Looking into small business insurance and need advice/have some questions.

[breakpoint]

I think I mentioned this the other day but check with Erie about a landscapers policy. My quote was ~$800/ year to cover me alone operating, my equipment covered for replacement cost and $1 million liability. One had a $200 deductible the other had zero deductible ( the equipment / liability, that is) can't remember which was which.

Wow, I think this is very affordable. I'm actually planning to establish another source of income too and landscaping is a great idea to start with.

 

[JJZ 109]

I'm at about $825 per year for a liability policy that covers $300k per incident up to $1 million per year aggregate. The policy also covers $7,000 for one of my machines, $3300 for another and $17k for a third.

 

[Piston]

JJZ,

What "type" of business does your insurance fall under? Is it "landscaping" and are you covered for things like using a chainsaw? Seems like I mention that word and they all cringe

 

[Gale Hawkins]

I not sure everyone understands liability risks are hard for an insurance carrier to know how to underwrite and how fast a million dollar limit can be reached. When working on your own place risks are on the low side but put a tractor on a trailer to travel down a public road forces a carrier to be covering a lot of risk potential for example.

Sure many 'small' operators are not insured and never get bit by going the 'self insured' route. It works best when the operator has few assets himself but not so good for anyone he may cause damages.

My old equipment is insured as far as liability under a 'small' farm policy AS long as I do not charge any $$$. If one wishes to pay for my fuel then that is OK but I can not say or put out an ad stating I will bush hog for $5 per acre. I do provide some local services from time to time but it is always without charge. One guy had been sick for a few years and some places on his farm where just too much for his little red belly plus he was still not well. I cut over trees the size of my wrists to help him reclaim places where the hay people had backed away from the edge of the fields. I literally burned 10 gallons of $4 diesel in the process and he insisted before hand to pay for my fuel and did.

As noted there are specialty insurance carriers that most independent agents can hook you up with for the coverage you need.

One needs can change fast too. While typing this I realized I have not told our agent about the mini horses and horse trailer because he was specific that our rates were based on having NO horses on the place. Hope that does not bit us too hard.

 

[sparc]

I'll be doing this as purely a side business

That could be one thing that gives the Ins. Co. reason to cringe; that is they may take
your 'side business' as you not having the level of experience with this type of work
they are comfortable with so they look you as a higher risk, or apparently too high for
some of them.

If you can legitimately impress on them that you have x years doing this or in another
life you did this full time and have accumulated x number of years doing this type of
work without incident that may go a long way toward getting you favorable quotes.

I have been with USAA for over 35 years, they are great but this is outside their comfort zone.

 

[JJZ 109]

JJZ,

What "type" of business does your insurance fall under? Is it "landscaping" and are you covered for things like using a chainsaw? Seems like I mention that word and they all cringe

I own a seamless gutter business. They have it shown on the declarations page as, "Siding and Seamless Gutters". The equipment that they insure are a seamless gutter machine, an elbow machine and a towable 35' aerial lift. My 35' bucket truck is covered under a commercial vehicle policy, which I think runs in the $600 or so per year neighborhood.
I'm wondering if you're use of a chainsaw somehow lumps you into logging, which I would bet has high premiums?

 

[Tractor Seabee]

Liability insurance has become a problem for many small businesses. There are so many variables in assessing their risk. Time in business is a big factor. A new business w/o a track record is going to pay more and if you do not have your state's Labor and Industries medical/employee liability you will pay a lot more. Your personal auto policy and any extended liability on it or homeowners insurance does not cover your car/truck and you if it is used for business so that adds another increment.

I have a consulting business (one man) and had a terrible time getting or getting a decent rate on Errors and Omissions liability. Some companies said no, you have no record, others wanted as much as $10K/yr. Finally found a broker that set me up for $1K plus $600 for general business liability and $1K deductible. The carrier is Mid-Century Insurance. Lots of luck. Just keep looking.

Ron

 

[Gale Hawkins]

I think getting needed business insurance is going to become harder and harder. For people who use heavy and dangerous equipment it may get very hard. There are times when I would like to do some things for the public but other days not having coverage to do so is a plus.

Even when working for myself in the big truck, tractor or backhoe for a day takes about $60 just for fuel. It is at the point doing small custom jobs at the rates people expect to pay means one is actually loosing money when looking at the true costs. I seldom tear up equipment on my place but often it happens when working on someone's place. Today when you are digging you can create a liability very fast out in the middle of nowhere because it is amazing where you can find bury cable so making the call is a requirement even if you are going to dig a grave for a neighbor's dead horse.

As noted before if one has anything loosing it in a liability case is so real. My agent states I am covered as long has I am not charging for my services so I do not.

 

[whistlepig]

JJZ,

What "type" of business does your insurance fall under? Is it "landscaping" and are you covered for things like using a chainsaw? Seems like I mention that word and they all cringe

Commercial insurance. I had this. It doesn't care what you are doing or what you are doing it with. I was insured up to 1 million dollars for negligence. It wouldn't pay unless I was sued, taken to court, and lost. It doesn't insure for stupidity. If you accidentally drop a tree on someone's house or accidentally fling a hundred pound boulder through the pitcher winder on a 2 million dollar home while rotary mowing you are on your own. The nature of the beast. Costs of possible damages should be included in your operating cost.

 

[crashz]

That makes it impossible to price a job. If you have to account for any risk you are taking, pricing a job will go from reasonable rates to the highest imaginable dollar amount. What if my rotary cutter generates a weak magnetic field that shuts done a power grid or disrupts air traffic? The "what ifs" can be ridiculous.

Insurance needs to cover unexpected circumstances with the exception of criminal behavior. Stupidity happens and happens to the best of us.

I've been hunting down a carrier for a while now and out of 6 carriers, only one has called back with an actual price. The services I will have covered are:
- landscaping
- mowing
- grading
- light excavation (nothing over 4 ft deep)
- snow and ice removal
- landscape and site design (covers my professional engineer's license when doing work outside of my primary employer)

The only rate quoted is $1700 per year with three machines included.