Potential Liability Of The Professional Gunsmith

I have been licensed to practice law for almost four decades and have spent more than 27 years engaged in defending clients against claims for negligence, products liability, and worker’s compensation. These cases were entrusted to me by the insurance companies which provide coverage to my clients. Most of these insureds operate small businesses, though I occasionally provided representation to national manufacturing concerns.

Unlike most of my fellow practitioners, I have represented gunsmiths in litigation arising out of their business operations. My work on behalf of gunsmiths has been infrequent, probably due to the fact that the number of gunsmiths is relatively small compared to the other types of potential defendants, such as transportation companies, construction contractors, and appliance manufacturers.

In my particular case, my gunsmith clients were not sued by their customers for faulty work on firearms, but were the target of claims arising out of general activities one would find in any business enterprise. Later in this article, I will explain how the circumstances of the gunsmithing trade can converge to enhance the risk attached to those activities. Bear in mind that this article contains general observations and advice, and is not intended to serve as a substitute for consultation with your own attorney.

With that said, I believe that you will probably find it useful to discuss some of the ideas presented in this article with your own lawyer and with your insurance agent and insurance carrier. I have written this in the hope that it will provide you with some useful practical ideas, help you avoid suits, and perhaps assist you in securing a meaningful reduction of the premiums you pay for business related insurance.

I am an avid student of firearms technology and gun manufacturing and my interest in shooting, coupled with my legal background, eventually caused me to ponder the legal risks attendant on the gunsmithing profession. After partially retiring from law and greatly reducing my caseload, I found the time to investigate this issue. This article summarizes my findings.

The results of my inquiry were a little surprising to me, probably because my point of view was unduly influenced by the high profile, publicity-driven lawsuits brought against the firearms trade by interest groups dedicated to the elimination of private gun ownership. I started out with the impression that the greatest area of risk would lie in activity of repairing and modifying guns but the facts I uncovered forced me to adopt a different view.

This is not to say that you are immune from ruinous lawsuits based on the claim that you negligently repaired or modified a firearm, causing injury to a shooter or bystander. As a prudent business owner, you absolutely must purchase insurance to protect yourself against that risk. However, after careful inquiry I have concluded that you are at greater risk of being sued for reasons other than faulty workmanship on firearms.

For example, when purchasing insurance, do not neglect the potential of lawsuits based on "premises liability" claims. The term covers such things as suits based on the allegation that a customer slipped and injured himself due to a defect in the floor of your shop or that a client was injured when an improperly-installed shelf fell on him.

These claims may not generate the huge monetary award that could arise if a rifle fails and sends metal into a customer’s face, but slip and fall claims are much more frequent and the cost of defending them is substantial. My initial foray into this subject was very much conditioned by my habits.

I logged into my favorite legal research database and entered search terms which I thought likely to bring up any lawsuits in which claims were made against gunsmiths for faulty repair of guns or dangerous modifications to them. These results were not what I expected, but I later considered that research services of the sort I use to locate legally authoritative decisions are mainly directed at the opinions of appellate courts.

In most instances a case must be litigated completely in the trial court before it gets to appeal and the legal research services to which I subscribe are aimed at bringing me only the results of appeal proceedings. The vast majority of litigation is settled before trial and I could not accurately determine the frequency of lawsuits against gunsmiths, nor the basis for them, by searching the decisions of appellate courts.

Not only is it impossible to assess the types of suits being filed by looking at the output of the higher courts but the practice of looking only at cases which become public will

guarantee that an investigator never sees those matters which are settled before a suit has even been filed. An even more inaccurate result will be obtained by relying upon press coverage of legal cases. It is important to bear in mind that the media seeks out the most outrageous results the legal system generates, because outrageous sells.

I find that reporters usually fail to provide truthful follow-up on the cases they report, often omitting to reveal that shockingly lopsided outcomes are later overturned by higher courts. After searching for an effective way of assessing these risks, it finally occurred to me that I could use my contacts in the insurance industry to find out how insurers assess the liability dangers faced by gunsmiths.

All the gunsmiths I know are covered by liability policies and the premiums exacted from them are based upon the calculations of the insurance professionals known as underwriters. Insurance underwriters determine whether to provide insurance coverage and on what terms. They evaluate insurance applications and determine coverage amounts and premiums.

Most importantly for my purposes, their calculations are based upon the insurance industry’s experience in covering the risks incident to each category of enterprise it insures. To make a profit from insuring gunsmiths, an insurance company must accurately quantify the risk arising from every category of activity in which the gunsmith engages, and charge a profitable premium based upon those calculations. It is my good fortune to know some very patient insurance underwriters.

Most of what I learned is the result of their assistance to me, not the result of my own familiarity with underwriting practices.

Before going further, I think you will find it helpful if I provide a short explanation of what insurers mean by "risk" because it is under this label that they attempt to quantify what most of us call "bad luck." There are many highly technical explanations of this term but all of them come down to the same thing: For an insurer, the amount of risk associated with an activity is the aggregate amount of money that the company predicts it will have to pay out on behalf of a person engaging in that activity.

This prediction is largely based upon accumulated data for losses related to that particular area of activity but it can be adjusted for certain individual factors peculiar to the person or corporation insured. For example, your automobile insurer can predict with high accuracy just how much it will pay out in a given year on behalf of all the drivers it insures but your premium will increase dramatically when your sixteen year old son gets a license and is added to your policy.

The company keeps statistical records which prove that teenage males cause far more losses than their middle aged parents. Applying this concept of risk to a gunsmithing business, an insurer may conclude that the risk of insuring you for faulty repair of a firearm is lower than the risk presented by the possibility of injury to your employees. For example, let us assume that in any ten year time period, a business has eleven claims.

One claim arises out of injury to a shooter due to gun failure and the insurer’s payout is $100,000.00. The other ten are back injuries to employees caused by improper lifting and negligent use of machine tools, at $12,000.00 per claim, producing an aggregate payout of $120,000.00. For that period, employee injury is the greater risk.

Risk Assessment With this background, I will now relate what I learned from the insurance professionals I consulted, and offer some suggestions which could lower your risks, or perhaps even mitigate your insurance premiums. In determining how great a risk is posed by a gunsmithing operation, many of the potential areas of liability are connected to the question of whether or not the gunsmith is working as a one-man shop or has employees.

The presence of employees definitely makes things riskier from an insurer’s standpoint because it is assumed that employees will operate motor vehicles in the pursuit of their employer’s business interests, and may interact with each other and with customers, in ways that are less than fully responsible.

Overall, the risk from operating motor vehicles was regarded as slight, primarily because underwriters have noted that most gunsmiths receive their materials and parts through delivery services and are less inclined than previously to send employers out to retrieve items necessary to the shop.

However, this analysis can become significantly less favorable to the gunsmith in a particular case where employees are expected to make routine retrievals and deliveries, especially if they are expected to be available by cell phone while driving or if they are required to make trips on behalf of their employer to unfamiliar territory. The assessment also becomes less cheerful when insurers look at the employees’ propensity for hurting themselves, fellow employees, and customers.

The term "hurting themselves" obviously includes worker’s compensation claims. Self injury caused by laziness and inattention is a risk in any setting where employees are required to engage in lifting, repetitive motion, the handling of noxious materials such as varnishes and solvents, or operating powerful machinery. I have observed these last three areas of activity in the shops of gunsmiths who have performed work for me and I engage in them myself in my own home shop.

The underwriters consulted also pointed out that employees may have the opportunity to negligently wound themselves or others when testing customer firearms and this caused them a very high level of concern, a concern backed up by a documented history of such accidents.

The risk of property loss by fire is also directly related to the above mentioned varnishes and solvents.

I have never handled a claim arising out of fire damage to a gunsmithing operation but I have handled more than ten in my career in which contractors using wood finishing materials have burned down their own premises, one in which a floor refinishing company accidentally set fire to its customer’s office building when the fumes from an exotic varnish were sucked into the HVAC system and set off by the sparks from an open fan motor.

I cannot help but notice that fine woodworking is fine woodworking, be it a making a staircase or a gunstock, and many of the gunsmiths I know devote a large percentage of their time to stock finishing. If not judiciously managed, the presence of finishing materials creates a real hazard.

The fact that guns and ammunition are necessarily present at a gunsmithing site is a pervasive unique risk which, in the experience of insurance companies, magnifies the potential losses in the workers compensation and premises liability categories. In an ordinary shop, an employee can injure a fellow employee or a customer by dropping a hammer on his head. In a gunsmithing shop, the heedless employee can shoot another employee or a customer, a possibility which frightens insurance companies very much.

In their estimation, which is based on their claims experience, accidental injuries in gunsmith’s shops are more likely to be fatal than those occurring in other places of business, and even when not fatal are likely to be more serious. The possibility of an accidental discharge of firearms is bad enough but it is magnified dramatically when a gunsmithing operation is coupled with a shooting range, an arrangement I am noticing more frequently in recent years.

I believe that this business arrangement is still rare but it is common enough that insurers are identifying it as a risk of the gunsmithing trade. Be advised that if you enhance your firearms repair business by adding a shooting range, it will probably increase your income but do not expect your insurance premiums to remain reasonable.

Biggest Risk All of the risks identified above are deemed to be serious for underwriting purposes but they are exceeded by the most serious worry of underwriting professionals, which is the risk of criminal activity provoked by the presence of weapons and ammunition at an insured business. Criminals view guns as the tools of their trade and seldom acquire them lawfully. Insurers report that armed robberies and burglaries of insured gunsmiths are increasing in frequency and in the value of the property taken.

The consequences of such crimes are especially unpredictable because they often provoke frantic and ill advised responses from everyone present at the scene. I had direct experience of such a situation many years ago as a junior attorney assisting a senior partner in a claim which arose out of the burglary of a gunsmith’s shop. Our insured ‘smith was an older gentleman, an FFL holder who combined general machine work with specialized gunsmithing on high end bolt-action rifles.

He was working late one evening when he realized that an intruder had entered his premises through an open door. He quickly ran to the door and locked it with a deadbolt, effectively imprisoning the offender. While not leaving the premises, the gunsmith armed himself and called the local police, who responded quickly. The responding officers told the ‘smith to stay put and entered the enclosed area.

Unfortunately, our client couldn’t resist the urge to "help" the police and followed the officers into the shop while brandishing his own handgun. The criminal saw the ‘smith pointing the pistol in his direction and fired his own weapon, missing him but hitting an officer in the abdomen, inflicting a serious wound that left the policeman unfit for a law enforcement career. The result was along prison sentence for the burglar and a lawsuit by the downed officer against our client.

After several years of litigation, we were able to successfully argue that most of the fault should be attributed to the criminal but the jury still found our client to be responsible for twenty-five percent of the officer’s damages. Twenty-five percent of an enormous sum of money is still an awful lot of money. Had the gunsmith lacked insurance coverage, the jury’s verdict would have wiped out his life savings. As it was, the officer agreed to a post-trial settlement rather than contend with an appeal.

This cut the loss to the insurance company but the money paid to the policeman was still big by any standard. I describe the facts of this case to illustrate for the reader why many insurance carriers may regard criminal activity to present the greatest risk they assume when they sell coverage to gunsmiths. Criminals themselves can inflict injury on customers, employees, and bystanders, but they sometimes incite the victims themselves to do irrational things which magnify the danger posed by the criminal himself.

If guns are not securely stored, there is the troubling prospect of the additional liability a gunsmith might incur if criminals remove guns from the premises and use them to commit robberies and murders. To summarize what I learned by conferring with my acquaintances in the insurance industry, the danger of crime provoked by the presence of firearms and ammunition will probably be regarded as presenting the greatest risk of loss, followed by the danger of faulty workmanship or bad installation of parts.

General premises liability (such as slip and fall accidents and other injuries to patrons caused by conditions at the work site) will be regarded as nearly equal to the danger presented by gunsmithing er-

rors. The danger of fire damage and consequent property loss will come in a close second to premises liability, followed by "bailment liability" (loss of customer guns through theft or inadvertent damage). Unless the gunsmith and his employees have exceptionally bad driving records, automobile liability will likely be deemed the lowest risk an insurance company faces.

Lowering Costs All of this would be useless knowledge were it not for the fact that you can probably use it to make the equation more favorable to your pocketbook. Most insurance carriers can be persuaded to offer a business proprietor lower premiums if he can demonstrate that he has considered these risks in advance and has taken meaningful steps to reduce them. While I have not undertaken to create a complete checklist, a number of sound practical measures come to mind.

To address the danger of crime, have you placed a serious physical barrier between the area where your customers meet with you and the area where you and your employees store firearms and carry out repairs? Do you and your workers have a plan in place, such that everyone involved in your business will know exactly what to do when confronted with an armed robber?

Do you have a secure way of storing firearms and ammunition when your shop is closed, meaning a storage facility secure enough that thieves will have little motivation to try and breach it? While I am not against burglar alarms and video surveillance, my experience in the area of theft losses leads me to believe that such systems are more likely to inform you that you have been robbed than they are to prevent theft altogether.

They appear to be most effective when combined with physical barriers like steel doors and secure vaults because burglars do not want to be videotaped, with a siren screaming in the background, while they devote hours to beating on an impregnable gun safe. The safest practice is to discourage criminals from even making an attempt.

To counter the danger of true "gunsmith malpractice", what sort of ongoing education are you and your employees receiving to guarantee that you’re on top of your game when repairing and modifying guns? Even if you’re certain of your own abilities, have your employees had their knowledge and abilities tested and verified? If you undertake to restore the appearance of a gun which is unsafe to shoot, have you required your customer to sign a statement acknowledging that the weapon should not be fired?

If you have to testify under oath, what measures can you show you have taken to guarantee the safety and thoroughness of the work done in your shop? How safe are your business premises for those heedless customers who never seem to be aware of where there walking? When they are walking back to their cars with bundles in their arms, unable to see where they are stepping, do you and your employees offer to assist them back to their vehicles? Have the rickety steps leading up to your front door been repaired?

And what about the leak in the roof? Is there a danger that it could let water into your premises during a late night rainstorm, flooding your workspace and damaging your customers guns? To make your thinking on the these subjects fruitful, I strongly recommend that you contact your insurance carrier and, if you have not already done so, request a conference with the company’s loss prevention specialist, who may also be identified by the rank of "safety engineer", "loss control specialist", or several other titles.

Many of these specialists have completed specific education related to loss control and are certified by insurance and engineering organizations. Reputable insurance companies employ them to improve the safety practices of their insureds. You can make yourself more attractive as an insurance customer by showing a proactive attitude towards loss prevention, an attitude best demonstrated seeking the advice of your company’s experts.

Let your carrier know that you want to save money on your premiums by improving your operations, and request a walk-through inspection of your business by their safety hounds, something your insurer should be pleased to provide to you. I have had clients who resisted inspections because they feared the insurer would spot things unfavorable to them and use this as a reason to raise their premiums. In my experience, the result has been quite the opposite.

Insurers appreciate it when their customers take the initiative in an honest effort to make their operations safer and they will take this into account when setting premiums. In the final analysis, I believe that you will derive your greatest benefits from the business relationships you cultivate and maintain over the long haul.

Take the time to locate an attorney you can work with, one who is willing to take the time to understand the challenges you face in your business, and make his or her acquaintance before you find yourself in dire need of legal advice. The same considerations apply to the insurance professionals you deal with, who should be people who show a genuine interest in helping you avoid losses by controlling risks before they become accidents.

Last but not least, you would be well served to make friends with the law enforcement officers who work your area and listen carefully to the advice they can give you about securing yourself, your customers, and your employees against the threat of crime. An ounce of prevention is worth a pound of cure. The author gratefully acknowledges the assistance of Mr. John L. Roberts in the preparation of this article. Mr.

Roberts is a member of the underwriting staff at Mountain States Mutual Casualty Company in Albuquerque, New Mexico. AG