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Re: How To Pull The Plug
Old 05-18-2005, 01:08 PM   #21
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Re: How To Pull The Plug

Al,
Re the liability insurance, I think that is right -- personal liability won't cover business. However, the miracle of 'the corporation' was invented expressly to limit personal liability. In rare cases, the corporate veil can be 'pierced' but it should not be a problem if the product is owned and operated by a bona find company (perhaps an LLC). Then only the assets of the company would be at risk. You make sure the company's only real assets are the software itself.

I know it isn't perfect, but business people have been dealing with this issue for centuries and that's what the corporation is for. If you get really worried, shell out the $800 for business liability peace of mind. Worth a couple trouble calls a year?



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Re: How To Pull The Plug
Old 05-18-2005, 01:21 PM   #22
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Re: How To Pull The Plug

Thats correct. If someone comes after you personally though, you want the umbrella liability. Anyone who is ER'ed or has considerable (over $250k) in liquid assets that doesnt have at least a $1M liability policy is simpy crazy.

Considering the income level you're getting from your product, the $800 to cover liability suits on it also seems very reasonable.
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Re: How To Pull The Plug
Old 05-18-2005, 01:41 PM   #23
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Re: How To Pull The Plug

Al, the type of insurance you likely need as a software company is errors and omissions insurance. After all, you aren't likely to cause personal injury to someone. E & O insurance can be pretty inexpensive. Talk more to your agent about what you need.

Having a corporation or LLC might not protect you from personal liability if you personally designed the software and it was your error that caused the problem. People are always liable for their own negligence. [edit--the E & O insurance will insure for your negligence]

I mentioned before the importance of having a software license which limits liability and limits warranties. I hope you have one. Liability limitations should exclude claims for incidental or consequential damages and should be limited in amount to no more than what was paid to you under the license. Warranties should be limited in time and to a remedy of repair or replace. See someone if you don't have a license.
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Re: How To Pull The Plug
Old 05-18-2005, 03:38 PM   #24
 
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Re: How To Pull The Plug

Yes, I have the standard disclaimer when they install (below).* But in this anybody can sue anybody for anything world, I sometimes get worried.*

Code:
THIS SOFTWARE AND MANUAL ARE SOLD "AS IS" AND WITHOUT WARRANTIES AS TO PERFORMANCE OR MERCHANTABILITY. THE SELLER'S SALESPERSONS MAY HAVE MADE STATEMENTS ABOUT THIS SOFTWARE.* ANY SUCH STATEMENTS DO NOT CONSTITUTE WARRANTIES AND SHALL NOT BE RELIED ON BY THE BUYER IN DECIDING WHETHER TO PURCHASE THIS PROGRAM.

THIS PROGRAM IS SOLD WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES WHATSOEVER. BECAUSE OF THE DIVERSITY OF CONDITIONS AND HARDWARE UNDER WHICH THIS PROGRAM MAY BE USED, NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE IS OFFERED. THE USER IS ADVISED TO TEST THE PROGRAM THOROUGHLY BEFORE RELYING ON IT. THE USER MUST ASSUME THE ENTIRE RISK OF USING THE PROGRAM. ANY LIABILITY OF SELLER OR MANUFACTURER WILL BE LIMITED EXCLUSIVELY TO PRODUCT REPLACEMENT OR REFUND OF THE PURCHASE PRICE.

The above terms constitute the entire agreement between you and Responsive Software with regard to the Software, and such agreement may not be modified except in writing and signed by both parties.* If any provision of this agreement is invalid or unenforceable under applicable law, it is to that extent deemed omitted and the remaining provisions will continue in full force and effect.* This agreement will be construed and enforced in accordance with California law.
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Re: How To Pull The Plug
Old 06-06-2005, 11:52 AM   #25
 
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Re: How To Pull The Plug

Quote:
E & O insurance can be pretty inexpensive.
It looks like this would cost me about $4,000 per year. So, since I'm only taking in about $70,000 per year, that's not so inexpensive for me.

The worst is that even if I pull the plug and retire, I'd still have to worry about that (and still pay $4,000 per year??).
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Re: How To Pull The Plug
Old 06-06-2005, 12:26 PM   #26
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Re: How To Pull The Plug

Hmm, first time I read this thread. I was waiting for dory36 to post "Burma Shave".

T-Al, what would be a ballpark price of your software business? Just a wild hare idea, and I probably can't afford it, but maybe..... It beats seducing bulls with wheelbarrows I'm sure.
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Re: How To Pull The Plug
Old 06-06-2005, 12:58 PM   #27
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Re: How To Pull The Plug

T-Al

Just saw this thread for the first time.....I would keep the software and limit support.

Co-founded a small software firm. We started off providing 24x7 phone support. ***24x7****!!! We initially thought it was critical. A few of the techs would have the support number forwarded to their cells at night and they would get woken up when someone needed help. Only happened a few times a month. Crazy, huh? Fortunately, we we only selling and serving U.S. users. Anyway, we found as we limited support, which we did over a few years, people really didn't seem to mind.

At any rate, based on this experience, and my own personal exp. with various software and hardware, I would recommend that you provide e-mail only support. Guarantee a follow-up time and be as responsive as you can. If you find you get someone that really needs hand-holding, get their number and call them. Don't give out your number. Ever. This worked for us quite well and customers were quite ok with it.

Regarding selling the business, do not go with one of the generic biz brokers unless you know them, or know someone (you trust) that knows them. Too many simply list the business on a few websites and do nothing else. I'm a registered rep at an NASD firm that does M&A transactions. We accept a handful of private clients and specifically target companies that would be interested in the business because its a good fit or because they are actively acquiring businesses. **It's a very targeted process.** If you have any questions about selling it, I'd be happy to answer. (not a solicitation, btw, we focus on companies worth over a few million - I just joined this board and DO NOT want to be viewed as "fishing").
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Re: How To Pull The Plug
Old 06-06-2005, 01:53 PM   #28
 
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Re: How To Pull The Plug

BigMoney,

My current thought, and don't hold me to this, is about $150,000. That's what I take in in two years with $0 spent on advertising. A company could make that back in one year if they released an upgrade version.

Arin,

Yes, I think I will go with the email-only-support pretty soon. Hopefully email support will also weed out some of the computer-illiterate users who account for 85% of the tech support requests.

But this liability stuff is worrying me right now, and I want to stop worrying about it.
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