Insurance & Liability for Small LCO

[DowntoEarth]

I'm working part time as a LCO so my wife can stay home and raise or kids till their in school. I've lined up 15 yards for this season and I'm planning on hiring 1 worker. How should I handle Liability Insurance for both my Customers and my Employee. I don't think I can afford to purchase Workers Comp.

I'm planning to grow the business in the years ahead but can't afford to get ahead of myself financially.

Advice is greatly appreciated!!

[ElephantNest]

Skip the help, and do the work yourself. Just get legit and buy a year's worth of business insurance.

[jajwrigh]

I agree with elephant, you don't need help with 15 yards! You will save a lot of money by staying solo at that size.

[WAGS LandL]

Man, don't waste your time or money with extra help now. With
15 yards you don't need the help or the expense. Work small
get liability to cover you and the business and inland marine
coverage for your equipment. It is not that expensive and will
make you legit.
I did 14 lawns part time while working full time with no help, while my wife stayed at home, so I know where you are coming from.
Good luck! Get insurance

[Gerg21]

I have a question. I was wondering what is a LCO?. I have been doing research at my state dept. of assessments and I was going to apply for my LLC. I see that most people are LCO on the site. Do you still get LCO trough the state dept. of assessments? One other question what is a S corporation, C corporation. Any help one what I need to get would be great.
Thanks
Greg

[chevyman1]

I just received my LLC status here in NYS...$200 to file, and I have $500k liability insurance for $650 a year...not too bad...I keep 75% of my accounts on the books, 25% off and pay my help (if and when needed) out of that cash pool

[James Cormier]

if you cant afford workmans comp then you shouldnt be in business

lco= lawn care operator

if you pay employee's cash, you are just asking for trouble,if you cant do it right then dont do it at all.

[chevyman1]

Workmans comp isn't necessary if you are a small operation like you are talking sir...you become big, then obviously you need to do it. Save your cash if you only have someone helping you sometimes, and you don't have to take out workman's comp on yourself

[65hoss]

Take the money it would cost you for a helper and get very productive equipment. You can do 15 lawns by yourself if you really desire to do it. Just starting and paying a helper will strap you more than its worth, especially with only 15 lawns and wanting to let your wife stay at home. Working solo can be VERY profitable, but add a helper and it goes down drastically.

[chevyman1]

65 Hoss is exactly correct and he's been in this for a long time...take his advice on this

[James Cormier]

Workmans comp isn't necessary if you are a small operation like you are talking sir...says chevyman1

If you have 1 employee than you are requried to have workmans comp, no matter what. even if you are not a corp.


You dont need workmans comp if your the only employee, Unless you are a corp, then you are requried to have it.

Again...do it right or dont do it at all

[65hoss]

Actually James, in many states its not required until you get a certain amount of employees. Here in TN after 5 you must have WC, if not you can chose not to have it.

[chevyman1]

required and reality are two different things...if you have 100 places and need lots of full time help of course do it right...if you are a guy like me who might have 50-60 this year, have someone help when need and pay under the table...99% of places do it, don't let someone fool you

[James Cormier]

65 hoss....I dont know Tenn requriments, I speaking of Ma. Its dosent make sence what tenn does because the size of the business has nothing to do with the chance of a employee getting hurt. And a smaller employer would have a harder time taking care of a employee that gets hurt.
AND thats what it is for, I am a employer that pays it and I was once a employee that lived off it for 1 year so I know the importance of having it.

IF your someone telling your employees that you have it and dont your a scum bag...periord, and that reality alot of small landscapers do that.

Chevyman1...99% of companies do it....do what pay under the table? so...thats okay???? come on.....
Then why dont you post your name and company name and where you do your business? I didnt see that in your profile.
I am sure your customers wouldnt mind you having employees on their properties that are not insured...cause everone's doing it....oh wait Im not, am I am sure there are alot of guys here that are not. I would be willing to bet there are alot of guys that you compete against that are not.

[BB36]

Originally posted by 65hoss
Actually James, in many states its not required until you get a certain amount of employees. Here in TN after 5 you must have WC, if not you can chose not to have it.

In NC it's 2 employees; but if something was to happen to your employee you could still be held liable.

[65hoss]

Originally posted by James Cormier
65 hoss....I dont know Tenn requriments, I speaking of Ma. Its dosent make sence what tenn does because the size of the business has nothing to do with the chance of a employee getting hurt. And a smaller employer would have a harder time taking care of a employee that gets hurt.
AND thats what it is for, I am a employer that pays it and I was once a employee that lived off it for 1 year so I know the importance of having it.



I would bet many states have something similar. Is it a good idea not to have it? NO. Its protection for the owner. Its also costly, that is why they allow small business to not have it. It does make the owner responsible though. Its like being self insured. Its a personal choice when you have 1 or 2 people. Can a guy sleep at night not having it? Each person has to decide that.

The under the table stuff is what this site is trying to help stop. Trying to raise the bar in the green industry. Some people are probably new or thinking about getting in this industry. So being a champion of under the table tactics really isn't needed or desired on this forum. At least that is my opinion and the opinion of other instrumental people here in the past.

[James Cormier]

"I can confidently say I'll be in the top 10% of sole proprieterships in terms of profit, work quality, and knowledge (that's not arrogance, that's FACT). " quote from chevman1 in past post

Now I know why.....you only pay taxes on 75% of your income and you dont pay proper insurance......oh yeh everone does it..

[James Cormier]

You cant just be self insured...you have to prove you can handle the costs if someone makes claims...and you have to have a kettle with money put away for it.

If you tell your employees that they are not covered and they choose to work for you thats fine. If you tell them otherwise and you dont have it..well i have a problem with that.

If your bidding on a commerical property dont they ask to see your insurance coverage, mine do. and if I have employees they want to see workmans proof.

I think you and I aggree 65hoss on certain posts on this board, Someone must call out these people.

[65hoss]

Originally posted by James Cormier
You cant just be self insured...you have to prove you can handle the costs if someone makes claims...and you have to have a kettle with money put away for it.

If you tell your employees that they are not covered and they choose to work for you thats fine. If you tell them otherwise and you dont have it..well i have a problem with that.

If your bidding on a commerical property dont they ask to see your insurance coverage, mine do. and if I have employees they want to see workmans proof.

I think you and I aggree 65hoss on certain posts on this board, Someone must call out these people.

Yes I am real sure we agree.
I don't mean self insured in the techincal sence. More like your liable due to lawsuit if they get hurt. You will PAY.
Many comm'l properties do ask for proof of insurance and WC which is a great business practice for them and us. Makes the playing field more level when competing.

[chevyman1]

James, everything is going to be OK buddy....I have a friend and a brother in law that will help me on the side...it's just plain and simple reality dude...If and when I get really big, it will all be done like it should be. But some home pay cash, and that's cool too, ok?

[DowntoEarth]

Thanks for the advice on WC, I want to do this right. The lots I mow are all under 9,00 sq ft (including the house). What type of more productive equipment should I get?

I have a Toro 22040, Redmax EB7001, Stihl FC75 & Echo SRM2100

[chevyman1]

RedMax is awesome, best small engines period. Ferris makes a mean walk behind and tough mower, very productive

[Jim H]

DTE, have you talked to a good accountant yet? My suggestion would be to find one to explain to you the difference between C and S corp as well as a LLC. FYI...i filed as a LLC for the extra protection, but also as an S-corp for tax pursposes. I have not read anything about a C corp and my accountant did not even mention it so can't help you there. You could go as an S-corp without the LLC, but you are opening the door for some liability problems. A LLC can protect your house, car, boat, etc. if something unfortunate were to happen. If it was your fault because of serious negligence a LLC might not even be able to help you. Basically, using the S-corp for tax purposes limits the amount of taxes you pay. You get taxed as an individual and not as a corporation. Hope this helps a little....best way to find out about all this is find a good accountant.

[celltech]

One the workmans comp discussion, I called the workmans comp state office here in michigan today because I am planning on starting up part time as well this year. I may run into problems where I might need help this week or the next. I also have a full time job, as well as being on call for that job.
ANYWAY, sorry, got side tracked, the lady I spoke to here in michigan informed me that you could have 2 employees with less than 34 hours a week each and NOT have to have workmans comp. But if 1 of those employees goes over 34 hours, then it is required.
So, my next question after that was, "well, if I have an employe with 10 hours a week and he/she chops there hand off, am I liable in any way?" I was told NO, I would not be as long as that employee was aware that I was not carring workmans comp. I'm thinking that if (BIG IF) i needed a little help, that person would sign something I draft up understanding I don't have workmans comp and what that could mean.

OH well, just what I found out up here under about 10 feet of snow!!

MIKE

[aquamtic]

In my area alot of contractors have been hiring in temp help from staffing agencies. Yes it can be a little pricey but it all covera workmans comp for that person. You are safe this way

Plus it gives you the opportunity to feel out and possibly hire in some good people into your company.

Outsourcing staff is a booming business and it helps out quite a bit the small busiess owner

[GarPA]

In PA WC is not required for part time employees. If they cut their finger, wherever they have their personal medical insurance, would pay for the finger repair. IF, their medical ins were to discover that they were hurt while working for you part time, then they could go after you for the finger-repair cost...but...that is highly unlikley according to my insurance agent.

As Hoss said above, staying solo can be VERY PROFITABLE and with 15 accounts, you simply dont need a helper. If you must have a helper, use a temp agency. THen you are at zero risk of having to worry about wc issues.

But, make damn sure you get liability coverage for your business.Don't step one foot onto any lawn until you get that coverage. And make sure whatever you are pulling to carry your equipment in , is SPECIFICALLY listed on your commercial auto policy becuase if the trailer were to break loose, and run into another vehicle, or worse, into a person, your vanilla auto policy would not cover you. Commercial auto and business liabilty insurance is relatively inexpensive given the amount of protection it gives you.

[chevyman1]

Yep he's right...I have FULL Liability insurance, just not workers comp for my cousin and/or brother's side help

[Hawkeye5]

Mike: Be very careful regarding workers' compensation. I fear you were misinformed regarding your potential liability. All workers' compensation state laws are social insurance, the worker agrees to give up the right to sue in tort, the employer agrees to give up their traditional tort defenses, and the employee is taken care of according to a schedule of benefits in the event they are injured while on the job. If you don't have workers' compensation, and you have an employee injured while working, you may be sued in tort. Keep in mind your General Liability policy contains an exclusion for workers' compensation claims. In addition, in many states the injured employee may choose to not accept compensation benefits after being injured on the job and still sue in tort. That is why insurance companies also sell Employer's' Liability in conjunction with the workers' compensation policy. Consult your attorney.

[chevyman1]

thanks Hawkeye, that's great advice

[Lawn Services Plus]

I had a guy working with me for a few months,paid him cash.it cut into my profit too much.Im going solo now If I get more work Im going to buy a bigger mower-Ez payment plan--need to sell more work for now.I want to go full time but, have too many bills to quit my full time for now--

36"scag wb
2-toro 22"self propeled
30"john deer rear eng rider
Echo bower and trimmer
76 F-150
78 F-250
5x10 & 8x16 trailers