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Business owners – What exactly is the statute of repose?

What exactly is the statute of repose?

Beware you may not like what you read here.
OK, that project is done; let the insurance lapse until we get another
job. Regrettably, this seems to be the attitude of many in the
construction – service business. Unfortunately, we are living in
extremely litigious times, and when there is an issue with a construction
site or a product defect, attorneys are diligently looking for anyone to
sue.

Enter the  statute of repose. The what?

According to uslegal.com, a statute of repose provides a date upon which
the action no longer exists, whether it has accrued by that date or not;
it entirely cuts off an injured person’s right of action even before it
accrues. It is a stricter deadline than a statute of limitations because
it may not be tolled by fraud, discovery of injury, etc.

Note the definition states the statute of repose is a stricter deadline
that the statute of limitations, which incidentally are different in every
state. (Click here for your state). If you are in go out of business; do
not think for a minute that once you are out of business you are immune
from a lawsuit from your past work.

If you were required to maintain a license; there is a reasonable chance
you can be hunted down and sued for something you did or failed to do
years ago.

First, if you are in business you must maintain a General Liability policy
without a lapse even through the slow times.

“Quitting the Business. What to do? This would be an excellent time you talk
with both your attorney and your insurance agent. If your business is sold,
acquired, or taken over by a family member have, your attorney draft into the
agreement that you become a director emeritus (for life). This way anything
that would come to haunt you from your past you will have defense and coverage
to pay a claim.

Going out of business is more problematic, you may be eligible to purchase
a discontinuation of operation policy. If that is not available it may be
advisable to maintain a minimum policy in force to survive the statute of
repose.

This entry was posted on Saturday, October 26th, 2013 at 2:24 pm and is filed under Commercial Insurance, Riskywire. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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