Commercial Account - not enough insurance

Discussion in 'Lawn Mowing' started by 1MajorTom, Feb 15, 2005.

  1. 1MajorTom

    1MajorTom Former Moderator
    Messages: 6,073

    Let's say you had a commercial account last year, you had insurance but for some reason they never asked to see your insurance papers even after they signed the contract. You had the account all season long and it brought in $2900.00. You get a letter in the mail telling you that all contractors are being asked to provide proof of insurance by March 9th, they are updating their records. As you read the fine print, you realize that they are requiring 2 Mil, you don't have enough. You feel truly that you don't really need to carry this much as your business is primarily resi.
    How much of an insurance rate increase would you be willing to pay to keep this account? Just starting conversation, I will call the insurance company tomorrow to see how much more it will cost us.
  2. FrankenScagMachines

    FrankenScagMachines LawnSite Platinum Member
    from IN
    Messages: 4,739

    well Jodi, when i got my $1 million policy, the starting amount was $500k.. it was only another $50 a year to make it $1 million. So if you are doubling the money, that might be another $100-150 a year. Even if it was $200 or even 300 more a year (doubtful) i think it'd be worth it probably. I guess it depends on how profitable the job is, not how much it brings in :)
  3. SodKing

    SodKing LawnSite Bronze Member
    Messages: 1,641

    you should be able to buy an umbrella policy for just that account if you need to. Whatever it cost I would tend to pass it along to the client if it were purchased for that account specifically. Though as I state that 2 mil is the level of insurance I carry normally.
  4. JB1

    JB1 LawnSite Fanatic
    Messages: 5,904

    We did a job a few years ago that required 5 million in coverage, don't really remember what it cost but we just added it in to the costs,and nobody said a word.
  5. paponte

    paponte LawnSite Silver Member
    Messages: 2,366

    If you are not already covered for $2mil, an umbrella is a cheaper way to get coverage for specific accounts/purposes. As stated I don't believe it would be all that much more to up your coverages. :)
  6. LLandscaping

    LLandscaping LawnSite Bronze Member
    Messages: 1,016

    It the contract was only producing $2900, I wouldn't pay more than $500 extra a year. They would have to be a good account that pays on time.
  7. specialtylc

    specialtylc LawnSite Bronze Member
    Messages: 1,656

    You need to talk with the customer about the amount of insurance required. It may be a corporate form letter that they send out to everyone on their books. I had a similar situation last year. Mowing job of $30 per week and I get a letter requesting them to be listed as Additonally Insured on our policy. I told the local office I would not do that for such a small job. They said it was a form letter sent by the corporate office and to just disregard it.
  8. LLCO

    LLCO LawnSite Member
    Messages: 55

    In past jobs(cable tv), $5M was our min standard as set by our atty's. The reality was that we had "discretion" over those requirements. We would require those contractors that were working in customers homes to carry $5m. The folks that that would do directional boring asked to carry $2M and and we reset our standards because we felt $5M was too much to ask... the folks that did our lawn work asked for 500K and we felt that was reasonable and made an exception there as well..

    Might be worth asking.. sometimes accomodations can be made ...the best arguement that can be made is what is the potential exposure.
  9. alpine692003

    alpine692003 LawnSite Bronze Member
    Messages: 1,502

    My min is 2million
  10. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 14,558

    Your rates seem very low...are you taking about commericial liability or homeowner liability insurance? If it is commericial who is the insurance with? And on the subject of 1.0 million or 2.0 million, some of the accounts will allow less if you are not using any workers, i.e. solo.

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