Ammount of insurance coverage

Discussion in 'Business Operations' started by bommaritro, Jan 30, 2003.

  1. bommaritro

    bommaritro LawnSite Member
    Messages: 151

    Hey folks,

    I did a search of the forum and was unable to find anything that answered my question about insurance. What I am looking for is how large of an insurance policy that you carry in relation to the size of your business. The reason I ask is that I am currently carrying a 500k G/L policy. I am the only employee and I only a few small accounts. However I have the opportunity to bid on several large commercial properties for a business (3-4 sites roughly 10 acres apiece). They require that I carry a 4 million-dollar policy. I am just trying to get a feeling of how everyone else stands insurance wise, because if I lose this contract I may still keep the coverage so I will have better coverage in case anything bad happens. As I have read some of the threads something always seems to go wrong at least once a year.

  2. MacKenzie

    MacKenzie LawnSite Member
    Messages: 32

    I've only got a million of G/L but, I'm just starting so the guys with more experience will be able to answer better.
  3. Randy Scott

    Randy Scott LawnSite Bronze Member
    Messages: 1,915

    I don't know what threads you are reading, but if something goes wrong once a year for guys that need this kind of coverage, they won't be around long and are pretty much doomed.

    Anyways, I think most guys here carry one or two million in liability coverage. Obviously the more coverage the more the expense. If this account will be profitable enough to warrant that expense, maybe it's worth it. It seems like a little overkill to me. Then again, in todays world of sue happy scumbags, two or four million probably wouldn't be enough anyways. Also, what makes this company the expert on insurance liabilty coverage? Who are they to say that four million will be the magic number they need you to have? Can they predict the future? Sounds like another company just trying to strong hold you for something stupid. They have to try and let you know who's boss. Your call on this one I guess. :)
  4. Lawn Dog2001

    Lawn Dog2001 LawnSite Bronze Member
    Messages: 1,030

    I carry 1 million in liabilty insurance. 4 million sounds absurd to me. If that company you are bidding for, wants that much liability. They may have a tough time finding a company to service them.
  5. affprop

    affprop LawnSite Member
    Messages: 57

    Make sure you do all your homework, I got bagged last year because I didnt have a environmental clause on my insurance. I did what you probably are doing, WHAT! but apparently if you use any hydro mower, skidsteer, backhoe whatever has hydraulic fluid that holds more than a gallon you should have this ins clause. According to the d.e.p anything gal or over is considered a toxic spill and you might be held responsible for clean-up. Just a little fyi I was in shock myself. And of course this is at the same job that Dig safe was trying to bust me for not calling but I finally found my permit # and they shut up.
  6. Ed Ryder

    Ed Ryder LawnSite Senior Member
    Messages: 541

    I have just $100,000 in coverage, but I also work alone. Once I blasted out somebody's large double-pane sunroom window.

    Another time the damn kids left a rock on the lawn that shouldn't have been there. It was quartz, and it fragmented and sprayed the house. It punched numerous holes into the siding. And of course I've hit a few vent pipes sticking out of the ground. That's it! I'm very careful.

    For myself, I have a health insurance plan. And I always wear long pants, hearing and eye protection. I see so many guys here that wear nothing to at least protect their eyes. Man, that's crazy - and stupid. Getting a pebble wedged between my eye and eye socket during one brief moment when I took the safety glasses off was enough for me to consider saftey glasses mandatory at all times using a weedwacker - and the mower.
  7. bommaritro

    bommaritro LawnSite Member
    Messages: 151

    If that company you are bidding for, wants that much liability. They may have a tough time finding a company to service them.
    Lawn Dog2001

    It's just the oppisite all of the heavy hitters are bidding on this job. I have a pretty good in with the Corp. Procurment guy who is going to be calling the shots so I am sure I will get a fair ammount of consideration for the job. I currently am the lowest bid by at least 2-3k don't have anywhere the ammount of the expenses that the other guys have even if I need to bump my ins and buy a new wide area mower if I want to get fancy or I may possibly pick up a 60" ZTR not sure which brand though.

    I am still looking for more feed back from some of you larger companies that may handle big companies with similar requirements or handle a large volume of buisness with multiple employees.

    At what point would you consider going over 1-2 mil in converage?

  8. Lawn Dog2001

    Lawn Dog2001 LawnSite Bronze Member
    Messages: 1,030

    Did you get a price quote from your insurance agent, on a price for the added liabilty coverage?

    If you are 2 to $3000 less than the big boys, then just add the added cost of the insurance into the bid. then it would be a lot more worth it for you. And you will still be the lowest.
  9. lsylvain

    lsylvain LawnSite Senior Member
    Messages: 779

    I say go with at least 1 mil in G/L

    The cost is less than you think anyway. My policy is about $500 a year that's all. Plus another $1000 for the trucks with a million on them too.

    for most of you commercials it will be plenty. With residentials people put a lot of weight on insurance if you tell them you have it. so even though your bid was say $5 a cut higher than the rest, they like the insurance, and would rather go with you.

    also make sure you have something like "Voluntary Property damage." A lot of peple don't realize this but many plain liabilty coverages don't cover a lot of things. Most liability only covers unavoidable accidents and not things that could have been prevented by you doing something different.

    Say you are mowing a lot that has a big rock sticking up and you get to close to it and hit it, throwing a chunk of it through someones window. The insurance company would not cover this beacuse it was not an "accident" but an act of negligents on your part. (you should have used the trimmer.)
  10. bluemoon

    bluemoon LawnSite Member
    from Kansas
    Messages: 114


    I used to sell ins., we were told to ask how much can you afford to lose. IE. ( how much in assets do you have or can lose)?
    There are a many scenarios one can evaluate to determine how much is enough. If you can't think of questions to ask find ins. agent whom asks lots of questions. Most of the questions these people ask derive out of past claims experience and from lawyers.
    I have gone through periods mostly when I was selling ins. , that I insured myself for every possible scenario. It made sense to own what I was selling, and it didn't seem to expensive when I deducted my commission from the premium cost. But today its many years later, and a few painful experience with ins. companies and I basically carry the minimums, ( what the state says I have to carry)!!
    Admittedly I don't have much in assets. I try very hard to evaluate my exposed risks. Then I try to avoid any exposure to possible claims. In fact if more people would consider the above 2 questions, there claims risk would be lowered.
    There is an old saying , ( one can't get blood from a turnip). IF one has assets, a lawyer will go after them. If you don't have assets, what is there to go after?
    I wish I did have assets, ( a nice problem to deal with), believe it or not I do try to make money. However right now I am not setting any records in the money making & asset building dept.
    Bottom line as I see it:
    -ask lots of questions
    - figure out your comfort zone, ie. what you are willing to risk
    - if you insure for everything, you better have deeeeep pockets
    Best of Luck

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