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Insurance - Don't know what to do

Discussion in 'Business Operations' started by JonesLawnCareWV, Feb 8, 2014.

  1. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Posts: 264

    Everybody starts somewhere. Last summer I didn't have a business license or insurance for my company. I was a small, solo-operation and likely didn't gross more than $2000 the entire season (partially because 7 of my accounts were family members who never felt the need to pay). I still filed that income on my taxes, so don't worry about that. Before anyone scolds me, I know it was wrong to operate under those conditions. I've done so much reading in the past months trying to make myself a legitimate company because I empathize with the guys paying out high taxes, licensing fees, and insurance premiums - I don't want to be "that" guy that's giving the professional side of the industry a bad name.

    I've already acquired my licenses required for operation for the 2014 mowing season; however, I'm having difficulty finding general liability insurance. Every company that I have recieved quotes from is asking for a $1000-1500/year premium for $100k worth of coverage. I DO NOT need a plan that large, at all. I have no assets aside from my trailer and my mowing equipment (if somebody is that desperate for money and wants to sue me for my assets, MY JOB, then they can go ahead. I can find another job).

    I was wondering if any of the other sole proprietors on LS have experience with some general liability companies that offer smaller coverage amounts. I'm talking like, $10,000 worth of coverage. I work 100% residential at the moment, and if I receive any commercial contracts, it would be small dental/doctor/gas station type properties (haven't even placed bids on any commercial properties).

    I can't imagine myself making more than 10k in the entire mowing season; I have a fiance and a two year old son that I like to spend a lot of time with. With that in consideration, I don't understand why I would need a coverage plan as large as 100k. IF I ever do run into damage issues, it would only be a broken window or dent in siding from an escaped rock or stick from the mower.

    Before anybody chimes in with the "what if your mower discharges a rock and hits a little child" - I'm not a stupid individual. I have a child of my own. If a child is in the vicinity of my mower, the mower is shut off. I take this to heart very much - Even if I'm inside a gated yard and a child is walking outside the fence, I will stop the mower/trimmer/what-have-you until the child is no longer in the vicinity. I can only imagine something like that happening to my child and I'm not going to put myself in the position to hurt a child like that (unlike the local commerical crews that run ZTR's at FULL RPM w/ side discharge while mowing the local school's playgrounds WHILE KIDS ARE PLAYING).

    So, thoughts? Suggestions? Referrals? Help, please. I really wan't to be a full and legitimate company - I don't like feeling like I'm taking advantage of the others in the industry who are doing things by the books.
  2. JFGLN

    JFGLN LawnSite Senior Member
    Posts: 952

    You defiantly need insurance but $1500 for $100,000 of coverage is very expensive. I use CBIC and have much more coverage for less then what you were quoted.

  3. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Posts: 264

    Our local business laws don't require me to have insurance, but after all the reading I've done I don't feel comfortable operating without it. However, I can't be paying 1/5th of my gross in insurance. I have a few friends who own local businesses and they are "bonded" at $10,000 and pay about $200 a year for coverage. From what I understand, being bonded works the same way, but if the bond company has to pay out for a claim, I would be responsible for paying them back. Not sure that I wan't to go that route either, but I simply can't afford to pay $1500 a year for insurance.
  4. unkownfl

    unkownfl LawnSite Gold Member
    Posts: 3,838

    Are you getting coverage for equipment at those rates? Bonds are more for contracts. They fulfill voids in contracts if you don't follow through. They insure the consumers investment and not your liability.

    Look into Travelers. I paid around 800 yearly in quarterly payments for around 200k in gross revenue 1 employee and 30% commercial. If your credit is shot you will pay more for insurance. This was general liability and no coverage on equipment.

    IMO I would go for a small general liability policy and then add an umbrella policy.
    Last edited: Feb 8, 2014
  5. ReddensLawnCare

    ReddensLawnCare LawnSite Bronze Member
    Posts: 1,652

    I have a 2 million gl policy. When i first started I was like you and didn't think I needed it. I was cutting a property with my bw and through a 6" rock that was partially buried. It through the rock up and over a 10' security fence, over i85 service road, and bounced off of the jersey wall. It was 8 am. Had it hit a car and caused a wreck, it would have been a bad one and ruined me. I was also a sole prop. They could have come after me, my family, and all of my assets. Be smart. Accidents are not planed and some are completely out of our control
    Posted via Mobile Device
  6. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Posts: 264

    Not sure what you mean. I'm only looking for coverage for damage to client properties in case of property damage or injury at the clients location.

    P.S. - I'm only 19. I have very little aid/support in my business endeavors. None of my family or friends have any interest in helping me understand the legalities involved with this. Therefore, I'm approaching this blindly. Especially the insurance aspect, as I've NEVER dealt with insurance of any kind in my life before. (still on my parents health insurance and such until I'm finished with college).
  7. WenzelOSLLC

    WenzelOSLLC LawnSite Senior Member
    Posts: 709

    I'd shop around for a better price but you usually don't find lower coverage than $100k.

    And it's better to have something thats bigger rather than smaller because things can get costly rather quick. Putting a shovel through a fiber optic cable gets expensive quick and so do medical bills if someone gets a rock shot into their eye.

    You may be small time but doesn't change how much damage you can do. On the flip side, having way too much coverage just means who ever sues you can get more money. The legal system can be complicated.

    General liability also can cover loss of revenues (ie, the stuff that pays your salary) in certain cases.
  8. unkownfl

    unkownfl LawnSite Gold Member
    Posts: 3,838

    Go sit down with a broker. You want general liability insurance at a minumim. This will cover what you described but that's it. If you run into someone with your truck working it doesn't cover that. That would be in your auto policy so they need to be notified of your BUSINESS use and get it in writing they have been notified if they don't change your policy. An umbrella is just that it extended your coverages on all your policies as further protection and shouldn't be much for you maybe 200-300 a year. Driving heavy trucks at a young age I would strongly suggest it.... Not saying you can't drive it's just you won't want your wages garnished the rest of your life at 19 for running into someone.
  9. allaroundguys

    allaroundguys LawnSite Member
    from kcmo
    Posts: 56

    Seems pretty steep. not sure what's going on. we use insureon. we have a 1 & 2 million dollar policy(standard for the most part) ours is less then what you where quoted and we are covered for more then mowing.
    Posted via Mobile Device
  10. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Posts: 264

    Thanks for the info. I'm looking around at some of the other insurance threads on LS (most of them archived) and seeing that some are finding million dollar policies for a for a few hundred, 300k for ~150

    A plan like that I could afford and would want - coverage for any situation. But I don't understand why a local agency would quote me $1500 for only 100k worth of coverage. They did mention that their rates are higher if the business is new (less than 3 years old), but how do they expect a brand new business to afford that when they aren't operating for lack of insurance!!

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