Insurance - Don't know what to do

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

  1. STLTurfmanagement

    STLTurfmanagement LawnSite Member
    Posts: 51

    I use American Family for a 1,000,000 general liability policy, 10,000 personal injury, etc. policy and it's like less than $400 a year. However this is just a liability policy and doesn't include workman's comp. We are venturing into the world of workman's comp next year for when we hire but typically that type of insurance is based on a percentage of your payroll.
  2. TPendagast

    TPendagast LawnSite Fanatic
    Posts: 7,670


    My fist suggestion is if you are feeling overwhelmed with "full time College and a business an family" is…don't do the business…

    You can mow a few lawns on the side (legally) while you're going to college and plan your business while you're in college. This way you have years to have it all planned out.

    Spend time researching your local laws, find out what is actually required and at what point.
    Some college kids paint a few houses every summer for money and don't have businesses, some college kids paint 20 houses in a summer and have employees and a business.

    don't listen to every 'expert' here on this site who makes this claim or insists on this demand.

    You're in west virginia…. in my state you can't marry a girl at 14, in YOUR state you CAN!
    So what's the law for me is NOT the law for you.
    Keep mowing your families lawn, even if they don't pay, you'll get practice, experience and referrals.
    Report your income and track it, just like any other job…If something happens on your clients lawns and you don't have insurance, their home owners insurance takes the hit.
    Be up front…tell people Im just a college kid, not a full fledged professional company… It's still legal to do that, despite what others on this board will say.
    Now… MANY customers might refuse you BECAUSE you don't have insurance… and others might not care.
    So if you WANT to go out and compete and equal ground and not get turned away from opportunity… yea, then you need insurance.
    Don't think to yourself you need small insurance because you don't have a lot.
    That;s not the way the law works.
    If you get sued, and someone wins a judgment against you, they can garnish your income with interest until they are paid back…they can hound your forever, no matter how old you are or where you go, taking money from your bank accounts, your tax refund, even from your employer before you even get your paycheck.
    Even if you go bankrupt, certain debts (ones that are proven to be from negligence, or willful disregard/destruction) are considered by law to be "non dischargeable" which means… you still have to pay and they will still garnish you.
    You can't simply go get a new job and they will go away…. they will take money out of that job too….

    THIS is what insurance is for, NOT to be "legal" or equal with the other guys…..but to protect YOU front he above shenanigans.
  3. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Posts: 264

    Thats the sort of plan I'm looking for. I don't need workers comp as far as I know, because I'm the only employee and plan to keep it that way. I could manage $400 a year considering it can be done in payments. The biggest issue for me is winter = no income, what money I do still have after Christmas gets used for paying taxes (as low as my income was this past year, I still had to pay what I thought was an unbelievable amount in taxes considering I have no assets and am in College). I've considered snow removal and might approach that in the winter of 2014/2015, but for the remainder of this winter, its just not in the cards. My biggest concern is that I will work my ass off during the cutting season, and still barely make a dime after overhead and taxes are factored in. For example, for this season I still need a new trailer, a new trimmer (my home-owner Troy-Bilt wont take another season of daily use), a new blower (home-owner poulon pro bit the dust about two weeks before the season ended), and then to consider a commercial walk behind (doubt my homeowner husqvarna 22 is going to make it this entire season either). Considering the cost of all those plus some of these unreasonably high local insurance quotes, I've got a lot on my plate.
  4. TPendagast

    TPendagast LawnSite Fanatic
    Posts: 7,670

    you know those family members who don't pay for their lawn service?

    Take your needs to them.

    I need a lawn mower
    I need insurance
    Blah blah blah….

    YOU need a family loan.

    They give you a leg up to help you start, 7 people collectively can come up with all this.
    They give you referrals so you can fill say two days of mowing with a more productive professional mower.

    In return they get their lawns taken care of (mowing only) for free….for like… ever (as as long as you are running the business)

    Figure out how much you need….freik, your banker will help you!
    Then go to them for a family loan.
    Meet with all of them….

    Don;t think you don't have a leg to stand on…you have given them all a year of service and they all owe YOU money.
  5. STLTurfmanagement

    STLTurfmanagement LawnSite Member
    Posts: 51

    maybe consider a different industry? As time goes on, you'll realize why professional lawn care companies have to charge what they do because it's not easy and definitely not free. All your client sees is your 10 minutes on their property, they don't see the behind the scenes fees and extra work it takes. If you decide to continue to cut grass I'd get a basic general liability policy and purchase some well maintained used equipment to get you started.
  6. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Posts: 264

    TPendagast, first off, I wanted to thank you for information I've learned from you. I've been doing a LOT of research on these forums and have learned a LOT from your posts regarding when licenses are required and whatnot.

    I will be honest, I would likely have done my business this season the same as I did the last season if it wasn't for the worry of being stopped by local police and getting cited for doing business without a business license. That seems to be going on a lot around here because my city can't find any other way to make money (you should see the botched job our city crew does at maintaining the grass/beds along our roads and in our parks - it's an obvious indicator of the wages the men are getting and the obvious reason that they could care less about the visual representation that our city receives).

    I understand the reasoning behind the insurance; I did not, however, (until receiving replies on this thread) understand that even if I was sued for all my assets that they could still garnish future wages. Shows you how much I know about the legal and insurance systems; which is why I'm asking for advice from the guys who've been there and done that!

    My biggest issue with not getting insurance is that I currently reside with my parents and that is the registered location of my business. It is fully under my name and SSN, however. But, I'm still skeptical that if I were to be sued for something that they could pursue my parents and their assets. I can't have everything that my parent's have worked for taken away because of me neglecting to pick up a general liability policy. Does anybody know if this is possible, that they could pursue my parents as well as myself?

    Also, in the event that I cause damage to someones property, what is the chance that I am pursued for the damage, rather than their Home Owners insurance paying for it? If they know upfront that I am NOT insured, does that help me if something did happen? (I read this in one of your (tpendagast) replies to a similar forum from another LCO who was asking when a "business" is actually a business).
  7. TPendagast

    TPendagast LawnSite Fanatic
    Posts: 7,670

    IF I were you,
    (I'm going to assume you have a pick up or trailer already)

    I'd get one of those ferris hydrocut mowers and a sulky, it's the closest thing to a BOP mower you are going to find.

    It's simple, professional grade and will last a while,,,and it'll be pretty cheap.

    Let's say that's $4,000 (I don't have the price right in front of me)
    then you get yourself a general liability paid in full for a year…lets say
    that's $2000
    you need some operation capital…$3000 should do it
    Weed whacker, blower, and some other random supplies
    another $1200.00

    It's best to get some software to manage your business too…so Id calculate another $1000 for that.
    So you need to borrow $11,000 for your business venture,
    from 7 family members thats $1,571.43 that you need from everyone.
    A lawn is generally $35 cut say ( I dunno the size of their lawns could be more) and in WV ill venture to say they need cutting 28 times a year…so they each already owe $980 each to you.

    I don't think this is an unreasonable angle to take.

    go to them with a business plan. and remember, they ALL owe you at least one referral (a paying referral) too.
  8. STLTurfmanagement

    STLTurfmanagement LawnSite Member
    Posts: 51

    check out and there are a lot of references on there, or you could call your local municipality and find out the requirements. We set up an LLC so that way your business is it's own entity and is separate from personal assets, that way if you were to be sued you could only be sued for what your company owns. In my state the fee to set up the LLC. was $50, and the fictious name permit was $7. the LLC is a one time fee and you are assigned a EIN or Federal Tax ID #, the fictious name permit must be renewed every 5 years. I learned all this information from a CPA in my city though, I would suggest checking out if you are concerned with legalities and what exactly you are liable for
  9. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Posts: 264

    Respectfully, I'd rather not hear "find a different industry" or "don't get into the business". I'm in the business, thats all there is to it. I LOVE doing lawn maintenance. It's calming and relaxing, I don't have to worry about a boss or idiot co-workers, and I can walk away from each job-site saying "I left that property in much better condition than it was. Good job. *self pat on the back*"

    Believe me, I'm already receiving enough criticism from my family and friends telling me that this "dream" I have won't work and that I should grow up. Not only am I here to prove them wrong, but I'm here to prove to myself that I CAN make it on my own and obviously don't need the negativity that everyone throws at me.

    With that being said, I'm looking for constructive (not deconstructive) criticism and advice on what needs to be done pertaining to my insurance predicament. I'm already a licensed business for 2014 and I'm not going to withdraw that.
  10. TPendagast

    TPendagast LawnSite Fanatic
    Posts: 7,670

    Hah…cops citing you for no business lic…fun stuff!

    cops can cite you for wearing a red shirt too… check and know local laws, cops aren't lawyers and do what they are told…. nuff said.

    As far as legality of insurance.
    IF you get in a car accident, and it's the other persons fault, their insurance covers damages…. what IF they DONT have any? (sure it's illegal but plenty people do it)
    Well then it comes down to YOUR insurance…but what if you don't have an uninsured motorist coverage, and just basic liability? Your screwed… you get nada… sure you can sue the guy that hit you, but he can't even afford insurance!

    This is how it works, on a property as well.
    You pick up a rock with your mower and buck it into the window of their car….your insurance will pay minus a deductible.
    What if you don't HAVE insurance? Either their car insurance, or home insurance will pick it up, minus the deductible….. and the client will likely fire you because they are mad.
    It's stupid on their part, because they could have just hired a guy with insurance, but see that guy costs more.

    Ignorant clients want you to carry insurance but don't feel they should have to pay a premium price for that protection, they think it should be just YOUR cost of doing business. BUT part of DOING business is charging clients accordingly to recover those costs…

    Most homeowners ARE idiots.

    Moving on…. what if you do something terrible?
    You're not insured, the rock went through the window in their car and hit their 3 month old baby in the head, killing him instantly?

    Well 1) NO insurance is going to cover the loss of someones life… a good policy might mitigate the monies of a law suit, but someone is still dead.

    2) in a horrible case like this, the law suit is likely to exceed your basic liability policy (or definitely if you don't have one) and they are going to try to sue for everything and anything (because their are angry, horrified and grieving and need justice and someone to blame)

    In THIS case….because you are 19, and not a minor….by your state laws your are a tenant in your home…they can't sue your parents for their stuff.
    They might try, the paper work they file might look scary, but they won't get it awarded… it's a common legal tactic to threaten and claim many things, to try and scare people into an out of court settlement.
    So you can see all sorts of things written up in litigation, and they all hold as much water as the words you read right here on this page.

    So no, they can't take your parents stuff.

    IF you were STILL a minor, living at home? yea….maybe they could…depends on local laws.

    MY suggestion to YOU is to work out a formal rental contract between you and your parents, have it notarized… this would create a further hurtle for anyone wanting to go after your parents…a bit over kill, but it's simple and easy to do.

    Get your insurance, get your family to help you get started… and get some good equipment….heck if my step son I hadn't seen in a decade called up asking for $1500 to start a lawn business, id give to him (I gave my brother in law a scag, a truck, a honda commercial, a tank of gas an $3000 in irrigation inventory with a trailer to boot to start his a few years ago)

    I think it's a not brainer….but me? I'd get a decent policy, don't go for minimum…. the insurance agent will take you more seriously too.

    Also, no you don't need worker's comp…. BUT you DO need Something to cover yourself…what if you got hurt?? Even some very basic insurance (which you can probably get through college because yoga re a student) will help… or maybe some aflac.

    Remember all 7 family members already owe you some money….and after THIS deal they OWE you at least one paying referral…. you've got a good start

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