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All kinds of insurace. Someone explain.

Discussion in 'Business Operations' started by jim163, Oct 25, 2006.

  1. jim163

    jim163 LawnSite Member
    Posts: 149

    So first of theres commercial vehicle insurance. Then theres general liability. What insurances are necessary for employees?and what else am I missing? Im pretty sure most guys around here aren't properly insured. Im just looking at the cost of doing business.
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Insuring your employees comes under the heading of Workman's Compensation. As for other insurances, your general liability coverage may or may not include inland marine coverage. Inland marine coverage is for theft which includes a deductble generally for any equipment over the value of $500 per item.
  3. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    There's Life insurance in case you die, medical insurance in case you get sick, car insurance in case you wreck, dental insurance in case of tooth decay or related maladies, credit card insurance in case you can't make the payments, blackjack insurance in case the dealer turns an Ace as their upcard, and insurance insurance in case your regular insurance fails.
  4. MowerMoney

    MowerMoney LawnSite Senior Member
    Posts: 282

    I hate insurance. Gotta have it but you ever notice that's it's usually only good until you need it?:dizzy: :cry:
  5. jim163

    jim163 LawnSite Member
    Posts: 149

    thank you for this useful information. Ill be sure to get the dental insurance.:waving:
  6. VBsnow

    VBsnow LawnSite Member
    Posts: 241

    Here are some lists common to what you do:

    1) General liability: Damage you may do to a 3rd party. Everything from broken windows to broken people (not employees). For LCO's it is cheap. Prices start around $350 and up. You can request a deductable to reduce the premium but it won't do much. What is important to note is that workmanship is not covered. You will need to obtain E & O for this to be covered. Some companies offer this within their GL as an add on endorsement.

    2) Inland Marine: This is property that moves around town such as your equipment. There is scheduled and unscheduled equipment. Scheduled is usually half the price of unscheduled. Scheduled is usually for items over $500 and unscheduled is for under(loose tools and equipment). Be wary of the fact that these generally do not replace the equipment. 99% of the inland marine policies pay on an ACTUAL CASH VALUE basis. Thus your policy loses value as your equipment does. Adjust values annualy to match. How much is your 99 Exmark worth today? Call around and price it.

    If you add these two together it is now known as a Commercial Package Policy or a Business OWners Policy. It varies from company to company on what is available.

    3) Workers Compensation: I have added to other threads about what is "required" by law. You should have it if you have employees, period. The cost is based on your per hundred dollars of payroll. You pay more to employuees, you then must pay more to the INS Co. General Liability usually works this way as well but it is on a per thousand basis of gross payroll.

    4) Business Auto: Enables employees to drive and signage. Also enables better coverage for trailers and easier on the taxes. Some personal policies offer "business endorsements" but the advantages are limited. I personally do not want my employees driving anything in my personal name. I know these people and..

    These are the big four. There are others...many others. However, do buy dental as well. After all, you gotta look your best to sell.

    Hope that helps.
  7. Josh.S

    Josh.S LawnSite Bronze Member
    Posts: 1,085

    I don't know if I am properly insured or not...

    I have $1m general liability, and $9k for mower replacement, $2k for other tool replacement with a $200 deductable (don't know what kind of insurance it is but the insurance lady said if somebody steals my stuff they will replace it for the full amount up to what I have it insured for)

    I only have personal insurance though, full coverage on my truck and liability for the trailer..

    My insurance for the liability and replacement cost me $374 for 1 year coverage, I cant remember what the insurance costs for the truck and trailer cause I pay every 6 months, but I think it costs around $300 per 6 month ($600 per year)...

    I dont pay workers comp because normally I work alone..

    Is there any other insurances I should have?
  8. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    Be carefull about Inland Marine Coverage and the scheduled/not scheduled.

    As everyone else has eluded too...

    The unscheduled equipment is up to a certain value I beleive mine is something like 1.5k. Then I'm offered another 500 bucks to replace common tools (brooms, shovels, wrenches, sockets, etc.). Unless the equipment that was stolen (or fire...I made sure I was covered for this.) is specifically 'scheduled' it will be coming out of the numbers above.

    In general since I have a $500 deductible it isn't worth placing any equipment that is under this amount since I would have to pay that amount anyway.

    Also, like others have said, you really should insure your equipment for a replacement value to purchase new...not a value of what it is worth. In other words if my mower is stolen tomorrow I have enough money to purchase that machine new (within a few bucks).

    Another note...

    I was speaking to my insurance agent about leaving my trailer at the jobsite with the equipment inside and giving her the scenario about someone hitching it up and pulling away with everything in it. She said the only way I won't be covered is if the insurance agent can prove that the trailer (doors, receiver, etc.) aren't locked. If they can prove that (not sure how they would) then the insurance company could deny the claim. I believe something to do with negligence.

    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    I would make sure that your truck is covered if something happens to it while you are working. Personal insurance will not cover you truck if you use it for work(Commercially)
  10. VBsnow

    VBsnow LawnSite Member
    Posts: 241

    TJ is right. The other guy on the ACV or RC is wrong.

    If you value your property at RC and your policy pays on ACV, you will not be paid RC. Some companies do offer this but it is rare. The companies I work with only allow it for larger LCO's. I have seen people burned on this one. By all means, if you want to pay more, pay more. Ins. Agents work for commision and we only get paid on what you pay.Read your policy and it will tell you. It will show ACV(actual cash value) or RC(replacement cost). HAVE IT IN WRITING! I assure you the license to become and insurance agent is an east test, it in no way means you have all of the answers. Do not depend on verbal confirmations when your business is on the line. My friend was paid $1.80 for and $18 tool. His truck was broken into and they took thousands of dollars in tools. In the end he recovered hundreds instead of thousands. Needless to say he was pissed. I explained it to him and now he is my customer.

    As for the theft of the trailer, don't leave it at the job. Here in VA, it would be covered regardless unless you misrepresented the security of the property. It could have an adverse affect on your rates if you are that careless w/ the equipment.

    As for the deductable, most of my LCO's or tree services are carrying no less than 2-5K of loose tools with them at various times. If written properly, the $500 deductable will not be noticed as much on a 2k claim. Usually if there is theft they take it all. So one mower and some loose tools can add up fast. Again, always schedule items over $500. It is cheaper than unscheduled.

    Also, do not put to much weight on insurance,tax, or accounting advise heard by word of mouth. While it is good to ask around, in the end you need someone who is a professional to help you effectively and accurately.

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