Is it safe to be a hosting reseller?

[thomasfrank09]

Hey guys,

I recently bought a reseller account at Hostgator with the intention of acting as the host for the clients that I design for. However, I was told that it's a bad idea because I have no control over the servers, and as such I am very liable to be sued by my clients if their site goes down even though it wouldn't be my fault.

Are any of you resellers? How do you deal with this potential problem?

[esl]

You would just need a legal agreement (contract like Terms & Conditions) which outlines that you will not hold liability and do not guarantee full up time, etc, basically a big disclaimer.

Check out HostGator's. This is a legal agreement between the customer and HostGator which basically protects HostGator from frivolous and illegitimate lawsuits.

http://www.hostgator.com/tos.shtml

15a.) Indemnification
Customer agrees that it shall defend, indemnify, save and hold HostGator harmless from any and all demands, liabilities, losses, costs and claims, including reasonable attorney's fees asserted against HostGator, its agents, its customers, officers and employees, that may arise or result from any service provided or performed or agreed to be performed or any product sold by customer, its agents, employees or assigns. Customer agrees to defend, indemnify and hold harmless HostGator against liabilities arising out of; (1) any injury to person or property caused by any products sold or otherwise distributed in connection with HostGator; (2) any material supplied by customer infringing or allegedly infringing on the proprietary rights of a third party; (3) copyright infringement and (4) any defective products sold to customers from HostGator's server.

I'm not a lawyer and don't claim to be one so if you are really worried, talk to a lawyer.

[gwyneth]

Originally Posted by thomasfrank09

Hey guys,

I recently bought a reseller account at Hostgator with the intention of acting as the host for the clients that I design for. However, I was told that it's a bad idea because I have no control over the servers, and as such I am very liable to be sued by my clients if their site goes down even though it wouldn't be my fault.

According to this reasoning, you'd have to put a server where you had physical control over it--but you'd still have no control over the comm lines, etc.

There are relatively inexpensive ways to setup fall-back DNS/bounce-to-servers, but as Evan points out, first and foremost protection is your TOS.

[thomasfrank09]

Thanks guys. I just didn't want to get into a situation where I was left open legally. I've decided to offer my hosting services only to customers that have strictly informational sites. I don't want to deal with ecommerce sites and the potential large amounts of lost revenue they could have should their server go down.

[esl]

Just make sure you have a solid contract. Good luck.

[gwyneth]

There are a lot of threads in the two reseller categories, plus the webhosting category in the general section, that have practical nuggets about dealing with clients and client-created "situations".