition of hobby shop from Hartford’s class guide: This classification applies to risks engaged in the sale of scale-model kits, craft kits, science kits, craft tools, art tools, and finishing materials. Publications related to these items are also sold. Baseball card shops are not eligible. Risks that sell toys and games with incidental sales of hobby & models are classed as 59511 - Toy Store."
- Arclight Hackerspace
- Dallas Makerspace was categorized: "Clubs-Civic, service or social" class code #41668
Types of Insurance
General Liability - Covers accidents resulting in bodily injury or property damage, which in turn led to demands for compensation by the victims. A scenario I repeatedly got from insurance agents was: If a visitor slips and falls, this insurance will pay the costs of defending yourself and paying settlements.
- This type of insurance was required by our lease.
- It probably would not cover someone cutting off their arm while using a saw at your hackerspace. You may need operations liability insurance for that. Operations liability will cover: accidents "arising out of an organization’s ongoing or current operations or work (in a plant, at a jobsite, etc)"
Commercial Property - This type of insurance covers your belongings in case of theft, fire, and vandalism.
- It may not cover theft by members.
- Dallas Makerspace was required to have a burglar alarm for theft coverage (or reasonably priced theft coverage).
Mailing List Links
This is pretty much everything discussed on the mailing lists about insurance, and it only applies to the United States, and to some extent, Canada.
Make sure you click "Previous/Next Message", because not all messages are captured in the same threads for some reason.
- Hackerspace legal formation and insurance 
- US liability insurance recommendations?
- May 2010 Hackerspace legal formation and insurance (two separate threads). Several discussions, with several messages missing from the cumulative threads: 
- Insurance Recommendations for a US-based space?