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Problems Getting Insured

Discussion in 'Business Operations' started by A Perfect Shine, Nov 4, 2004.

  1. A Perfect Shine

    A Perfect Shine LawnSite Member
    Posts: 17

    We have been in business since June and its about time to get some insurance. We have tried before and no one was willing to insure us. We are trying again now and having a time of it. It seems to be a Catch-22 situation where you have to have insurance to get insurance.

    We are a quality operation, we hold high standards and are very careful with customers property. Our businesses are Auto Detailing and Holiday Lighting. How did you guys get insurance just starting out?

  2. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,439

    insurers often get scared of businesses that have been operating without. i would assume that the holiday lighting biz is what's precluding your receiving coverage? if so, it only takes one look from an underwriter at your website to possibly submarine you. you guys are dealing with high elevations/ladders, electrical, snow and ice. not the first thing they want to see or hear. i'll go out on a limb and guess that your picture portfolio of "your" displays are not actually your own work? obviously it might impress customers, but your underwriter might view it as "these guys did all this without coverage"? now, i admittedly know nothing about coverage for that type of business, but one of the companies i own is an exterior remodeling company. i needed to submit formal safety policies and training materials before i'd get insurance that would cover my ladder and scaffolding-heavy workload. i would go so far as to say that the danger level might fall somewhere between what i do and what roofers do given the amount of time spent off of the ground.

    check with your insurers about what you should preemptively provide to smooth the process.

  3. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Not quite sure why you ask about Ins for a Car Washing & Christmas Lights business on a Lawn Care Forum, BUT it could be due to your age, lack of time in business and also if you have good credit or not as most all Ins'ers now run credit checks on you and the biz also. Good luck

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    You just have to be persistent and shop around. I contacted about 10 carriers when I was starting up. Insurers look at new companies as risky since a lot of business' fail. They don't want to waste all the time and energy to get you set up to have you go under in 2 months. You're considered even riskier if you're operating a seasonal business. That's not my 2 cents, that's what the agent at State Farm told me. A lot of LCOs seem to like Erie Ins., good rates. Don't know if they insure your type of business'.

    Don't wait on this any longer, start calling some places.
  5. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,439

    from my own experience, starting the lco division took nothing more than a phone call to my agent. they told me no problems with operating power equipment, but ladders for my remodeling company was a whole 'nother issue when i took out that policy. thought that was kind of funny. i can have some kid throwing around a twin blade mega-mower or playing with a chainsaw, but that same kid on a 24 foot ladder is vastly more expensive.

    with regard to operating uninsured, and then trying to get insured, i have a local friend/competitor who's business fell on hard times and he let his policy lapse for 3 months and did only odd jobs during that time. when he went to renew his policy, his writer wouldn't do it, and neither would any other come shopping time. they were afraid of any possible liabilities during that uncovered time. he ended up having to fold his LLC and form an all new company just to get a policy. it's worked out well for him, but the ramifications of what he did were costly.

    and speaking of insurance in the lco business, if any of you guys use subs, does your policy writer limit % of business assigned to subs? it's a huuuuuge issue in the construction world. we can only pay 25% of our gross to subs, which is 25% more than some can do.

  6. Wreak

    Wreak LawnSite Member
    Posts: 90

    This sounds like the insurance companies are more willing to insure an LCO rather than a lighting person due to high elevations, ladders, electricity, etc. What about the LCO's that have insurance already that do holiday lighting? You wouldn't need to get two separate policies for two different jobs. Liability insurance is liability insurance right? So tell them that you need insurance to cut grass. LOL

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    You'd be better off with no insurance, cuz they won't pay out if there was an accident involving electrical or ladder work. My policy specifies, no gutter cleaning. Basically, no work to be done above OR below ground.
  8. Stuttering Stan

    Stuttering Stan LawnSite Bronze Member
    Posts: 1,503

    I recommend going to Erie INS if they are in your area. I recently switched and they gave me no hassle about starting a new poicy.
  9. lqmustang

    lqmustang LawnSite Senior Member
    Posts: 620

    Erie has decent rates if you can get an agent to return a call. :sleeping: I just recently took care of all my insurace issues, and it seemed to me the agents listed for Erie had no desire to return my calls. Guess they didn't need any more business. Finally got a return call and a quote from the 3rd agent I called.
  10. Turf Medic

    Turf Medic LawnSite Bronze Member
    Posts: 1,073

    Part of the problem is that you have been in business for a while without the benefit of insurance coverage. The really good companies with the best rates are going to shy away because they are concerned that there may be potential claims out there already. You will probably have to pay a higher premium with a less than stellar company for a 6 months to a year, before you can get one of the name companies. If you have already talked to an agent that is unwilling to write the policy due to the fact you don't already have insurance, ask if the is a company that they can recommend, that will accept you and then you can come back in a few months and reapply for the better company. When we first started with State Farm Ins. the agent sent us to Providian insurance, the rates were twice as high and the insurance wasn't as good but after 7 months the State Farm underwriters were willing to insure us.

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