Insurance costs

Discussion in 'Starting a Lawn Care Business' started by Moguy, Apr 1, 2003.

  1. Moguy

    Moguy LawnSite Member
    Posts: 238

    Hello,
    After making numerous calls to many insurance agencies this is the average im getting to cover all my costs. Commercial business policy- 2002 2500 series chevy truck 1600.00 - 7x18 enclosed trailer 245.00 - equiptment coverage 300.00 - 500k general liability 1600.00. Agencies said because of the risk associated with new businesses never carrying general liability my cost would be higher than seasoned companies. I know costs are high for just starting out in business but, are these costs to much? Suggestions, comments much appreciated.
     
  2. wriken

    wriken LawnSite Silver Member
    Posts: 2,154

    Thats pretty close, I pay about 500.00 less, but I have 1 million liabilty, and pole barn, plus I have 2 lots and another pole barn listed thats located about 5 miles away from my main house, 2002 f-250, and 2 open trailers, but have to add new trailer, and all my equipment, which includes 2 ztr's and a w/b. I guess you are paying alot, or will be.
     
  3. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    Asking for comparison numbers from the board will not be a good source. There are so many variables that you cannot possibly compare this stuff. If you checked around and have gotten the best price, that's all that matters. I'd look for a company that you get a good feeling about and build a relationship with them.
     
  4. wriken

    wriken LawnSite Silver Member
    Posts: 2,154

    Thats true, I checked around and 30 miles away 1000.00 cheaper
     
  5. Moguy

    Moguy LawnSite Member
    Posts: 238

    Thanks for the response. I understand that it was difficult considering each individuals needs or other variables. I'm new to all of this and learning as I go.
     
  6. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    You probably could save the $300 on inland marine coverage if you have smaller equipment. First of all your deductible is going to be high enough to cover most small pieces of equipment (2 cy). If stolen/damaged you'll get depreciated value, not replacement value. Most of what is likely to get stolen is the little stuff anyways.

    If you're financing larger equipment (mowers) then you may be required to carry the coverage, but if not, then consider what your real risk is and if you think it's worth paying $300 for limited coverage.
     
  7. BobR

    BobR LawnSite Senior Member
    Posts: 714

    Just mailed out my annual premium for coverage on my truck and trailer ($1280).. I had a heck of a time finding a company that provides commercial coverage for a small business folks like us.
    I do not know if this company will do business in your area but it might be worth a shot www.erieinsurance.com before going with Erie I had a insurance broker - what a pain in the keister..
    Liability and property coverage (mowers etc) for 1 million last year was $822.
    Hope this helps
    BobR
     
  8. Meier

    Meier LawnSite Senior Member
    from DFW
    Posts: 269

    I was quoted $1780 per year for commercial truck insurance. It gives me comprehensive insurance (no collision), 100K/300K and if my trailer hits something while it's attached to my truck, the damage my trailer causes the other party is covered too. It would also cover any employees who would be riding as passengers in my truck. I believe the coverage on that was 100/300 too.

    Right now, I'm using Geico. The underwriting department called me about two weeks ago and said they would not allow me to renew when my policy is up on July 15th. With Geico, I was paying about $700 per year. This was a business use policy, not a commercial policy.

    I'm seriously considering self insuring with my own personal assets. $1780/yr just seems ridiculously high. Insane, even. (Especially when you look at my pathetic revenues right now.)

    Not only that, my attorney says that if you get a big $$ liability policy as opposed to the minimum state requirements, you could be cutting your own neck. It works like this: if you wreck into someone and cripple them for life or whatever, when their lawyer figures out you've got coverage over and above the state requirements, he will sue. When he files the suit, he'll go ahead and include you in the suite as well as your insurance company...it doesn't cost the plaintiff's attorney another penny to include you as a defendent too. But if the insurance is for state minimums, the plaintiff's attorney will just settle with the insurance company and assume you are not worth suing. When you carry 100K of coverage, you're basically funding the law suite that will come after your personal assets. And it's a huge indicator to the plaintiff's attorney that you may be worth going after if you carry more than state minimums.

    I've been giving this a lot of thought lately. I'm seriously considering state minimums or just self insuring.

    Later,
    DFW, TX
     
  9. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    You can be sued no matter what regardless of your policy limits. Carry the coverage that you feel you need for the assets you're pretecting versus the risk you're assuming. Essentially, carry the policy that's going to let you sleep at night.

    And, you can still have a large policy beyond state minimums and still have nothing personally worth going after. A minimum could hurt you if it's exhausted. Hit three kids walking through a cross walk and you've got three law suits that I bet won't settle for $100 K a year.
     
  10. Meier

    Meier LawnSite Senior Member
    from DFW
    Posts: 269

    ++++A minimum could hurt you if it's exhausted. Hit three kids walking through a cross walk and you've got three law suits that I bet won't settle for $100 K++++

    I think the entire point of my logic was missed.

    If you've got state minimums, how many plaintiff's attorneys will settle for the insurance? (Hint: Almost all of them.) How many will come after you personally? Bear in mind, the plaintiff's attorney has no way of knowing if you've got anything worth going after. Most americans don't. When he finds out you mow lawns for a living, he's more than likely to stereotype you as someone not worth suing. He can't call you into discovery (a process where you state under oath where all your assets are) until after he's got a judgement against you. He can't get the judgement without spending a lot of his own money.

    But if you're carrying a million dollar policy there is still a good chance you may be included in the suite. Will a measly million bucks compensate three children who were critically injured? What if one of them is dead and the other two can't ever walk normally for the rest of their lives?

    See what I mean? A million won't cover that. And if you do carry a million dollar policy, you can bet there will be a law suite...it doesn't cost the plaintiff's attorney one red cent to include you in the law suite when he sues your insurance company. Even though you've done the right thing by paying the premiums for a million dollar policy, you could still lose everything you own.

    Later,
    DFW, TX
     

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