Insurance

Discussion in 'Business Operations' started by mtdman, Mar 4, 2004.

  1. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    I'm going to take a hit on this one, I know, but bear with me please.

    My former partner was always responsible for getting the insurance for the business. Liability and equipment. I kinda know what he would do each year, but never paid that much attention to it. Before he quit last year, I made him renew it. He always went through his mother's friend who has an insurance agency. Something I'm not going to do again this year.

    So, I'm getting estimates on insurance right now for this coming year. This is the first time I've done it, so I'm kinda unsure of what kind of limits I need on liability.

    Looking at previous policies, he had us at $100,000/$200,000 for liability. That seems pretty low. I don't do a lot of commercial props, the few I have have never asked for a certificate or required certain limits. I'm mainly worried about throwing a rock and hitting a person, not as much property damage. Especially with all the idiots that like to walk through my work zones every day.

    Is that too low? Should I up it? I don't think I need $500/$1 million, but I was thinking like $300/$600,000 would be okay.

    Also, I'm going to be hiring a few folks this year, part time. As I understand it, I don't need to have worker's comp in MI for anyone less than full time. But it's not that expensive, like $8/100 hours. Should I get it to cma anyway?

    Thanks in advance for your CONSTRUCTIVE replies.

    :D
     
  2. Lombardi

    Lombardi LawnSite Senior Member
    Posts: 538

    You will see that the rates will vary greatly per area. I have $2mil/$4mil. liability through American Family. $400/yr. Most commercial jobs I have bid want at least $1 mil/$2 mil. If the state does not require WC in your situation, I would not spend the money on it.
     
  3. Breden Lawn Care

    Breden Lawn Care LawnSite Member
    Posts: 16

    I WOULD GO WITH A 1 MILLION DOLLAR POLICY DUE TO THE FACT THAT THE DIFFERENCE IN PRICE IS NOT MUCH FROM A $500,000 DOLLAR POLICY, AND MANY COMMERCIAL ACCOUNTS I TAKE CARE OF REQUIRE 1 MIL IN COVERAGE. I PAY AROUND $1,000 A YEAR FOR A 1 MIL POLICY WITH A 2 MIL AGGREGATE FOR A YEAR, WHICH ALSO INCLUDES $27,000 DOLLARS IN COVERAGE FOR MY EQUIPMENT WITH A $2OO DEDUCTIBLE. I USE ERIE INS.
     
  4. James Cormier

    James Cormier LawnSite Bronze Member
    from Ma
    Posts: 1,218

    You had to add that last part

    "Thanks in advance for your CONSTRUCTIVE replies."

    I guess this leaves me out :)

    but very simply, yes, yes and yes

    Didint you really know the answers to this question anyway?
     
  5. BOTURF

    BOTURF LawnSite Senior Member
    Posts: 316

    go with 1 million in business liabilty plus it might be wise to go or create a LLC ( limited liabilty company ) so if you do get sued they cant take everything you worked your whole life for , they can just take what the company ownes which after your salary shouldnt be very darn much if you do the math right
     
  6. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    Already did that.
     
  7. IndyPropertyCare

    IndyPropertyCare LawnSite Member
    Posts: 201

    Lawn & landscape avg... 1mil / 2mil aggregate..dont forget to cover your equipment & vehicles. Look for a rate of $11.21 per thousand $$ gross income.
     
  8. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    Hartford charges me $745 per year $1m GL as long as I have one employee. If add more employees, I'll probably have to pay more.

    Hartford is charging me 8.4% of payroll for workman's comp insurance.

    I wouldn't dream of not having workman's comp insurance. It's just too easy for an emloyee to come up with a back problem and lawyers are too easy to hire. Slipped discs are a real problem with this work anyway...I'm still battling one myself.

    As far as you or your corporation or your LLC getting sued, the lawyer will probably name you as a defendent in the suite as well as your corporation or LLC. There's a good chance a lawyer wouldn't take a case like this because most lawyers will instantly assume a guy mowing lawns doesn't have any assets to go after. But if he does, you'll probably lose everything you own without insurance. I don't think you'd have much of a defense in trying to say they can sue your shell (corp or LLC) but not you personally because as the manager of the business, you neglected an obvious responsibility. When you're in a non-small claims environment, and the plaintiff is represented by an attorney, there's almost no way you can defend yourself without an attorney. I'd figure a defense attorney in a civil case like this would start at $150 per hour and higher. I'd also guess that if you try to represent yourself in a court against a seasoned attorney, you'd be eaten alive. They might get everything you own over a fictitious back injury.

    Later,
    DFW Area Landscaper
     

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