David is joined by Larry Harb of IT Risk Managers, Inc. to discuss firearms insurance and the auction industry.
About this segment of Blackbird TV
Guest: Larry Harb, Founder / CEO, IT Risk Managers, Inc.. To learn more about our guest, visit ITRiskManagers.com, or call 517-381-9909.
Recorded: December 9, 2020
Published: May 4, 2021
Segment transcript
I’d like to introduce Larry Harb from IT Risk Managers in Michigan. Larry’s my insurance broker, and we’re in the auction business, and I wanted to ask Larry about firearms at auction. Larry, you know more about this than most people do can you talk to me a little bit about firearms and selling firearms at auction? It’s an interesting topic and it’s going to be challenging. What we’re seeing in the firearms industry and what we’ve seen over the past couple of years, as you know, I myself used to be an FFL and had my FFL license and gave it up. Now, I gave it up because we got into the cannabis business and I thought “uhh, cannabis and firearms, never should the two meet,” right? Not unless you’re driving the low riders. Right, right, well that was that’s the reality of it, but, one of the issues that we’d run into was getting insurance ourselves, and when the insurance guy can’t get insurance, that’s a problem. And that’s how we started talking about it because I was going to get my FFL, and I called you to talk about it, and now we’re talking about it here, so go ahead. What we saw happening was is where we were paying literally like $350 a year for a policy, our rates had skyrocketed. We were up over $1500 a year in less than a two-year time period, and what really happened is that because of the political environment—what you’ve seen happen is, is you’ve seen carriers leave the marketplace—and that’s really what’s happened. There are no insurance companies left today that want to insure firearms, and in fact, we’re down to about three carriers in the world that’ll do it, and that becomes the issue. Wow! So if you’re going to get in the firearms business, and to the auctioneers that are on our thread, if you’re thinking about getting into the auctioneer’s business, I’m suspecting you better be turning a lot of a lot of goods to make it worth your while, otherwise it’s probably not going to be profitable. Would that be a reasonable statement, Larry? Well, you want to make sure that it’s (A) profitable, but (B) is that you’re doing everything you can to protect and make sure that you’re selling the firearm to the right person, because that’s the issue. [Absolutely right.] At the end of the day what you want to make sure of is that number one, you do it legally and you do it properly so god forbid, if there is an event that happens, and they go to say “where did you get that firearm?” The answer wasn’t “I got it from the auction down the street.” That’s what you don’t want to have happen, is you don’t… “I bought it from Larry! I got it from him!” You don’t want it to be your auction company that is now the person who sold that firearm, and now they claim that it was an illegal or a bad transfer, or something of that nature. The expression “being in the line of fire” has many meanings, if that were to happen, and that makes a lot of sense, so if there is an event everybody in the chain of custody of that gun is potentially at risk, correct? They’re going to go to everybody, they’re going to go to see who sold it, which is first and foremost, is where was the last sale, and was it done by a federally licensed firearm dealer, and was there a background check completed. Because that’s what everybody wants to know. Where did he get it and how did he get it and was there a background check. That’s first, okay. And you know when you look at firearms today, firearms in auction, we all know that’s a hot commodity, there is no better advertising vehicle than a firearm to get people to come to your auctions, however you want to make sure you’re doing it proper and what you’re not doing is just skirting the law. We’ve seen that happen way too many times because the liability is just too great. I don’t care how much you make off of the sale of the firearm, there’s no amount of money that’s going to compensate you for the liability side, is the liability of what you’re taking on if that’s a bad transfer. And not to mention that I don’t think there’s really anybody out there that wants to be that company, or that person that sold something improperly, and it got into the wrong hands it was used improperly and somebody got hurt or killed, and that’s why it’s a it’s a difficult risk to insure, and from what you’re telling us that there’s only three companies insuring into this space now. What do you see happening going into the long-term future? Firearms are such a political event still, and that’s not going to stop, you still have the the democratic side of the house that would like to take your firearms away, you have the republican side that wants to keep them, and those two are still going to be at odds and I still think we’ll get some type of firearm reform coming down. What is it going to be? Who knows. But it just depends on who’s in charge as to how much they’re going to restrict what you can do with firearms, and what you can own. All good stuff, Larry. Really appreciate your time today, auctioneers on the thread if you’re thinking about selling firearms at auction, give Larry a call, he really, this guy knows more than than everybody combined. Larry, thanks so much for sharing your mind with us. Thanks David. I appreciate the opportunity to be here, it’s it’s always a pleasure to talk with you.